4/1/10 Fed Gov makes the move to UPS

[dcdriver]

We have been told that UPS won the GSA account and the switch from Fedex to UPS starts April 1. Anyone else been told the same. Looks like it could add many routes to some centers. It could save the government $$$$$ and make UPS $$$$$.

 

[TheDick]

Kinda early for april fools jokes eh?

 

[upssalesguy]

this is good for UPS, especially in metro DC where fedex has been eating our lunch

 

[PT Stewie]

We had people on site at one time at their distribution center. Wondering if they will staff back up ?

 

[upssup]

For all of you that complained about having to do the I-9 updates. This is why you have to do it. It is not a UPS thing. It is so we can be awarded Government contracts. But I am sorry that we made you go through such traumatic work at the time.

 

[JonFrum]

The anouncement says UPS will ship their stuff at a deep discount, charge 6% less than the previous contractor, and save the shippers over a billion dollars in five years.

How exactly is this good (profitable) for UPSers? Sounds like a blueprint for loosing money.

 

[beentheredonethat]

The anouncement says UPS will ship their stuff at a deep discount, charge 6% less than the previous contractor, and save the shippers over a billion dollars in five years.

How exactly is this good (profitable) for UPSers? Sounds like a blueprint for loosing money.

I think it's ironic, if we lose a customer to Fedex because we decided not to go lower then them, people think the company is stupid for not matching rates. If we give a larger discount then FDX did, then we are stupid for giving to much away and losing money on the account. Isn't it possible, that a company that has been around for over 100 years, and makes money (even in this last\current recession) does the right thing occasionally?

 

[upssalesguy]

strategic accounts (like the government) fill the trucks and pay the bills. other smaller accounts are where we make profit (because the trucks are already carrying enough packges to sustain the network).

 

[tieguy]

The anouncement says UPS will ship their stuff at a deep discount, charge 6% less than the previous contractor, and save the shippers over a billion dollars in five years.

How exactly is this good (profitable) for UPSers? Sounds like a blueprint for loosing money.

Six percent less from what price range. I can't imagine the government negotiating from the same rates that fdx would have charged a corporate customer. I would think there is still a lot of profit to work with here.

anyone want to crunch the numbers on a contract where six percent over five years equates to a billion dollars?

 

[PT Stewie]

I am sure UPS gives discounts based on volume all the time. I see a lot of work go through from companies like Sony, Proflowers,QVC, Medco etc. It is a competative world out there and in this economy it is good to see someone at corporate is paying attention. A lot of times we are critical of the company but at the end of the week we all need a pay check !
PS As long as sups don't touch the work. LOL

 

[SnowCitizen]

anyone want to crunch the numbers on a contract where six percent over five years equates to a billion dollars?

1,000,000,000 / .06 = 16,666,666,666

16,666,666,666 - 1,000,000,000 = 15,666,666,666

So roughly 15.5 Billion contract

 

[klein]

1,000,000,000 / .06 = 16,666,666,666

16,666,666,666 - 1,000,000,000 = 15,666,666,666

So roughly 15.5 Billion contract

Still makes me wonder. So, Fedex was ranking in atleast 1 Billion profit every 5 years, or they couldn't afford to give up (maybe lose) $1 Billion in the next 5 years ?
Besides, you would think shareholders and Wall Street would be delighted with that news, and UPS stock would rise sharply. That hasn't happened though. It's not all good news.

Anyways:
Someone outta thank Obama !
(because I bet, if it was Fedex taking the contract from UPS, Obama and democrats would have been blamed on here, big time) !!!!

 

[p228]

Besides, you would think shareholders and Wall Street would be delighted with that news, and UPS stock would rise sharply. That hasn't happened though. It's not all good news.

The announcement was made on 1 Sept 09 when the stock price was about $52. The stock price rose steadily for about two weeks after that to $59.

 

[klein]

The announcement was made on 1 Sept 09 when the stock price was about $52. The stock price rose steadily for about two weeks after that to $59.

Over 2 weeks, nothing major ....
And how did Fedex do, in that time range ? sunk ?

 

[happybob]

Just cuious Klein, did you ever get your job back at UPS or are you still at the pub

 

[klein]

Just cuious Klein, did you ever get your job back at UPS or are you still at the pub

Still pubbung it. Should change my nickname to Happypubbie ! LOL
Happy St Patricks to ya !

 

[p228]

Over 2 weeks, nothing major ....
And how did Fedex do, in that time range ? sunk ?

The stock price goes up $7 dollars per share in two weeks. Since then the price per share has only risen an additional $3 dollars. That's nothing major?

 

[klein]

The stock price goes up $7 dollars per share in two weeks. Since then the price per share has only risen an additional $3 dollars. That's nothing major?

In the same time frame fedex went from $70 to $80, now at $90 !

 

[p228]

In the same time frame fedex went from $70 to $80, now at $90 !<br />

What is the point of those graphs? Are you trying to show the well known fact that FedEx has a competitive advantage over us through the use of independent contractors and paying employees lower wages which results in their stock price nearly always being higher than ours?

You stated that the new GSA contract had no effect on the stock price and "It's not all good news." The point of my post was to show that the new contract does in fact provide us with significant financial benefit. Is it going to put us on par with FedEx? No, but more packages and more revenue aren't a bad thing. Especially, if it can help stave off layoffs or even add more jobs.

 

[klein]

What is the point of those graphs? Are you trying to show the well known fact that FedEx has a competitive advantage over us through the use of independent contractors and paying employees lower wages which results in their stock price nearly always being higher than ours?

You stated that the new GSA contract had no effect on the stock price and "It's not all good news." The point of my post was to show that the new contract does in fact provide us with significant financial benefit. Is it going to put us on par with FedEx? No, but more packages and more revenue aren't a bad thing. Especially, if it can help stave off layoffs or even add more jobs.

No, I was just saying the stockmarket didn't react to the news. In September all stocks rebounded.
If it was a major factor, don't you think Fedex Stock would have went down on the news, of loosing the GSA contract ?

I agree with you, probably good volume.... but not a major money maker, by all means.
Might even be a huge challenge for UPS, to underbeat Fedex by 1 Billion dollars in a 5 year term ($20 million per year, cheaper then fedex).???