Let's work the numbers on forced overtime

[onestoptogo]

I Just finished a pretty big week of work and decided to run the numbers on what I made last week with a couple of routes being cut out. I can't really complain, but I'm sure that eventually management is going to realize that the current trend of forced overtime is not cost effective. I'm on the no 9.5 list and had a 8 hour request denied this week.

Total hours worked: 52.0

Regular hours : 40 X $30 = $1200

Overtime hours : 12.0 X $45 = $540

Triple time hours : 4.5 X $45 = $202.50

Denied 8hr request : 2 X $30 = $60

Total pay for the week: = $2002.50


Now since the triple time hours and the denied 8hr request resulted in no additional productivity to the center $262.50 in the week was basically lost with no benefit to UPS (but not to me).

Now say one route is added to reduce my total hours by 1 hour per day and seven other drivers by 1 hour per day. The cost of this added driver is 8hr X $30 X 5 (days) =$1200.

The Savings in reduced overtime is 8hr X $45 X 5 (days) = $1800

I would lose my triple time hour and 8 hr request pay saving = $262.50

Total savings would be $1800 + $262.50 - $1200 =$862 in one week or $3448 during a entire month.

Now I understand that UPS has to pay for a additional vehicle and pension contributions for the additional driver, but no way does that cost $3448 per month.

Tell me this is not madness.

 

[bumped]

What is the denied 8hr pay?

 

[onestoptogo]

A denied 8 hour request after it has been approved is paid by a two hour penalty pay at straight time.

 

[Re-Raise]

Brother we have all been asking this same question of our management team every day.

We are not stupid, just explain it to me and I promise I will explain it to every driver in my center.

Our driver sup told me on a ride our cost per piece goes up whenever we cut routes but they are still told to do it.

If someone involved in this decision making process has any insight I would love to hear it.

If a customer asks me why UPS lays off drivers to pay other drivers time and a half I would love to be able to answer them.

Please tell me how they eliminate pension or benefit contributions to offset the increase in pay... I really want to understand.

 

[onestoptogo]

UPS saves money on pension contributions by forcing overtime, because they only contribute up to a maximum of 2080 hours. Since many of us will be at 2400 plus hours they do not have to pay anything on those hours above 2080 that they would have to if another driver was on the road. The way to fix this is to have them contribute for ALL hours without a cap. Still, I can't believe it is cheaper since at overime we make $15 dollars more per hour and they don't contribute nowhere near that amount to the pension fund.
I'm with Re-Raise and please explain it to us. The only thing I can think of is they can't . Maybe somebody way up does not want to admit to making a mistake.

 

[wolfman1]

UPS saves money on pension contributions by forcing overtime, because they only contribute up to a maximum of 2080 hours. Since many of us will be at 2400 plus hours they do not have to pay anything on those hours above 2080 that they would have to if another driver was on the road. The way to fix this is to have them contribute for ALL hours without a cap. Still, I can't believe it is cheaper since at overime we make $15 dollars more per hour and they don't contribute nowhere near that amount to the pension fund.
I'm with Re-Raise and please explain it to us. The only thing I can think of is they can't . Maybe somebody way up does not want to admit to making a mistake.

Cost for health & welfare $1222. Pension 1446. Total benifit cost per month $2668. onestoptogo`s $3448 -$2668= $780 Another driver on road extra costs are vehicle,vacations,personals,sick days, this will take a big chunk out of the that $780. Plus you know the company also figures by loading more work on the drivers, productivity will also goes up. The bean counter is going with keeping your workload high for now and maybe forever.

 

[browniehound]

I Just finished a pretty big week of work and decided to run the numbers on what I made last week with a couple of routes being cut out. I can't really complain, but I'm sure that eventually management is going to realize that the current trend of forced overtime is not cost effective. I'm on the no 9.5 list and had a 8 hour request denied this week.

