Comparison: Last, Best & Final to Pre-strike proposals

[104Feeder]

Issue	Last, Best, and Final	Teamster Pre-strike proposals	Tentative agreement
full time jobs	200 new full time jobs/yr	create 10,000 new full time jobs (2500/yr) by combining part-time positions	10,000 new friend/t to be created over life of agreement (6 years). 2500 combo jobs (22.3 jobs) to be created years 3,4,5,6. 9,000 new clerical jobs added to the bargaining unit exclusive of ODS clerks, FDC clerks, International auditor positions and CC clerks. 1000 new air/gateway employees inclusive of ramp work + we gain one new facility every 3 months at various locations across the country
Subcontracting	Expand use of feeder subcontractors	No subcontracting of feeder work except during peak season	enhanced protections, eliminations of subcontractor such as O.A.S
Wages	friend/T $0/$.50/$.50/$0 plus 2 bonuses that are not added to the base wage rate. ($1.00/hr total increase or $9,000 more over 4 years plus a non-guaranteed fourth year bonus) P/T in progression (3 of every 4 p/ters): no general wage increase, $.25 increase between progression steps, 2 bonuses that are not added to the base wage rate ($3900 over 4 years for the average p/ter plus a non-guaranteed 4th year bonus P/T out of progression (1 of every 4 p/ter) wage increases of $1/$.50/$.50/$0 plus 2 bonuses that are not added to the base wage rate ($2/hr total or $8,700 more over 4 years plus a non-guaranteed 4th year bonus) No increase in the starting wage rate for P/T	Full-Timers: wage increases of $.70/$.65/$.65/$.60 ($2.60/hr total increase or nearly $17,000 more over 4 years. Part-Time: same wage increases as friend/T plus an additional $1/hr over 4 years for p/t hired after 1982 ($3.60/hr or $10,000 more over 4 years P/T wage increases apply to all part timers who have attained seniority as of August 1, 1997 $.50 increase in the starting rate + $.50 at seniority	friend/T $.75/$.75/$.80/$.80/$.90/$1.00 P/T prior to 1982 same wage increases at friend/T P/t hired after 1982 $.85/$.90/$.95/$1/$1.10/$1.20 Progression for P/T to friend/T was increased from 2 years to 2.5 years (extended 6 months) Time and-a-half for friend/T package drivers working Day after Thanksgiving (plus Holiday Pay) & an 8 hour guarantee for the day Improved COLA language
Package Car Work	Use p/t air drivers to deliver ground packages	NO shift of package car work to p/t	Work protected
Feeder Work	use p/t to do air shuttle work	All air shuttle work done by friend/T feeder or package drivers	NO loss of current work. Vacated positions either re-bid as is or combined with other air work to create 1 full-time job or full-time combo job. Current p/t shuttle work will be converted to friend/t as same
Part Timers	no increase in guaranteed hours Maintain 4 year wage progression	3.5 hour guarantee Shorten the progression to 3 years	3.5 hour guarantee
Air Drivers	Starting pay for new air driver is frozen at $10/hr 4 year progression for new air drivers	Increase pay for all p/t air drivers, including exception drivers, by creating a minimum p/t air driver rate of $14+ general wage in creases & minimum friend/t air driver rate of $15+general wage increases Create more friend/t air driver jobs and friend/t combination jobs	P/T $11/start, 24 month progression friend/T $13/start, 24 month progression
Over 70's	Company can increase weight limit above 150lbs at any time without the Union's agreement	no right to increase weight limit above 150lbs without Union agreement. Right to Teamster help and lifting devices for Over 70's NO discipline for refusal to handle O70's without assistance	O70 rights protected
Health & Welfare	Push all UPSers into managed care plans and HMO's Eliminate family coverage for all newly hired part timers	maintain current plans	Maintained current plan benefits and family coverage. Full maintenance of Benefits
Right to honor Union Picket Lines	Force UPS workers to scab on other union members	maintain our right to honor Union picket lines	Right protected

Innocent until Proven Guilty

Expand the list of infractions called "cardinal sins" where innocent until proven guilty does not apply

Maintain the current language-innocent until proven guilty except for "cardinal sins" as defined in the supplement.

