Rate hikes

I have often wondered what would happen if UPS did not raise their rates just once. Wouldn't that just drive fdx nuts!

 

It would be interesting to see what would happen if we didn't raise rates for a year. Would it help us get new customers and maybe some new switch over customers from FEDEX? It will never happen. We don't look to far in the distance or take chances as a company. Would there be enough new business to off set the lower rates? Don't know but it would be interesting to see what would happen.

 

We raise our rates because its profitable to. FedEx is better because of it, and UPS is better because of it. To not raise our rates suggest to FedEx we are interested in competing on price. Competing on price tends to lead to a "price war".

The absolute last thing we want is a price war in the transportation business. We are absolutely not the "low cost producer" in transportation so the eventual result of a price war is we lose. We arent the low cost producer partly due to the teamsters, and partly due to the ridiculous amount of redundant management who do nothing but ask their boss for permission to do things.

FedEx raises its rates, so UPS raises its too. If we kept our rates where they are FedEx would simply lower its rates back to where they were. We wouldn't get much/any extra business from it because FedEx would lower right back to where they were.

So the choice really boils down to "get more profit" (by raising rates) or "keep existing profit" (by leaving our rates alone)

If you were leading UPS, which would you choose?

 

With continuing cost cutting measures and rate hikes, UPS and FDX are adding millions maybe billions to their bottom line. Its simple, our companies are saying to the customers; if you want to use our services, this is what its going to cost.

Of course, you know who will end up paying all these new increases? You got it, Mr/Mrs Consumer.

 

Of course it is profitable and I have news for you - UPS was hiking rates way before FEDEX existed. Don't you get it, rates are raised to pay for yearly increases in union contracts. and since management is not under contract their salaries can be frozen so, throw them out of your equation. FEDEX does not have to increase employee pay so, the additional profit can go in Fred's pocket.