Total hours worked: 52.0

Regular hours : 40 X $30 = $1200

Overtime hours : 12.0 X $45 = $540

Triple time hours : 4.5 X $45 = $202.50

Denied 8hr request : 2 X $30 = $60

Total pay for the week: = $2002.50


Now since the triple time hours and the denied 8hr request resulted in no additional productivity to the center $262.50 in the week was basically lost with no benefit to UPS (but not to me).

Now say one route is added to reduce my total hours by 1 hour per day and seven other drivers by 1 hour per day. The cost of this added driver is 8hr X $30 X 5 (days) =$1200.

The Savings in reduced overtime is 8hr X $45 X 5 (days) = $1800

I would lose my triple time hour and 8 hr request pay saving = $262.50

Total savings would be $1800 + $262.50 - $1200 =$862 in one week or $3448 during a entire month.

Now I understand that UPS has to pay for a additional vehicle and pension contributions for the additional driver, but no way does that cost $3448 per month.

Tell me this is not madness.

This is a GREAT post! Thanks for doing the math and breaking it down as you did. In light of your math and post, I'm trying to play 'devil's advocate' here and find a way to argue against you. I can't.

In running any business, you cut cost at every chance and I understand that. However, UPS does it blindly and I'll explain. Say the center runs 9 routes and the volume is low for the day. So they cut a route because it makes sense. This might work because the 8 other routes are light and can absorb the extra hour of work and all is good.

Problems arise when the center runs 40 routes and none of them are light. They break up a route and give business stops to routes that already have too many businesses. Also, they put these businesses at the end of your EDD or trace. What the heck is up with that? In the process, UPS saves money on wear and tear on the truck and thats it. It only saves fuel on the "to and from miles" to the area and thats it too.

They don't save labor costs because if you cut my route on Monday, I'm guaranteed 8 hours of work from the time I'm told to report for work: 835. If they cut my route and a junior driver is working they have to find me work. They don't cut my route on Mondays but they cut the route next to me. The driver has been with the company for 1/4 of a century and the ask him "Do you want the day?" "Why not just take the day?" No. He insisted on his 8 hours and they said "Come back for the day sort at 1230"
He said NO, I want my 8 starting at 835 and its his contractual right if a junior teamster is working and 95% of the center is junior to the guy.

The center manager had no choice but to work him. They started out with him watching a few safety videos and then an 1.25 hours of Haz-Mat training and then a shuttle of a few packages to other centers in the area. I don't know what he did after this but he got his 8.

Which brings me to my point(yes, I do have one).. Since no manager actually owns the business they don't care about cuts that hurt his business. On paper, running 39 routes is better than running 40.

Looks great, doesn't it? However, when you have to pay the 40th guy to watch vidoes and eat popcorn and then send him on a 130 mile ride to an airport to get a package, you are not saving any money. You are actually burning it.

Even without the driver demanding his 8, UPS is screwing themselves by cutting the route. Now you're paying 5-6 guys an extra hour of OT to deliver the spoils of the cut route.

In the end we have a driver making a days pay to not do his route and 5 other drivers working an extra hour of OT to do his route!

What am I missing here? How are we saving money?

It just proves that there is so much efficency built into these routes and the UPS systems that you could put me(HA HA) in as division manager and the operation would not miss a beat!

 

[dilligaf]

Brownie, you also have a great post but neither one of you even touched upon the additional costs of service failures. M/T they broke out 1 rte that services 1 whole town. On M, by breaking out that rte there were numerous service failures. Everything from ground to NDA's. The NDA's are not on an early commit. Of course all these service failures were businesses. How much is that going to cost the company nationwide? The numbers are going to be astronomical.

 

[QKRSTKR]

fuzzy math anyone? Seems no one understands, maybe not even at the top. Why pay $45 an hour to do res. stops? 3 hous of OT doing the easiest stops of the day. Pick ups r done. Business s r done(or missed) No more stress. Idont want to work that late, But besides getting home late, its the easiest part of the day. The long hours get old fast though.

 

[brownmonster]

Triple time and penalty for denied 8 hours? I just had a 9 hour 8 hour on friday. Never heard of penalty pay.

