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!
Thoughts?
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.
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!
Thoughts?
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.
