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UPS Union Issues
Surepost causing routes to be cut
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<blockquote data-quote="Catatonic" data-source="post: 866590" data-attributes="member: 7966"><p><em><span style="color: #FF0000"><strong>The Post Office is going to be pressured into not losing billions of dollars a year.</strong></span></em></p><p>I think there is a strong possibility that the USPS will declare bankruptcy and force the US Government to eliminate the over-funding of the USPS pension fund and to use previous payments to these assumed pension liabilities to eliminate the debt owed to the US Government (in other words, the US taxpayer). The USPS would be a profitable company if the US Government would quit intervening in their business and legally obligating the USPS to providing pension funding that no other private or government entity has to legally abide by.</p><p></p><p></p><p><span style="color: #FF0000"><em><strong>Many of their services lose money and surepost probably is one of them. They will have to raise the rates.</strong></em></span></p><p><span style="color: #FF0000"><em><strong></strong></em></span></p><p><span style="color: #FF0000"><em><strong>These are our packages and we should be able to land these accounts but with surepost, ups has no incentive to. With the increased residential density and multiple packages to the same address; UPS can afford to cut rates and be much more competitive with the PO.</strong></em></span></p><p><span style="color: #FF0000"><em><strong></strong></em></span></p><p>Your assumption that the USPS is losing money on SurePost and SmartPost packages is an assumption (which you indicated by saying "probably"). I don't think that is the case personally but I don't have visibility into the USPS numbers on this. If the USPS raises the rates for both UPS and FedEx that would help narrow the gap between SurePost and UPS Ground. </p><p></p><p>However, I'm not sure how converting SurePost to UPS Ground will increase the packages per stop significantly. Development and implementation of technologies at the shipper and at UPS to fine-tune the stop density is something that I hope UPS is working on. Rural and Super-Rural locations should always go to SurePost while UPS should be able to "redirect" SurePost packages on he preload to the UPS driver if it makes sense. One caveat on this, I don't know if this is allowed in the contract between UPS and the USPS. The USPS may get the revenue for a SurePost package even if UPS delivers it to the end customer.</p><p></p><p>UPS already has all the motivation needed right now to get these large shippers to choose Ground over SurePost. </p><p>UPS is mostly motivated by one thing and that is profits. </p><p>The profit on a UPS Ground package is considerably more than SurePost.</p><p></p><p>I don't see UPS cutting rates ... they will let the competition have the packages before they accept low margin packages unless there are tag-along packages with higher margins. This has been published and bantered about too much in the last two years that I really do think this is truly a UPS tactical approach to increasing their profitability.</p><p></p><p>I know what I am about to post is hard for some people to accept but ... increasing or maintaining employees is not a goal of UPS or any publicly traded corporation. </p><p>Increasing profitability is the goal of all publicly traded corporations.</p><p>I have learned to accept this business reality although I don't particularly like it or think it is the best approach for society.</p></blockquote><p></p>
[QUOTE="Catatonic, post: 866590, member: 7966"] [I][COLOR=#FF0000][B]The Post Office is going to be pressured into not losing billions of dollars a year.[/B][/COLOR][/I] I think there is a strong possibility that the USPS will declare bankruptcy and force the US Government to eliminate the over-funding of the USPS pension fund and to use previous payments to these assumed pension liabilities to eliminate the debt owed to the US Government (in other words, the US taxpayer). The USPS would be a profitable company if the US Government would quit intervening in their business and legally obligating the USPS to providing pension funding that no other private or government entity has to legally abide by. [COLOR=#FF0000][I][B]Many of their services lose money and surepost probably is one of them. They will have to raise the rates. These are our packages and we should be able to land these accounts but with surepost, ups has no incentive to. With the increased residential density and multiple packages to the same address; UPS can afford to cut rates and be much more competitive with the PO. [/B][/I][/COLOR] Your assumption that the USPS is losing money on SurePost and SmartPost packages is an assumption (which you indicated by saying "probably"). I don't think that is the case personally but I don't have visibility into the USPS numbers on this. If the USPS raises the rates for both UPS and FedEx that would help narrow the gap between SurePost and UPS Ground. However, I'm not sure how converting SurePost to UPS Ground will increase the packages per stop significantly. Development and implementation of technologies at the shipper and at UPS to fine-tune the stop density is something that I hope UPS is working on. Rural and Super-Rural locations should always go to SurePost while UPS should be able to "redirect" SurePost packages on he preload to the UPS driver if it makes sense. One caveat on this, I don't know if this is allowed in the contract between UPS and the USPS. The USPS may get the revenue for a SurePost package even if UPS delivers it to the end customer. UPS already has all the motivation needed right now to get these large shippers to choose Ground over SurePost. UPS is mostly motivated by one thing and that is profits. The profit on a UPS Ground package is considerably more than SurePost. I don't see UPS cutting rates ... they will let the competition have the packages before they accept low margin packages unless there are tag-along packages with higher margins. This has been published and bantered about too much in the last two years that I really do think this is truly a UPS tactical approach to increasing their profitability. I know what I am about to post is hard for some people to accept but ... increasing or maintaining employees is not a goal of UPS or any publicly traded corporation. Increasing profitability is the goal of all publicly traded corporations. I have learned to accept this business reality although I don't particularly like it or think it is the best approach for society. [/QUOTE]
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