No expansion to "cardinal sins". Innocent until Proven guilty language protected

PENSIONS	Company controlled plan friend/T 35 & out-- $3500 30 & out --$3,000 25 years (age 57)--- $2000 25 years (age 60)--- $2,500 25 & out--- $2,000 P/T 10 years (age 60) -- $500 20 years (age 60) -- $1,000 25 years (any age) -- $1,000 30 years (any age) -- $1,500	Improve benefits in local and regional Teamster pension plans	Pensions remained under Teamster control
Central States	see above	Full Timers 35 & out-- $3,500 30 & out-- $3,000 25 years (age 57)-- $2,500 25 years (age 60)-- $2,500 25 & Out -- $2,000 P/T same benefit levels as company offer	see CS supplement
JC40, JC83, JC84, SW PA & MD, Locals 177,344,355,639,688,804,992,996	see above	friend/T- comparable or better levels as company offer, but not Company-controlled. P/T same benefit levels as Company offer	See respective supplements
Western Conference of Teamsters, Alaska, New England Plan, NY State Plan	see above	friend/T Comparable or better benefit levels as company offer, but not company-controlled P/T- already better than company offer, and not company controlled.	$.40/$.35/$.35/$.35/$.35/$.40 per year added to pension contribution. Remain in WCT pension fund
Philly Area Plan, Central PA, and local 901	see above	friend/T Significant improvements to the current plan, and not company-controlled P/T same benefit levels as company offer.	see respective supplements

Still think we missed out on the Ferrari BrownIEman? I think we hustled them & they had to sell that Pinto to another sucker (management) later.

In addition we won substantial enhancements in Supervisors Working language & the first serious attempt at curtailing the 9.5 problem. I actually won many 9.5 grievances for my members under this language & solved their issue. They are all in Feeder now.

 

[PobreCarlos]

104Feeder;

I hate to sound like a Doubting Thomas here, but I sure would like to see a scan of the "last, best, and final offer" - signed, and as directly submitted by UPS - rather than automatically accept a re-typed account of what it is alleged to have contained via what may (or may not - not making any claims here) be second or third hand sources and/or with content possibly "filtered" or re-worked. (note my use of the word "possibly" - again, I'm not making any claims!). It might help to relieve some confusion.

 

[104Feeder]

Tell ya what Pobre. S--- in one hand and Wish in the other. See which gets filled up first.

 

[PobreCarlos]

104Feeder;

Am I to take that to mean that you're not in a position to provide such credibility? I.e. - that I've going to be leaving "empty handed"? If so, I'll admit to being disappointed, although not particularly surprised.

 

[brownmonster]

104Feeder;

Am I to take that to mean that you're not in a position to provide such credibility? I.e. - that I've going to be leaving "empty handed"? If so, I'll admit to being disappointed, although not particularly surprised.

You just have to believe him. Kind of like not showing the last 10 years of tax returns.

 

[soberups]

104Feeder;

Am I to take that to mean that you're not in a position to provide such credibility? I.e. - that I've going to be leaving "empty handed"? If so, I'll admit to being disappointed, although not particularly surprised.

Pobre,

You have already made your mind up long ago.

Offering you additional facts and information isnt going to change that.

It would not matter what sort of "proof" he offered....you would simply refuse to believe it because it would not square with your preconceived agenda.

You werent even a UPS employee in 1997. You werent at the union meetings. You werent on the picket line. We were.

 

[soberups]

I was at the PCM on the final workday before the strike, when our District Manager personally presented the details of the "last, best and final offer."

That offer included taking us out of the Western Conference of Teamsters plan and sticking us into the company plan that would have cost me personally at least half a million dollars during my projected retirement.

