Big Changes to UPS Basic-beginning of the end???!!!

Discussion in 'UPS Discussions' started by pkgman001, Jan 17, 2009.

  1. pkgman001

    pkgman001 New Member

    I just heard from my customer. He got a call from UPS rep-he has been approved for Basic, but 100% of the pkgs will be USPS, not just the rural. The rep also told him that from now on, ALL new Basic shippers would be 100% USPS delivery (The current shippers would continue with just rural delivered by PO.) The reason the rep gave-"we are losing money on Basic right now, but FedEx is making money on SmartPost, so we have to have PO deliver the pkgs. PO delivers a pkg for $1.45, thats less than it costs for our own drivers".
    The customer told me his new rate is under 3 bucks! So whats to keep every new customer from demanding Basic and the $3 rate? I thought there was something in the Teamsters agreement that prohibited outsourcing to the PO!
  2. InTheRed

    InTheRed New Member

    Won't we deliver the basic packages to the main post office, for their mail carriers to run off in the final leg?
  3. Dump and Run

    Dump and Run New Member

    In order for the customer to get that rate and service they must meet a certain # of pkgs. shipped per day and what-not. So others can demand it but won't get it.
  4. dannyboy

    dannyboy From the promised LAND

    I believe you are confusing several issues here.

    1 Currently, basic packages are delivered by UPS to the consignee and the postal service. It is the lowest cost service we offered. We are making money on the packages delivered to the PO, but are losing money on the ones delivered to the consignee

    2 The change that you are talking about is that if they want the post office to do the last leg of the delivery, the customer will have the choice of letting them do that. UPS will not force them to ship all their packages basic, only those that will be delivered to the postal service. The rest of the packages that we will deliver will be regular UPS delivery for now.

    So that does not mean that all his packages going out have to be basic, just the ones going to the postal service, the ones that qualify for the basic rate. All others will still go regular UPS.


    HEFFERNAN Huge Member

    How are we losing money by delivering to the consignee.

    Regardless we take the package that's in our building and have to deliver it somewhere. Be it the post office or the person's house, considering we are going to be in their neighborhood anyways, it doesn't matter.
  6. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Your theory holds true in a typical residential neighborhood but d is talking about those folks who live in the middle of nowhere. My center is a smaller one and many of the towns served have quite a few "chasers" that we do indeed lose money on. Delivering 20 pkgs directly to the Post Office is certainly cheaper for us than delivering those same 20 pkgs and putting 20-40 miles or more on the pkg car. It is nothing for some of our drivers to drive 2, 3, 4 or even 5 miles to deliver one pkg. (This was the idea behind rural remote which was a sound concept which was abused by mgt and used as a dispatch tool.) When you factor in all of the costs involved with delivering a pkg you would find that we lost money on that one.
  7. dannyboy

    dannyboy From the promised LAND


    Up is correct. When you look at your center and the dispatch from there, you assume that you have a cross section of what UPS is like nation wide. Aint so.

    In some areas you are pretty close to the basics we deliver to the home. In some cases, you drive right by one we are taking to the post office, but usually it is several blocks away from our closest stop.

    In many areas, it is several miles to the stop.

    So over all, the stops we deliver to the consignee we lose money on.

    NY, as much as I disagreed with remote, it was a sound business decision. It is what management did to the concept that made it just plain wrong. At least here, the abuse was unbelievable!

  8. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    I understood the concept but the thought of "penalizing" someone for living in the boonies was something I also disagreed with. It wasn't so bad when they kept the pkgs on the car and let us make the decision(s) as we know our areas a lot better and are often able to indirect these pkgs so that the customers receives their pkg and UPS saves money. For example, Mary lives 5 miles outside of town but works at Town hall and has given permission for us to deliver her personal pkgs there. It was when they started taking entire towns and putting them under the belt that rural remote strayed from its original intent and became a dispatch tool.
  9. upsdude

    upsdude Well-Known Member

    They didn't "remote" the entire town here but they would park a complete route that is only 5 miles from the building. Dispatch tool? You bet, especially if there were too many vacations/personals on a summer time Friday. I'm glad "remote" went away.
  10. upsdude

    upsdude Well-Known Member

    As a follow up..............

