I always found it difficult to see how such numbers add up for UPS. As expensive as benefits are (health and pension), a typical hour+ of OT everyday for each of many dozens of drivers for a center is a LOT of money. I would estimate that a typical center pays out like 75 hours of OT everyday. Based on a 60 driver force. 75 OT hours = 112.5 straight hours. 112.5 hours x 5 days = 562.5 hours a week. This equals 14 more drivers working 40 hours (yes, not considering benefit costs).
So to clarify, UPS is paying for 112.5 hours of labor and getting just 75 per day for a typical center. Never mind multiplying this across the entire company. Putting more drivers on they could get the actual labor hours they're paying for.
I would think there would be more of a middle ground to how much OT to give out vs. how much it costs to add a driver with benefits.
Let's look at it this way. If a center were to add just ONE driver working 9 hours a day. That driver in effect takes 9 OT hours away. Does it really costs UPS more to compensate a driver more that OT rate per hour counting benefits? Maybe it does, I'm just wondering. Do we all cost UPS more than $50/hr TOTAL to employ us? Wow.
This wouldn't take 9 hours OT away as your added driver has an OT hour in your example. The issue is in the bennies. UPS pays an hourly charge of between $8 and $16 per hour (depending on which source you read) for every hour worked
UP TO 8 HOURS in benefits. After 8 hours that charge disappears with regard to the pension cost. Note, this is my limited understanding of a complex issue. So from our perspective its like we are getting our straight pay while at the same time getting paid the equivalent of a second job in our first 8 hours. From the company's perspective, after the 8th hour labor costs remain unchanged (not paying the cost of bennies is offset by the higher OT hourly rate) but the cost in fuel and equipment plus maintaining (wear and tear) said equipment makes it a
WIN for the company.
I think there may be other issues involved, hell I am sure of it. In the bean counter's world abstract things always play a role. The cost to provide insurance per employee is
X. If you divide
X by the 8 hours a driver works you get
Y. If that employee works 10 hours instead of 8,
Y becomes smaller. Multiply this by 100,000 drivers and we are talking millions and millions of dollars. I also think there is a statistic that says for every truck "out there" UPS can expect ____ number of accidents and ___ number of injuries. So in a twisted-tunnel vision way of seeing it, less trucks on the road would mean less injuries and accidents. twisted, just twisted I say. But I don't think this last plays a significant role as UPS posts Frequencies in relation to hours worked. But it is an example of how things could be viewed and measured.
