The FedEx Ground Threat

[Limper]

You have some very good ideas concerning coding for sales lead time.

My point about service was one of competitiveness with FedEx and USPS. My eBayer on my route tells me UPS can't touch Postal rates until over 20 lbs. then we actually become cheaper. Why can't UPS provide "hard data" on rates,
that we can then take to new customers? Are they afraid to get us more involved?

SurePost doesn't get me too worked up. A lot of that work we wouldn't have otherwise. Customers hate it? Hey, its
called FREE SHIPPING. Let 'em purchase a premium service then!

 

[TUT]

Question, if for some reason Fedex were no longer allowed to use contractors. What do you think that would do for regional carriers who also use contractors? To me those regionals can really throw a curve to both of the big 2, whom have learned to live with one another.

 

[TUT]

My point about service was one of competitiveness with FedEx and USPS. My eBayer on my route tells me UPS can't touch Postal rates until over 20 lbs. then we actually become cheaper. Why can't UPS provide "hard data" on rates,
that we can then take to new customers? Are they afraid to get us more involved?

They both publish list rates, most .com offerings have some type of auto-discount for anyone who signs up. That is where you friend falls in, unless he has more volume then he has to contact UPS/Fedex for Sales representation, sized will dictate dept and discount. It's just how the world goes round, why can't I just get solid/best prices on a new car? As Al Pacino in Devils Advocate would say "Everything's Negotiable".

 

[Brown287]

Question, if for some reason Fedex were no longer allowed to use contractors. What do you think that would do for regional carriers who also use contractors? To me those regionals can really throw a curve to both of the big 2, whom have learned to live with one another.

Like I said earlier the FedEx rep I deliver too openly stated to me that OnTrac and other regionals are far more of a headache to UPS and FedEx then we are to each other. I agree though that the contractor model is being abused by many companies in many different industries. My mother does taxes and she has explained to me that there is actually a pretty straight forward tax form that has a list of questions. If you answer yes to any then your qualified an employee. This is why FedEx is constantly in need of tweaking its model. Bbsam is correct when he says that after countless court cases FedEx Ground is still operating. What he fails to mention is that their model has failed many times on court. Thus the need for them to conform.

 

[Just Numbers]

No $. UPS dropped their NASCAR sponsership. FedEx continues to sponsership the number 11 Denny Hamlin car.
Fedex continues to sponser an entire PGA golf playoff. FedEx sponsers FedEx Field. On and on...........
UPS mantra is cut, cut, cut........

Fedex can do all these things because their employee costs do not involve a union. Just the reality of the situation.

 

[Catatonic]

Fedex can do all these things because their employee costs do not involve a union. Just the reality of the situation.

FedEx does not have to pay out dividends like UPS does either.

 

[Just Numbers]

FedEx does not have to pay out dividends like UPS does either.

Hoax-Fedex does pay out qtrly dividends just like UPS. Everyone thinks UPS dividends are so great...you need to compare. Just look up ticker symbols apu or clmt and look at their stock price and dividend yield! By the way, for the year 2012 the price of UPS stock was up .074% compared with Fedex at 9.83% ( Just got these numbers from Scottrade).

 

[Catatonic]

FedEx does not have to pay out dividends like UPS does either.

Hoax-Fedex does pay out qtrly dividends just like UPS. Everyone thinks UPS dividends are so great...you need to compare. Just look up ticker symbols apu or clmt and look at their stock price and dividend yield! By the way, for the year 2012 the price of UPS stock was up .074% compared with Fedex at 9.83% ( Just got these numbers from Scottrade).

OK, I will explain myself better.
UPS has a large number of retired management and past/current Board members that own a lot of Class A stock.
The premise of that stock ownership is that UPS will pay "good" dividends to keep all this stock from being dumped.
Furthermore, FDX has an annual yield of ~0.6% while UPS has an annual yield of ~3.0%.
UPS has to set aside a larger amount of their profits to pay this expected percent yield.

As regards to % increase -
FDX has historically had a beta of 1.3 or more - a fairly volatile stock.
UPS has been .85 or so which means less volatility.
FDX (15 PE) is catching up to UPS (22 PE) in regards to their PE ratio.
Considering the similarities of the two companies, this is a large gap in PE ratios.
And remember - UPS is a dividend stock, not a growth stock.

 

[Just Numbers]

So you would like to take a dividend of .57 / share on a stock with damn near zero growth for the year rather than a stock the pays .14 / share that had an increase of over $8.00 / share for the year? Did you check out apu or clmt on their price / share and dividend / share?

 

[moreluck]

Some people just want to own stock in a fine and proud company and not some trashy looking cheap imitation.

 

[stink219]

From what I've seen of Mr. Hoffa, I expect very little.

Then you are stupid. I've met him a bunch. He is a smart friend...er. He was a corporate attorney bro. He also hates Fred S. So does ups while we are at it. We are going to win. Ups always does. Until we are beatin we are the best and everyone else will lose.