 

[grgrcr88]

Triple time and penalty for denied 8 hours? I just had a 9 hour 8 hour on friday. Never heard of penalty pay.

If your in the central we have different 8hr day language, no penalty pay. But we do not have the 8.5 hr allowance for the company either.

 

[Jones]

I Just finished a pretty big week of work and decided to run the numbers on what I made last week with a couple of routes being cut out. I can't really complain, but I'm sure that eventually management is going to realize that the current trend of forced overtime is not cost effective. I'm on the no 9.5 list and had a 8 hour request denied this week.

Total hours worked: 52.0

Regular hours : 40 X $30 = $1200

Overtime hours : 12.0 X $45 = $540

Triple time hours : 4.5 X $45 = $202.50

Denied 8hr request : 2 X $30 = $60

Total pay for the week: = $2002.50


Now since the triple time hours and the denied 8hr request resulted in no additional productivity to the center $262.50 in the week was basically lost with no benefit to UPS (but not to me).

Now say one route is added to reduce my total hours by 1 hour per day and seven other drivers by 1 hour per day. The cost of this added driver is 8hr X $30 X 5 (days) =$1200.

The Savings in reduced overtime is 8hr X $45 X 5 (days) = $1800

I would lose my triple time hour and 8 hr request pay saving = $262.50

Total savings would be $1800 + $262.50 - $1200 =$862 in one week or $3448 during a entire month.

Now I understand that UPS has to pay for a additional vehicle and pension contributions for the additional driver, but no way does that cost $3448 per month.

Tell me this is not madness.

Shouldn't that triple time be 4.5 X 60 = $270.00 ?

*edit - nm, I see what you did

 

[grgrcr88]

Shouldn't that triple time be 4.5 X 60 = $270.00 ?

actually it should be 4.5 X 90=405

Yea, me too. Im a little slow but i see it now!!

 

[wolfman1]

Cost for health & welfare $1222. Pension 1446. Total benifit cost per month $2668. onestoptogo`s $3448 -$2668= $780 Another driver on road extra costs are vehicle,vacations,personals,sick days, this will take a big chunk out of the that $780. Plus you know the company also figures by loading more work on the drivers, productivity will also goes up. The bean counter is going with keeping your workload high for now and maybe forever.

I just want to add the bean counter is looking at getting the job done with the least amount of employees and equipment possible. This makes him look good to his boss. Even if the company isn`t really saving alot of $$ by doing this way

 

[Re-Raise]

I am in 710 and article 21 says the company will contribute $349 a week for each full-time employee.

It doesn't say that they have to work a certain number of days for the weekly contribution to be made. If they cut a route on Monday and Tuesday how does that save them on pension contributions?

As far as vacations article 7 says you only have to work 1250 hours to receive your full vacation pay.

Insurance does not lapse if you are laid off a couple of days a week.

Unless they are claiming some ability to hire fewer employees in the future , I still don't get the savings.

 

[Catatonic]

I Just finished a pretty big week of work and decided to run the numbers on what I made last week with a couple of routes being cut out. I can't really complain, but I'm sure that eventually management is going to realize that the current trend of forced overtime is not cost effective. I'm on the no 9.5 list and had a 8 hour request denied this week.

Total hours worked: 52.0

Regular hours : 40 X $30 = $1200

Overtime hours : 12.0 X $45 = $540

Triple time hours : 4.5 X $45 = $202.50

Denied 8hr request : 2 X $30 = $60

Total pay for the week: = $2002.50


Now since the triple time hours and the denied 8hr request resulted in no additional productivity to the center $262.50 in the week was basically lost with no benefit to UPS (but not to me).

Now say one route is added to reduce my total hours by 1 hour per day and seven other drivers by 1 hour per day. The cost of this added driver is 8hr X $30 X 5 (days) =$1200.

The Savings in reduced overtime is 8hr X $45 X 5 (days) = $1800

I would lose my triple time hour and 8 hr request pay saving = $262.50

Total savings would be $1800 + $262.50 - $1200 =$862 in one week or $3448 during a entire month.