I will qualify for PEER 80 in about 4.5 years at the age of 50, with 30 years in, and my monthly benefit at that time will be something in the ballpark of $5K per month. Under the LBF, I would only get $3K for my 30 years, and that is assuming that the company had not been able to negotiate further decreases in subsequent contracts. That is a net loss of $2K per month, or $24K per year. Asuming I lived to age 72, that is a net loss of $528,000 over the 22 year period between my retirement date and my death.

Why on earth would any Teamster in the Western Conference take such an offer seriously? We arent talking about $.25 an hour, we are talking about cutting someones pension by almost half.

I work for a company that made a business decision that my life was not worth the $50 it would have cost to equip its older package cars with a 3 point seat belt. I work for a company that made a business decision that my health and safety was not worth the $350 it would have cost to equip the older package cars with power steering. I work for a company that recently eliminated any sort of pension benefits for newly hired management people, as well as implementing a companywide pay cut/freeze for lower and mid level management while at the same time giving its CEO a $10 MILLION dollar raise. You would have to be on some seriously good dope to think that trusting that same company to take care of my pension would somehow be in my best interests. You would have to be on some seriously good dope to think I wouldnt go out on strike over such a fu%kjob as was being shoved down our throats in the "last best and final" offer of 1997.

 

[Coldworld]

I was at the PCM on the final workday before the strike, when our District Manager personally presented the details of the "last, best and final offer."

That offer included taking us out of the Western Conference of Teamsters plan and sticking us into the company plan that would have cost me personally at least half a million dollars during my projected retirement.

I will qualify for PEER 80 in about 4.5 years at the age of 50, with 30 years in, and my monthly benefit at that time will be something in the ballpark of $5K per month. Under the LBF, I would only get $3K for my 30 years, and that is assuming that the company had not been able to negotiate further decreases in subsequent contracts. That is a net loss of $2K per month, or $24K per year. Asuming I lived to age 72, that is a net loss of $528,000 over the 22 year period between my retirement date and my death.

Why on earth would any Teamster in the Western Conference take such an offer seriously? We arent talking about $.25 an hour, we are talking about cutting someones pension by almost half.

I work for a company that made a business decision that my life was not worth the $50 it would have cost to equip its older package cars with a 3 point seat belt. I work for a company that made a business decision that my health and safety was not worth the $350 it would have cost to equip the older package cars with power steering. I work for a company that recently eliminated any sort of pension benefits for newly hired management people, as well as implementing a companywide pay cut/freeze for lower and mid level management while at the same time giving its CEO a $10 MILLION dollar raise. You would have to be on some seriously good dope to think that trusting that same company to take care of my pension would somehow be in my best interests. You would have to be on some seriously good dope to think I wouldnt go out on strike over such a fu%kjob as was being shoved down our throats in the "last best and final" offer of 1997.

Why are some drivers on here saying that if UPS controlled the pension that retirees would be getting 6-7k a month...where did that number come from???

 

[PobreCarlos]

coldworld;

Not sure it you can derive a number that answers your question from it or not, but you might want to calculate what $6 BILLION (which is what I understand UPS eventually paid to withdraw from Central States) divided by the number of UPS CSPF participants then. It's a heck of a large sum, any way you look at it. Now I'm not about to claim that, if UPS had "saved" all of that money, it would have necessarily totally been devoted to its Teamster pensioners....but, if even a significant fraction of it was, it could very well have made a significant difference in the monthly payout they received.

Now, however, that's money flushed down the toilet...never to be seen by UPS Teamsters again.

 

[brownIEman]

Still think we missed out on the Ferrari BrownIEman? I think we hustled them & they had to sell that Pinto to another sucker (management) later.

In addition we won substantial enhancements in Supervisors Working language & the first serious attempt at curtailing the 9.5 problem. I actually won many 9.5 grievances for my members under this language & solved their issue. They are all in Feeder now.

​

I think you are missing the point of my arguments.