    At the time “remote delivery” was introduced my parents lived in the middle of nowhere. They were literally 10 miles from any type of store to buy a loaf of bread. They did most of their shopping by driving an hour and a half (one way) to Richmond Va.

    I explained the (back then) new UPS policy and how some of their deliveries could be delayed by a day. Mom and Dad both didn’t seem to have a problem with it. As they explained to me, when you live in the boonies you do a better job planning your needs or spend a fortune on gasoline.
  11. dannyboy

    dannyboy From the promised LAND

    Remote as a business decision was a winner. But like all ideas that come from above that actually make sense, by the time local management prostitutes it, it ends up bad news for everyone.

    The idea was to save UPS money by consolidating those loser stops to where they are closer together. Problem is that they remoted stops you had to drive right by to get other stops.

    Also, business stops were not to be remoted, but they were here. Because of the greed of the local management team, something that had merit got abused and then trashed.

    As a practical matter, I am glad it did. I always took great pride in the fact we are the only company that delivers to every adress in the USA. The postal service claims the same, but they leave the packages at the mail box, not the door step.

  12. mattwtrs

    mattwtrs Retired Senior Member

    If the town has a rural surcharge added to the shipping rate UPS is probably loosing money on single package resi stops. 25 years ago I had a rider from the region that had never been on a rural route. I think he said back then we needed to 2 packages for a resi stop to break even and 3 packages we made money on in theory.
  13. mattwtrs

    mattwtrs Retired Senior Member

    I delivered areas that I drove 20 miles for 1 stop. Some days for my last 5 stops I would put 55-60 miles on the area to deliver them and that was in the summer. Once the snow started accumulating I couldn't use the short cuts over the mountain ridges and those same 5 stops may end up being 80-90 miles.

    Looking out at the 2+ feet of snow I'm happy to be home!

    HEFFERNAN Huge Member

    I understand the concept, but what if they are not home and you need a signature. Then you may be pressured to leave it knowing that your boss will be mad that you brought it back and have to go all the way back again.

    HEFFERNAN Huge Member

    That is my fault for being shortsighted. I am in Connecticut where we are for the most part densely populated and honestly we don't deliver to post offices as much as some of you do.
  16. browniehound

    browniehound Well-Known Member

    You took the words right out of my mouth. I can't imagine UPS making any money on a ground package in which the driver must drive 3 miles at 25mph to the house and 3 miles back. Actually there is no way UPS can make money and is most likely losing money (even an air package would lose money)

    I'm not familiar with your type of routes (thankfully LOL).

    I work in the city/suburbs where 25 or even 28 stops per hour is possible. When you add the residential charge (it was $1 but I know it has increased to 1 and change) we must be making money on these parcels but I'm thinking it can't be much. The residential surcharge doesn't even cover the driver's hourly wage.

    The money is business to business when you think about it. UPS pays me $29 to deliver 30 parcels at 26 stops an hour. They also pay $29 to deliver 160 parcels at 10 stops an hour. It appears our residential stops break even so we can make money at bulk stops.
  17. dannyboy

    dannyboy From the promised LAND

    Heffe my brother

    A basic package can not be a signature required package. The shipper has authorized UPS to leave every one of them at the address on the package regardless of where it is delivered to. Basics are to be left everywhere at all times. Period.


    HEFFERNAN Huge Member


    I was leaning towards UPS losing tons of money on sig required packages in remote areas. I'm sure there could be some bending of the rules in those cases by management to save money.
  19. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Heffe, there is normally no bending of the rules in those cases by mgt but years of being on the same route and developing relationships with your customers can take care of those sig req pkgs for you.
  20. Coldworld

    Coldworld Taking it all back.....

    any of you have to wait in line at the post office for them to sign for a few pkgs?? Would have been faster to deliver them, especially if they were close to the po.