2nd Qtr Earnings Call, Peak 2014

Discussion in 'UPS Partners' started by jeepguy63, Jul 29, 2014.

  1. jeepguy63

    jeepguy63 New Member

    Anyone have the chance to listen to the earnings call? I read through the transcript on seeking alpha. While I think we have a great company, and a great network..... It's interesting to hear the big guys talk about peak...
    Over and over, they talk about investing.... Like $175m.... First of all, that is peanuts...UPS spends that amount in less than a day. We are going to get killed at peak...too many packages, not enough capacity....so the big guys will POUND operations to cram it through... Hang on. Lots of questions about why we don't raise prices to either get paid for all the spending, or to curb demand. No good answers. Below was an interesting exchange from the call.
    As bad as I think it will be, Dave Abney may be the 11th CEO at UPS, but he may also be the 1st one to get fired!


    Arthur Hatfield - Raymond James & Associates
    Thank you. Good morning, everyone, and congrats Scott and David. I want to go back to this pricing thing. A lot of questions about pricing today, but it seems like as you've said 2014 is the year of investing for the customer. Is it possible that 2015 is going to be the year of charging the customer? And a couple questions about that as we think about – as I think about some of the comments you've made today, do you feel like you need to have a clean peak season from a service perspective before you can start to move price? And secondly, is a potential peak season surcharge in the offing for this year?

    D. Scott Davis - Chairman and CEO
    First of all, we definitely are planning and expecting a clean peak season. We’ve invested heavily this year as we’ve talked about at length. We think we’re prepared. We’re working very well with the customers. So we certainly expect a real strong peak season in 2014. As I said, this year is about investing for the customers. And as I mentioned earlier, I don’t think you’ll see the level of OpEx required in 2015 that we saw in 2014. But if e-commerce conditions change again in 2015 to drive more OpEx, I think we’ll have to evaluate everything. Everything is on the table and that could include a surcharge to peak in the future.
  2. Waste Manager

    Waste Manager Member

    This peak is going to be interesting..already the dogs are sniffing at the door..realizing that the bldg is just not going to be able to handle the volume..and realizing they finally have to do something with it..but here it is,the end of July,and they've just woken up to this fact..and as usual..the ''solution'' to the bldg problem is bandaids...kinda scary when mgmt expresses dismay about a bldg not going to work with even more volume than ever before..more volume than last year...MUCH MORE..which is more money in THEIR pocket...
  3. Jackburton

    Jackburton Gone Fish'n

    You got me for 60 hours a week, better be smart with them.
    • Agree Agree x 3
    • Like Like x 2
    • List
  4. ChickenLegs

    ChickenLegs Safety Expert

    The disaster last peak was caused by weather. They didn't need to upgrade every building. Peak will be rough but manageable as it always is.
    • Disagree Disagree x 3
    • Like Like x 1
    • List
  5. TxRoadDawg

    TxRoadDawg Member

    the disaster was too many fools waiting until the 23rd to order stuff, and Atlanta not preemptively warning people that was a no no despite what amazon promised them
    • Like Like x 2
    • Agree Agree x 2
    • List
  6. soberups

    soberups Pees in the brown Koolaid


    We didn't have a flake of snow, and every driver in my building ran out of hours and brought stops back last peak. We had mechanics pulling pup and rental trailers full of volume out to delivery areas that just sat there undelivered until after Christmas because we did not hire enough drivers.
    • Like Like x 2
    • Agree Agree x 1
    • List
  7. oldngray

    oldngray nowhere special

    You have to wonder if those top executives really believe all the spin coming out of their mouths.
  8. soberups

    soberups Pees in the brown Koolaid

    We were dead in the water 2 weeks before that.
  9. 728ups

    728ups offending people on the internet since 1995

    you sure we dont work in the same center? we had the same problems
  10. Kicked Your Dog

    Kicked Your Dog 23 Year Upser/SoCal Feeder

    Oh that's great news. I'm glad winter was cancelled this year. I must have missed the memo.
    • Optimistic Optimistic x 1
    • List
  11. UnsurePost

    UnsurePost making the unreadable unreadabler

    To blame the weather is asinine, plain and simple. It's akin to blaming a calender for being late with your mortgage.

    This peak will unfortunately be another disaster, volume-wise. The buildings cannot handle the volume. Much like last year, the preload will be moving pallets to outside in the yard, into trucks to be loaded. Hopefully the Christmas late-minute fiasco can be somewhat muted, though.
  12. Kicked Your Dog

    Kicked Your Dog 23 Year Upser/SoCal Feeder

    BTW, the southwest has endured a historical drought for the last few years. So, what's going to happen when mother balances thing out with the El Niño weather pattern projected in the next year or two, during peak?
  13. Gumby

    Gumby *

    How about something crazy?
    Instead of spending 2 billion a year on dividends.......lets buy some trucks and increase building capacity!
  14. beentheredonethat

    beentheredonethat Well-Known Member

    I agree, we should put an extra billion per year (minimum) into capex. Start off with multiple new hubs across the country, then add in new package cars.
    • Like Like x 2
    • Winner Winner x 1
    • List
  15. Gumby

    Gumby *

    Ups Spent too many years,cutting back!
    Fix the problems now,before they get too big!

    Gotta spend money,to make it!
    • Like Like x 1
    • Winner Winner x 1
    • List
  16. TxRoadDawg

    TxRoadDawg Member

    Better yet, lets get a plan thats reasonable to execute, WITH upper management that can see past their spreadsheets, and spend a few million on raises for lower management that can actually run these numbers so we finally get rewarded for our efforts
  17. SignificantOwner

    SignificantOwner A Package Center Manager

    Hey, our new CEO to be offered the opportunity to get your name in a drawing for an iPad if you helped him out with an idea to make peak better. What do you expect, to share in the profits your ideas produce or something?
  18. Gumby

    Gumby *

    Lets try something new.
    Get us out of the building on time.

    Take an extra few days,to train helpers.

    Weed out the bad ones and reward the good ones!

    Fyi I make over 5 times the rate,of a helper!
    Do not give me the stops per hour crap!

    How about the cost of package,per hour!

    Run it by the real (meaningful) numbers!
  19. By The Book

    By The Book Well-Known Member

    That right there is poor planning . If they put helpers with each route and still couldn't deliver the packages, sir you are correct. They understaffed your building big time.
  20. bleedinbrown58

    bleedinbrown58 ahhh....the mouth breathers

    Gonna be fun peak this year.....in my local...seniority PTers can double shift as helpers....over seasonals. Big fat peak paychecks!! And drivers get helpers that don't suck!