The lay offs can be partially blamed on the economy, but the reason air volume is down is the cost, plus the fuel surcharge. I don't know about you in Alaska, but gas is back down under $2 a gallon yet ups is still charging the fuel surcharge.
As I said earlier, I don't have firsthand knowledge of what is happening at DFW and CAE, only e-mails that I've seen and been copied on.
From what I've gathered as Red has said, the employees will find work elsewhere with UPS, either at other facilities or on other shifts.
Red, as for the fuel surcharge, keep in mind that it is based on the fuel costs two months ago. Come January, while we are raising rates, it will be cheaper to ship with UPS than it was back in July/August/September with the Fuel Cost.
For the first time in a long time, the Air/International Fuel Surcharge will be under 10% and the Ground will be in the 4% neighborhood (Keep in mind that's all based off the November Jet Fuel and On-Road Diesel prices).
It's going to take some time to come back down completely, I imagine if Fuel Continues at it's current pace, we will see a reduction of almost nothing on ground and a few percentage points on air/international.
Also keep in mind that Diesel prices have not come down as quickly as Unleaded Gasoline. It's still averaging a good $1 more a gallon across the country.
I would imagine that part of the reason that DFW and CAE are having the NDA Sorts pulled back to WorldPort is in part because of fuel costs based on volume that those locations are handling. It's not like the Air Cargo where it is being moved to another regional facility. Based on that, I would not be surprised if in 9-36 months we hear an annoucement that the sort is coming back because of a return of the volume.
One of the things that we are faced with as a company is a trade-down of product. People realizing that ground will work for what they need and that things aren't as time sensative as they had been before. This is happening with FedEx and was happening to DHL as well. I'm not sure if the NDA Volume will ever quite return to what it was, but only the future will tell.