I never suggested the LBF was somehow a better deal for you than what you won from the company. You absolutely, as you say, "hustled them". The IBT managed to completely destroy UPS leaderships plans to try and control the growth of costs with the help of the teamsters. They had to push for cost reductions elsewhere, including management, even more aggressively than they might have otherwise. One effect of that that history has recorded is that UPS Teamsters (at least FT) have a very attractive total compensation package. Another effect history has recorded has been that UPS has failed to be price competitive in the domestic US small package market and has seen its share of that market drop from around 80% in 1997 to around 50% today.
​

 

[soberups]

. One effect of that that history has recorded is that UPS Teamsters (at least FT) have a very attractive total compensation package. Another effect history has recorded has been that UPS has failed to be price competitive in the domestic US small package market and has seen its share of that market drop from around 80% in 1997 to around 50% today.
[/COLOR][/LEFT]

A couple of questions about that 50% figure;

1. Does it include the volume that we are subcontracting out to the Post Office via SurePost? It would be a bit deceptive to complain about "losing volume" to the Post Office when we are the ones dropping bags full of packages off for them to deliver.

2. Is it even realistic to assume that our market share percentage would remain at 80% when you factor in the huge amount of growth in the residential market due to online shipping that has occured since 1997? I dont think Amazon.com even existed back then. We might only be getting 50% now, but its 50% of a much larger pie.

3. How much of that volume loss is service related rather than price related? I can personally attest to a fourfold increase in the number of misloads that I find in my truck since the advent of PAS/EDD, as well as about a thousandfold increase in the wasted time, lost productivity, service failures etc that result from taking decision-making authority away from front-line management and placing it in the hands of cubicle-dwelling metric chasers in another time zone.

In short, I think it is inaccurate to blame a purported 30% loss of market share solely on the 1997 contract.

 

[PobreCarlos]

Actually, I don't see any "huge amount of growth in the residential market"; rather, what I see are packages that have been DIVERTED from commercial receivers to residential ones...at a far GREATER cost per package to UPS. Granted, there have been rate adjustments for residential, but I don't think that they truly make up for what amounts to [relative to overall economy] virtually the same - or greater - volume that used to move through our systems, and which was delivered in bulk to multi-package commercial stops instead or single package (or whatever) residential ones.

Of course, that residential cost is even greater if one considers that we're now delivering on a shipper discount basis, as opposed to the tariff figures our pricing USED to be based on.

In truth, I'm not sure the "internet revolution" really benefited UPS that much. The pie really ISN'T that much larger. We were handling the volume before...and perhaps more of it. It just didn't dribble-out through residential deliveries.

 

[pretzel_man]

A couple of questions about that 50% figure;

1. Does it include the volume that we are subcontracting out to the Post Office via SurePost? It would be a bit deceptive to complain about "losing volume" to the Post Office when we are the ones dropping bags full of packages off for them to deliver.

2. Is it even realistic to assume that our market share percentage would remain at 80% when you factor in the huge amount of growth in the residential market due to online shipping that has occured since 1997? I dont think Amazon.com even existed back then. We might only be getting 50% now, but its 50% of a much larger pie.

3. How much of that volume loss is service related rather than price related? I can personally attest to a fourfold increase in the number of misloads that I find in my truck since the advent of PAS/EDD, as well as about a thousandfold increase in the wasted time, lost productivity, service failures etc that result from taking decision-making authority away from front-line management and placing it in the hands of cubicle-dwelling metric chasers in another time zone.

In short, I think it is inaccurate to blame a purported 30% loss of market share solely on the 1997 contract.

I do NOT know about the 50% figure, but I DO know this....

FedEx ground is now moving somewhere around 4 million packages per day. We definitely lost market share to FedEx.

Market research shows that our ground service is noticeably better than FedEx ground. Customers (in general) are not leaving due to service (again, generally). Price is a MAJOR factor, but they are also looking for some easier to use services.

If you look at MyChoice, it is directed to the consignee. The hope is that it can differentiate us in the marketplace and have consignees request UPS for shipping.

Unfortunately, shippers want lower cost. It costs FedEx ground about 60% of what it costs UPS to put on a driver. And since they are NOT employees, FedEx does not have to worry about OJS rides, performance, etc.....

Finally, Surepost is a response to FedEx smartpost. It is for customers what want an even lower cost, lower frills service.

