Channahon,
UPS' bread and butter is the ground package. Am I correct? Is this also the least profitable parcel? Aren't we doing well in growing air and international volume?
I think service providers play a large role in keeping customers happy and thus retaining our business. From what I observe, most service providers participate in the sales lead program and steer the BD people in the right direction.
With all the effort of our drivers we are still losing the groung volume. Is it due to our drivers pissing customers off? Is it due to our drivers not producing sales leads?
My guess is probably not. Our drivers have been pissing customers off for years. The ones that do never change.
Then possibly UPS has higher costs than the competition and people will always shop for the lower price. Does that mean the drivers are overpaid?
I would suggest that UPS drivers get paid the most, but their routes are more efficient, their methods are more efficient, and their volume is higher than DHL or Fed-Ex and should warrant a higher wage.
So my question is, why are we losing volume? And why hasn't the stock price moved in 8 years?
Thanks in advance for your insight.[/quote
Profitabiltiy goes both ways at UPS, at the origin and destination. The district is held accountable to profit numbers, to ensure UPS is proposing contractual rates to our shippers, and still be profitable on the deivery end of the cycle.
The more ground packages delivered to one stop, the more money UPS makes at that stop. Add premium packages with ground, if within time commit, that's a cha-ching for UPS.
As any BD person will tell you, their approach to selling a customer on UPS is not our rates, but "bundled solutions" for all their shipping needs. Technology(tracking, tracing, performance reports, exception notifications) and other UPS subsidiaries can be involved the the shipping needs of our customers. I have seen where UPS shippers have chosen to go solely with Supply Chain Solutions, so we still have the account, but the carrier for packages is not always UPS.
Our drivers are not overpaid, however, our drivers should try to contain their emotions, in not pissing off our customers. I know this can be hard to do sometimes, but they should notifiy their management team if an issue arises with a customer, regardless of the issue.
Diverting to another carrier, personality conflicts with any UPS employee.
Sometimes our customers leave UPS due to claims issues: damages, theft, driver release, misdeliveries, etc. And I can tell you, our drug, computer, electronic and video games shippers hold UPS accountable to find solutions, if UPS wants to keep their accounts.
I know the Sales Lead program is a sensitive subject for our drivers and operations management. In some cases, no follow up done by BD and drivers sometimes feel their efforts were not appreciated. I do believe this has been addressed and hopefully is getting better.
As far as UPS stock not moving along over the years. Word is Wall Street doesn't really care what you did when quaterly results are released. Although, they are looking for companies to make their targets. Wall Street wants to know what your future holds and how you are going to get the results.
I wish I had a crystal ball, as probably everyone else does. Although the price is not desirable, the dividends have increased over the years.
Feb 2000 - 17 cents a share - May 2007 - 42 cents per share.
