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UPS Union Issues
Surepost causing routes to be cut
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<blockquote data-quote="worldwide" data-source="post: 864476" data-attributes="member: 2193"><p>The USPS will continue to exist--maybe with less services but it is not going anywhere. If the USPS tells UPS & Fedex they can not provide the service at the current price and the rates rise, the consumer will pay the price. If that happens, rates will rise to a position that make UPS Ground residential and Fedex Home Delivery more competitive. Until that time (assuming it ever happens), UPS must provide SurePost to compete with FHD. Could urban settings be changed? Perhaps but I would argue that more of the population lives in surburban, rural and superrural areas and the SurePost model is not designed to be geo and zip code specific for routing purposes-perhaps in the future that will change.</p><p></p><p>UPS can not stand by and let Fedex continue to take marketshare. If they can provide a comparable service as SmartPost while maintaining a profit, they are obligated to their shareholders to do so. If the profit margin of SurePost is higher than the profit margin of Ground residential, UPS should aggressively court competitor volume to go via SurePost. Fedex is certainly concentrating on SmartPost due to superior profit margins of that service. If UPS did not offer SurePost, more union jobs would go to the independent contractors at Fedex. 100% of SurePost packages are picked up, sorted and delivered by a union employee.</p><p></p><p>It all comes down to what the consumer will pay. At current rates, UPS and Fedex Home Delivery have priced themselves out of the 1-3 lb ground residential market and the USPS is the most price competitive. If the USPS ever becomes a true private business that competes on equal footing with UPS and Fedex, the story will be differnet. That will not happen, if ever, for a very long time and will literally take an act of Congress. You think the deficit legislation was tough to get through?</p><p></p><p>Union koolaid was in reference to the brown koolaid indicating blindly following UPS policies. As a shareholder of UPS stock, I beleive that UPS must offer this service to compete and grow. To do so otherwise would be a disservice to shareholders. As a public company, UPS' first responsibility is to its shareholders. That may be another debate to be had (public vs private) but as a public company, they answer to the shareholders first. Has nothing to do with UPS policies--has everything to do with UPS shareholder responsibilities. This is real life.</p></blockquote><p></p>
[QUOTE="worldwide, post: 864476, member: 2193"] The USPS will continue to exist--maybe with less services but it is not going anywhere. If the USPS tells UPS & Fedex they can not provide the service at the current price and the rates rise, the consumer will pay the price. If that happens, rates will rise to a position that make UPS Ground residential and Fedex Home Delivery more competitive. Until that time (assuming it ever happens), UPS must provide SurePost to compete with FHD. Could urban settings be changed? Perhaps but I would argue that more of the population lives in surburban, rural and superrural areas and the SurePost model is not designed to be geo and zip code specific for routing purposes-perhaps in the future that will change. UPS can not stand by and let Fedex continue to take marketshare. If they can provide a comparable service as SmartPost while maintaining a profit, they are obligated to their shareholders to do so. If the profit margin of SurePost is higher than the profit margin of Ground residential, UPS should aggressively court competitor volume to go via SurePost. Fedex is certainly concentrating on SmartPost due to superior profit margins of that service. If UPS did not offer SurePost, more union jobs would go to the independent contractors at Fedex. 100% of SurePost packages are picked up, sorted and delivered by a union employee. It all comes down to what the consumer will pay. At current rates, UPS and Fedex Home Delivery have priced themselves out of the 1-3 lb ground residential market and the USPS is the most price competitive. If the USPS ever becomes a true private business that competes on equal footing with UPS and Fedex, the story will be differnet. That will not happen, if ever, for a very long time and will literally take an act of Congress. You think the deficit legislation was tough to get through? Union koolaid was in reference to the brown koolaid indicating blindly following UPS policies. As a shareholder of UPS stock, I beleive that UPS must offer this service to compete and grow. To do so otherwise would be a disservice to shareholders. As a public company, UPS' first responsibility is to its shareholders. That may be another debate to be had (public vs private) but as a public company, they answer to the shareholders first. Has nothing to do with UPS policies--has everything to do with UPS shareholder responsibilities. This is real life. [/QUOTE]
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