I did NOT put the blame on 1997, although it is a piece. RPS was taking away our volume before 1997. 1997 gave shippers another reason. Take a look at what FedEx does. They promote to shippers that they are more stable because they are non-union.

Its a good thing that UPS and the Teamsters will start negotiations early.

 

[104Feeder]

Fedex Ground is beating us in time-in-transit, more than a day in some cases. UPS would be better served if we moved more runs off the Rail and added more Sleeper teams as was the plan in 2006. Rail is cheap but people want their stuff faster & large shippers like Amazon want it there faster too.

UPS could easily cut costs by getting rid of all the unnecessary management, especially in the part-time ranks. Some of the hubs I walk into it seems like a ration of 1-4 mgmt/worker. Sure there are way too many supervisors doing our work but mostly you just see them texting each other. Not to mention the ridiculous sums of money that we spend on technology to spy on workers & dubious efficiency improvements. It's like Florida spending $2.7 million to drug test welfare recipients to "save" $80,400 in welfare benefits paid. Even in Feeders we are becoming too bloated with on-road management. Once you get to our level most of the B.S. stops & we have a better working relationship based on mutual respect. Right now we need more on-roads to train but that could be accomplished by having groups that travel to locations based on the training needs. Two on-roads would be plenty to handle the safety rides & post-accident rides (although the clamp down on Feeder over-allowed (another oxymoron) is creating more accidents. What is cheaper? 1 hr over allowed every day or your average Tier 3 Feeder accident?)

It always seemed strange to me that in Package you have people who want less overtime so the Company does everything they can to cram the OT in even at the triple-time rate. In Feeders you have the majority of the department who would hit their 60 every week if they could but instead the Company subcontracts, cuts hours, and acts in petty ways (such as building a facility in CA in a specific location just to cut a certain local out of any new Feeder work). We even under-utilize our Feeder network when we could be using our own drivers to transport new Package cars for example.

All the 1997 strike really did to some of our customers is impress upon them that diversifying their shipping sources was a prudent move. UPS has exacerbated that by raising rates every single year without fail. Sure, fuel charges have been screwing the pooch the last decade or so but why don't we be proactive like Delta Airlines and buy our own refinery? Lots of creative ways we could become more competitive and a stronger company and none of it involves screwing over the Teamsters who helped build this Company.

 

[Catatonic]

Fedex Ground is beating us in time-in-transit, more than a day in some cases. UPS would be better served if we moved more runs off the Rail and added more Sleeper teams as was the plan in 2006. Rail is cheap but people want their stuff faster & large shippers like Amazon want it there faster too.

UPS could easily cut costs by getting rid of all the unnecessary management, especially in the part-time ranks. Some of the hubs I walk into it seems like a ration of 1-4 mgmt/worker. Sure there are way too many supervisors doing our work but mostly you just see them texting each other. Not to mention the ridiculous sums of money that we spend on technology to spy on workers & dubious efficiency improvements. It's like Florida spending $2.7 million to drug test welfare recipients to "save" $80,400 in welfare benefits paid. Even in Feeders we are becoming too bloated with on-road management. Once you get to our level most of the B.S. stops & we have a better working relationship based on mutual respect. Right now we need more on-roads to train but that could be accomplished by having groups that travel to locations based on the training needs. Two on-roads would be plenty to handle the safety rides & post-accident rides (although the clamp down on Feeder over-allowed (another oxymoron) is creating more accidents. What is cheaper? 1 hr over allowed every day or your average Tier 3 Feeder accident?)

It always seemed strange to me that in Package you have people who want less overtime so the Company does everything they can to cram the OT in even at the triple-time rate. In Feeders you have the majority of the department who would hit their 60 every week if they could but instead the Company subcontracts, cuts hours, and acts in petty ways (such as building a facility in CA in a specific location just to cut a certain local out of any new Feeder work). We even under-utilize our Feeder network when we could be using our own drivers to transport new Package cars for example.