Now I understand that UPS has to pay for a additional vehicle and pension contributions for the additional driver, but no way does that cost $3448 per month.

Tell me this is not madness.

Your base assumption that this done to save money is the issue.
Because of the complexities and latency in measurement of cost (monthly is the period that the center manager gets to see this) measurements are developed that are believed to indirectly relate to cost.
It use to be SPORH and now it appears to be "Stops per Car Dispatched".
This is always the downfall of measuring an indirect number instead of a direct number.
If UPS develops the ability to develop a true planing tool based on projecting true variable costs, then the local management will use that.
WARNING - That does not mean that the local drivers will see any difference in dispatch but then again, they may.

 

[Re-Raise]

Your base assumption that this done to save money is the issue.
Because of the complexities and latency in measurement of cost (monthly is the period that the center manager gets to see this) measurements are developed that are believed to indirectly relate to cost.
It use to be SPORH and now it appears to be "Stops per Car Dispatched".
This is always the downfall of measuring an indirect number instead of a direct number.
If UPS develops the ability to develop a true planing tool based on projecting true variable costs, then the local management will use that.
WARNING - That does not mean that the local drivers will see any difference in dispatch but then again, they may.

I love it. How often are these indirect measurements evaluated?

So how long are we tied to "measurements that are believed to indirectly relate to cost."? Even when our local management concedes that it increases our cost per piece for delivery.

I swear we have somehow managed to stay in business in spite of management not because of it.

 

[soberups]

We are overlooking the most important fact here---that UPS's entire business model is predicated upon coercing as many employees as possible to work off of the clock.

They are doing this at my center now. The center average paid day is 10.5 hours on a 77 route center.

Lets say 36 of those drivers knuckle under and work through their required minimum 1/2 hr lunch in order to get home to their families by 9:00 at night. That equals 18 hours of free labor, which is the equivalent of two full routes eliminated and two FT employees dropped from the payroll.

The company is more than willing to pay the overtime and even the triple-time penalty pay to those who are willing to file, because they are getting it all back from the ones who have surrendered and are skipping lunch in order to have some semblance of a life after work.

The brutal reality here is that some soulless bastard from I.E, sitting in a dark little room with no air in it, has done all of the math, crunched all the numbers onto a spreadsheet, and calculated down to the last dime how many drivers he can screw out of half an hour's pay per day just by rigging the allowances and mandating an impossible number of stops per car that each center has to dispatch in order to meet its quota.

The contract means nothing; common sense means nothing; the reality of what is necessary to run the operation and provide quality service to our customers in a rational, efficient manner means nothing. It has all been reduced to a simple, inhuman, impossible metric that must be generated. The center manager has been reduced to a powerless puppet who will either generate that metric or be replaced by another puppet who can.

 

[wolfman1]

I am in 710 and article 21 says the company will contribute $349 a week for each full-time employee.

It doesn't say that they have to work a certain number of days for the weekly contribution to be made. If they cut a route on Monday and Tuesday how does that save them on pension contributions?

As far as vacations article 7 says you only have to work 1250 hours to receive your full vacation pay.

Insurance does not lapse if you are laid off a couple of days a week.

Unless they are claiming some ability to hire fewer employees in the future , I still don't get the savings.

Are you saying $349 a week for both health and pension benifits? I can hardly believe that. You might want to check that again. Benifits are paid based upon your regular 40 hour week not including hours worked as overtime. So if someone works 50 hours a week and someone else works 60 hours , UPS still pays the same per month for each worker.

 

[UpstateNYUPSer(Ret)]

Are you saying $349 a week for both health and pension benifits? I can hardly believe that. You might want to check that again. Benifits are paid based upon your regular 40 hour week not including hours worked as overtime. So if someone works 50 hours a week and someone else works 60 hours , UPS still pays the same per month for each worker.

The $349/week is just about right. Here in Upstate NY UPS pays $8.565/hr toward our health and pension benefits, which works out to $342.60/week based on a 40 hour week. There are no payments for hours worked beyond 40. Our pension is in critical status so the next four split raises are going toward the pension.