God bless

Feel the boom!! Now embrace it!! I think people that hate Hoffa are ill informed. You can say this, that and the other thing about any political figure head. (example: Current economy- Bush or Obama?) Your correct 407, I met him a dozen times. Brilliant guy.
These people that think he sells us out is crazy. When it's contract time, it's not just a Teamsters vs UPS attitude. There are many other factors to assimilate. Leave that to our labor lawyers. I'm with ya 407!!

 

[bbsam]

"Feel the boom!!"??? What does that even mean?!

 

[Catatonic]

So you would like to take a dividend of .57 / share on a stock with damn near zero growth for the year rather than a stock the pays .14 / share that had an increase of over $8.00 / share for the year? Did you check out apu or clmt on their price / share and dividend / share?

Disclaimer: I don't own any UPS or FDX stock.
I was simply responding to your post about about why UPS is under pressure to pay out dividends and consequently the need for more funds to pay those dividends as compared to FDX.

Please stay focused on the subject or provide a transition into a different line of thought.

You say you are retired and as such, active trading in stocks should be a small portion of you investment portfolio, if any.
I am just retired and over the last year I have settled into a 40% Bond portfolio (mostly Muni's in states that require a balanced budget (ie no NY, CA, IL or the like), 10% in Hedge funds, 10% in a Short Sell actively managed fund, 30% various Index funds, 10% in Dividend stock fund.

My 401k was in 100% Government STIF until last Wednesday and is currently at:

	STOCKS
	S&P 500 Equity Index Fund	40%
	S&P 400 Midcap Index Fund	20%
	Russell 2000 Index Fund	20%
	Intl Developed Cntry Eqty Index Fd	20%
	Total:	100%

Once my retirement becomes official, I will transfer my 401k to Vanguard and put most of it in
50% - AMT exempt Muni bonds
and
50% in a mix of the following stocks that pay a better dividend yield than does UPS.
I picked these because they are well known companies that have been around and have good fundamentals and excellent credit ratings ... like UPS (3.0% yield).

McDonalds - 3.0%
General Mills - 3.2%
Pepsi - 3.3%
Proctor & Gamble - 3.3%
Johnson & Johnson - 3.5%
Abbott Labs - 3.6 %
Kimberly Clark - 4.0%
Con Ed - 4.1%
Pfizer - 4.1%
Bristol-Myers Squibb - 4.2%
Southern Co - 4.4%
Merck - 4.4%
Progress Energy - 4.8%
Duke Energy - 4.9%
Eli Lilly - 5.3%
Verizon - 5.4%
AT&T - 5.9%

I don't have anything against UPS stock but I already have a UPS backed pension (valued at $1.1 M based on Annuity pricing) and a UPS backed Healthcare plan (valued at ~$110,000 or more). All of these figures are based on NPV.

I executed an 8 year plan to divest myself of UPS stock to lessen my risk via diversification.

 

[Limper]

There seems to be a false expectation among UPSers that the company stock will take off at any moment. That somehow higher pkg volume and working longer and longer hours will translate in to all of us getting rich. Taking
a long term outlook on UPS stock seems to be the correct course.

 

[Anonymous 10]

There seems to be a false expectation among UPSers that the company stock will take off at any moment. That somehow higher pkg volume and working longer and longer hours will translate in to all of us getting rich. Taking
a long term outlook on UPS stock seems to be the correct course.

Working the long hours I work keeps me middle class and the investing I do from working these long hours will make me kinda rich when I retire. Not Jay Z rich but good for a once poor kid.

 

[MaineGroundDriver]

UPS is so much bigger than FDX it's not even funny ... I don't think FDXG taking a few contracts away from them scares them .. shippers go back and forth all the time ..

MFE has an axe to grind with FDX management and he's now asking Brown to do his dirty work for him? it's hilarious ... dude needs to find a hobby!

 

[Limper]

Working the long hours I work keeps me middle class and the investing I do from working these long hours will make me kinda rich when I retire. Not Jay Z rich but good for a once poor kid.

The paycheck pays the bills - nothing more. What makes you rich are the people you cherish.

 

[Anonymous 10]

The paycheck pays the bills - nothing more. What makes you rich are the people you cherish.

Upstatenyupsr?? Upssocks???

 

[masking tape]

Article in Allentown PA newspaper today stated Fedex Ground was going to build the largest hub on Earth on the former Bethlehem Steel property within 3 years...sounds and feels threatening

 

[barnyard]

Article in Allentown PA newspaper today stated Fedex Ground was going to build the largest hub on Earth on the former Bethlehem Steel property within 3 years...sounds and feels threatening

and if they are building a huge sort facility, they will be looking for business to sort. I wonder if Amazon is planning a warehouse nearby. If that sort facility is a real thing, UPSers in PA should be nervous.