All the 1997 strike really did to some of our customers is impress upon them that diversifying their shipping sources was a prudent move. UPS has exacerbated that by raising rates every single year without fail. Sure, fuel charges have been screwing the pooch the last decade or so but why don't we be proactive like Delta Airlines and buy our own refinery? Lots of creative ways we could become more competitive and a stronger company and none of it involves screwing over the Teamsters who helped build this Company.

Ever thought about going into politics?

 

[brownIEman]

A couple of questions about that 50% figure;

1. Does it include the volume that we are subcontracting out to the Post Office via SurePost? It would be a bit deceptive to complain about "losing volume" to the Post Office when we are the ones dropping bags full of packages off for them to deliver.

2. Is it even realistic to assume that our market share percentage would remain at 80% when you factor in the huge amount of growth in the residential market due to online shipping that has occured since 1997? I dont think Amazon.com even existed back then. We might only be getting 50% now, but its 50% of a much larger pie.

3. How much of that volume loss is service related rather than price related? I can personally attest to a fourfold increase in the number of misloads that I find in my truck since the advent of PAS/EDD, as well as about a thousandfold increase in the wasted time, lost productivity, service failures etc that result from taking decision-making authority away from front-line management and placing it in the hands of cubicle-dwelling metric chasers in another time zone.

In short, I think it is inaccurate to blame a purported 30% loss of market share solely on the 1997 contract.

I believe the numbers used to calculate market share do include surepost. In fact, those packages would actually sort of "double dip", as UPS would report them in its daily delivery volume numbers, since we do indeed deliver them to the post office. The USPS would also count them, as they deliver to final consignee. The end effect should be a wash or close to it.

You are absolutely correct, the small package market has grown incredibly due to the massive change in retail from the internet, and other factors. The pie has grown tremendously. So much so that even though our piece is only 50% now compared to 80%, that 50% piece is a much larger total. Which is fine for now. But what happens if the growth in the market slows and our percentage continues to decline? It also does not matter how big the pie gets, if our percentage of it drops to zero. The company saw this a long time ago. I remember being in a meeting in 1995 discussing cost cutting measures such as consolidating the CSTC's (Customer Service Telephone Centers) from one in each district to one or two for the entire country. They talked about how we were becoming the high cost provider, and losing market share, and had to control the growth of costs.

Cost vs service causing the loss of market share is a good question and one very difficult to answer. I can say that our total service numbers to our customers have not been much better over all than they are now, and are in most cases on par or better than our competition. I also know that most of our customers who leave us cite price as the largest issue on picking a competitor. My estimation is that while our inability to be competitive on price is not the only reason we are losing ground in market share, it is the single largest.

I absolutely do not blame the 30% loss of market share solely on the 1997 contract. But UPS was unable to stem the rising cost of what is, and absolutely should be, our largest expense- the labor costs. So I would consider it a major factor.

 

[brownIEman]

All the 1997 strike really did to some of our customers is impress upon them that diversifying their shipping sources was a prudent move. UPS has exacerbated that by raising rates every single year without fail. Sure, fuel charges have been screwing the pooch the last decade or so but why don't we be proactive like Delta Airlines and buy our own refinery? Lots of creative ways we could become more competitive and a stronger company and none of it involves screwing over the Teamsters who helped build this Company.

I like the thinking behind the refinery idea. That is getting creative. I do not believe it would work for us though. Fuel is a much larger percentage of total cost for Delta than for us, it is their largest expense by far. So the money invested would get paid back by the savings in a relatively short time. I do not know what the break even point for UPS to buy a refinery would be, but I would estimate a long, long time, maybe a hundred years? I really don't know.

I get that you would rather screw over, as you put it, those in management than the Teamsters employees of UPS. Given that you are in the Teamsters, plus adding in the fact that you clearly despise those of us in management, I find that completely understandable. You will be happy to know that since the 1997 failure to share the burden of controlling rising costs with the Teamsters, UPS has been doing just that, and screwing over Management. Benefits have been cut, and part of their cost shifted to management employees, the ranks have been and continue to be thinned. From a cost containment stand point, all well and good.

