Rumor some big accounts going to fed ex.

Limper

Out For Delivery
Anyone remember that "revamped marketing department" plan from a couple years ago that blew up? The same
clueless managers that cut routes a week before Christmas are the ones in charge of growing the business.
 

'Lord Brown's bidding'

Well-Known Member
Jack, the independent contractor model has permeated modern business, far outside our industry. You wouldn't just be taking on FedEx, but many other businesses. And somehow FedEx' model has gotten over in the courts, so it won't go away that way. A serious effort needs to be mounted to organize FedEx ground, one contractor at a time. The union has to get the low hanging fruit first, the hub workers, who are FedEx employees, raise Ground's cost of doing business a little bit.
 

Ms.PacMan

Well-Known Member
People absolutely hate SmartPost. So if UPS volume is diverted to FedEx SmartPost, people may just see more value in upgrading to Amazon Prime. If UPS can retain the air volume then we may have a winning proposition.

Has anyone heard what level of service FedEx plans to use for Amazon? They currently use SmartPost for most of the super saver shipping delivered by FedEx.
 

'Lord Brown's bidding'

Well-Known Member
These rumors always swirl around contract time.
This type of smoke and mirror scare tactics wont cloud the fact that this company is raking in record profits.
We should not accept any concessions in the upcoming contract.

Whenever someone points out the record profits I think about how wonderful the economy was doing before the recession, how nothinf as bad as it got seemed likely. For many though, the writing was on the wall and they knew what was coming. For some reason, UPS' "record profits" sound hollow to me, propped up by raising rates and cutting, cutting, cutting. It's like a bubble that I fear will pop, causing hurt to many.
 

ppHATE

Active Member
it's like an annual thing where we swap accounts... i've seen accounts leave one year then get replaced by one that left a year ago but now wants to return. I think these large shippers just take advantage of who is giving the best deal at any given moment.
 

Bubblehead

My Senior Picture
Whenever someone points out the record profits I think about how wonderful the economy was doing before the recession, how nothinf as bad as it got seemed likely. For many though, the writing was on the wall and they knew what was coming. For some reason, UPS' "record profits" sound hollow to me, propped up by raising rates and cutting, cutting, cutting. It's like a bubble that I fear will pop, causing hurt to many.

As you said, UPS is recording these record profits in a down economy.
If and when things turn, we are in a tremendous position to dominate.
Either way, e-commerce isn't going anywhere.

WE NEED NOT ENTERTAIN ANY CONCESSIONS IN THE UPCOMING CONTRACT!!!
 

slantnosechevy

Well-Known Member
As you said, UPS is recording these record profits in a down economy.
If and when things turn, we are in a tremendous position to dominate.
Either way, e-commerce isn't going anywhere.

WE NEED NOT ENTERTAIN ANY CONCESSIONS IN THE UPCOMING CONTRACT!!!

Concessions are not the answer for those looking for lighter dispatches and shorter days. The Mother Ship is storing memory on what we do every minute of the day. They continue to push to find out just how much the human body can take .Production is king not safety. They don't care if we can only last 10 years. 10 years is more than a reasonable return on their training investment. If UPS received concessions they wouldn't reduce their rates. It would just go towards paying higher dividends to the shareholders. That's where they're behind.
 

Catatonic

Nine Lives
It would just go towards paying higher dividends to the shareholders. That's where they're behind.

Yep, my take too and it's going to be very hard to do. Other than the huge common sense of diversification, the relatively low dividend yield is why I have sold most my UPS stock.
 

Limper

Out For Delivery
Yep, my take too and it's going to be very hard to do. Other than the huge common sense of diversification, the relatively low dividend yield is why I have sold most my UPS stock.

You sold most of your stock??? I thought all of you kool-aid drinking managers were "true believers"?
 

barnyard

KTM rider
Henry Schein? Apple?

Losing Schein seems like that could be a good thing/bad thing. I am sure it is a ton of volume, but it seems like there are lots of damages, Dentist offices are a HUGE pain to deliver to, the one's I have been to take too much time and effort to get to where the packages need to go. My experience has been that Schein gets HWT discounts to places that are very time consuming to deliver to.
 