There are many other areas where UPS can and has controlled the growth of costs. The real problem is that these are the smaller costs. It would be like a family getting an older car to reduce car payments, raising their thermostat and watching water use to lower their utility bills, and then wondering why their monthly expenses keep going up, as they ignore the ballooning payments on their adjustable mortgage. You cannot effectively control costs if you persist in ignoring the largest expense you have.

I suppose we could just stop raising rates in response to rising costs. We would soon then be loosing money instead of making it. We would wind up having to borrow to keep our operation running. We would of course win back more business, no doubt, with lower rates. So maybe we could get more investors. Maybe change our tag line from the gawd awful we heart logistics to "We are moving more packages than ever before, and losing money on each and every one of them!!" But I am guessing most savvy investors would recognize that for the death spiral it would be.

 

[Coldworld]

I believe the numbers used to calculate market share do include surepost. In fact, those packages would actually sort of "double dip", as UPS would report them in its daily delivery volume numbers, since we do indeed deliver them to the post office. The USPS would also count them, as they deliver to final consignee. The end effect should be a wash or close to it.

You are absolutely correct, the small package market has grown incredibly due to the massive change in retail from the internet, and other factors. The pie has grown tremendously. So much so that even though our piece is only 50% now compared to 80%, that 50% piece is a much larger total. Which is fine for now. But what happens if the growth in the market slows and our percentage continues to decline? It also does not matter how big the pie gets, if our percentage of it drops to zero. The company saw this a long time ago. I remember being in a meeting in 1995 discussing cost cutting measures such as consolidating the CSTC's (Customer Service Telephone Centers) from one in each district to one or two for the entire country. They talked about how we were becoming the high cost provider, and losing market share, and had to control the growth of costs.

Cost vs service causing the loss of market share is a good question and one very difficult to answer. I can say that our total service numbers to our customers have not been much better over all than they are now, and are in most cases on par or better than our competition. I also know that most of our customers who leave us cite price as the largest issue on picking a competitor. My estimation is that while our inability to be competitive on price is not the only reason we are losing ground in market share, it is the single largest.

I absolutely do not blame the 30% loss of market share solely on the 1997 contract. But UPS was unable to stem the rising cost of what is, and absolutely should be, our largest expense- the labor costs. So I would consider it a major factor.

Labor costs can be associated with management....is this not correct?

 

[Coldworld]

I do NOT know about the 50% figure, but I DO know this....

FedEx ground is now moving somewhere around 4 million packages per day. We definitely lost market share to FedEx.

Market research shows that our ground service is noticeably better than FedEx ground. Customers (in general) are not leaving due to service (again, generally). Price is a MAJOR factor, but they are also looking for some easier to use services.

If you look at MyChoice, it is directed to the consignee. The hope is that it can differentiate us in the marketplace and have consignees request UPS for shipping.

Unfortunately, shippers want lower cost. It costs FedEx ground about 60% of what it costs UPS to put on a driver. And since they are NOT employees, FedEx does not have to worry about OJS rides, performance, etc.....

Finally, Surepost is a response to FedEx smartpost. It is for customers what want an even lower cost, lower frills service.

I did NOT put the blame on 1997, although it is a piece. RPS was taking away our volume before 1997. 1997 gave shippers another reason. Take a look at what FedEx does. They promote to shippers that they are more stable because they are non-union.

Its a good thing that UPS and the Teamsters will start negotiations early.

P, what was rps daily volume in 1997...and what was UPS ground volume for the same year???

 

[brownIEman]

Labor costs can be associated with management....is this not correct?

Not sure what you mean by associated?

Are you saying management are a type of labor cost to a company? If so, then absolutely, this is a type of labor cost. UPS has worked to control the rise of this cost by reducing management's health benefits package and shifting a portion of the cost of that package onto management employees, reduced raises, eliminated the defined benefit pension for management since 2008, and reduced the ranks etc.

All good ideas for a company trying to control rising costs, but as I have said, this is one of the smaller costs.