BrownSuit

Well-Known Member
Not sure the specifics of the Amazon rumor, but as was pointed out Amazon has dual sourced for their prime business for some time now. With the additional DC's that they are adding across the country, they have transitioned more and more of their "Prime" business from Air to Ground which you could assume would result in lower revenues across the board from both FedEx and UPS.

Keep in mind that FedEx Home Delivery delivers on Saturday instead of Monday which would enable shippers that dual source like Amazon to ship with one carrier for Thursday/Friday shipments that would be delivered on Saturday when Time-in-Transit is important to their customers.

As for time-in-transit, there will always be areas where one carrier is superior over another. There are companies that are well aware of which carrier has better Time-in-Transit to certain lanes and if they are dual sourcing and they were paying the same price, it would be foolish for them not to use the carrier with the lower transit time.

Price has been mentioned quite a bit in this thread. If you purchase an item on Amazon Prime you are paying an annual fee for shipping ($79 last I checked), but nothing for shipping and no minimums. This means you could purchase a $5 item no shipping. Do this enough and that $79 which also pays for other things on Amazon in theory (Think Kindle Library, Instant Video, and Cloud Services) no longer covers your shipping costs. If you read some of the recent postings about their stock, they are hemorrhaging profits in their transportation costs. This is the main reason for opening the DC's which forced them in many states to collect sales tax, something they tried a long time to avoid. Investor news would also point out a sizable bond offering to raise money for, opening yet more DC's.

So if you were Amazon, you would move to the low-cost provider no matter what the reason. UPS delivered more additional packages last Thursday from a normal day that FedEx does on a normal day. FedEx has been opening new Ground facilities across the country and has to fill them. Despite their news releases to the contrary, it's obvious they are not concerned about margins when they cannot fill capacity.

The question is, does UPS really want this business? If we are losing money, definitely not. We are not the Post Office and do not lose $25M daily. Do we need to do a better job in the next contract controlling costs? I would concur with previous comments in this thread that stronger 9.5 language that results in the addition of more routes could take care of that, but at what cost to those employees?

A $28/hour employee who receives 15 hours of OT for 45 weeks (Vacation, Holidays, Option Days, etc) is making an extra $28K a year. What happens when we add more routes, providing better service to our customers and eliminate that OT effectively cutting annual salary by a third? Sure more time with the family is worth it in the long run, but I fear too many people have come to depend on this additional money.
 
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beentheredonethat

Well-Known Member
What no one mentions is amazon is losing money. Their margins are so small they don't exist.

AMZN Income Statement | Amazon.com, Inc. Stock - Yahoo! Finance

Percentage wise they don't make much money. But if you look at the last three years, they have made 902 Million, 1.1 Billion, and 631 Million in After Tax profit over the last three years. It's funny, this company that averages almost a billion a year in before tax profits on average over the last three years "Doesn't make money". Yet at same time other people on this forum says "UPS makes Billions we deserve more (fair share) in the next contract". My question is billions of profit not much money or is it?

Ironically, I agree with you as a percentage of sales, they don't make that much money due to their slim margins. However, I don't see amazon going anywhere but up.
 

beentheredonethat

Well-Known Member
Jack, the independent contractor model has permeated modern business, far outside our industry. You wouldn't just be taking on FedEx, but many other businesses. And somehow FedEx' model has gotten over in the courts, so it won't go away that way. A serious effort needs to be mounted to organize FedEx ground, one contractor at a time. The union has to get the low hanging fruit first, the hub workers, who are FedEx employees, raise Ground's cost of doing business a little bit.
In theory this sounds good, you can show them what a great job the teamsters have done for UPS Pt hub employees. Look at the great pay rate they make compared to FDX ground employees. Oh wait... the PT FDX employees start out making more in virtually every area compared to UPS. Or you can show them how great the pension benefits are for the teamsters. (Just ignore what happened to Central states and New England Pension funds, also ignore many other of the plans are way below 100% funding)...

The teamsters have already shown that the money in the contract has gone to FT employees vs PT. Yet you want to organize the PT FDX workforce first I get why you would want to, I just don't get why they would want you.
 
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