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<blockquote data-quote="beentheredonethat" data-source="post: 873274" data-attributes="member: 4886"><p>OK... Let's address this one issue you brought up. That is the extra OT and the increased SPC. </p><p>I looked at last week's info and compared Last week to the same week in 2004. (Just random pulling of data). On average over the entire US, the FSP SPC went up 13 spc. The ctr sporh went up .9 , the fsp pd day went up .3 to 9.33 pd day. We delivered virtually the same number of pkgs but we did it with about 4000 less FSP. This is a corporate number not just what one ctr is experiencing, I'm sure there are some ctrs where the numbers haven't changed this much, others where the numbers changed a lot more. </p><p></p><p>I have said in other threads the following, and I'll reiterate here. I do believe that we have gone overboard on the total avg pd day. I think the pd day avg should be closer to an 8.8 vs the 9.3 we are seeing. (Excluding peak season). The main reason for my opinion, is I think is that there is a point where too much overtime will cause problems such as injuries, and accidents. Also, if we average too high a plan day during the year, it makes peak that much tougher to staff and handle the increased volume. On average, the routes near the pkg centers tend to have more business routes then the other routes. I think these routes should be known to be a lower plan pd day of closer to 8.3 - 8.4 hours. There will be many drivers that want a low paid day. However, there are many drivers that want a higher paid day, so there should be routes planned that they can bid on that will have accomodate their desire. </p><p></p><p>As to your point using your numbers and your statements. You said you make on OT $47.35/hr. You then state you have from 65 - 75 stops left at 6 PM and you can do 15 stops/hr. You then state this will take you 5 hours. (OK, so you used the 75 stops instead of the lower number or even an avg..but that's ok). You then say you only have 3 hours to 9 PM and at $47.35/hr OT that will cost UPS $143.25 for those 3 hours. Then you say it will take 2 other drivers and you an extra $429.75 for the day. OK... Check those numbers again. You just determined it will take 3 drivers (2 others and you) to each work 3 hours to do 5 hours worth of work. So if you used the $47.35/hr * 5 hours then that would be $238.75 in cost to UPS. Your calculation had 9 hours total (3 drivers * 3 hours). Your numbers said if they ran one more route it would cost UPS $256 which would be a huge savings from your calculation of $429.75. But as I just showed, your numbers are wrong. </p><p></p><p>Now you also forgot other items. I don't know how H&W and Pension works in all areas in country, I do know how it works in New England so I'm going to use that information. In New England, we contribute to the teamster HW fund and also the pension fund for each hour paid for up to 40 hours per week. So assuming a person works a full week (5 days) then UPS really has no H&W and pension costs once a driver is over 8 hours. The H&W and pension cost works out to be just about equal to the difference between OT rate and ST rate. So there really is not extra cost to UPS for the OT since it is offset by no HW&Pension costs. </p><p></p><p>But wait, there's more..... If we put less drivers on the road, overall there will be less to/fr time. To demonstrate If you have 9 drivers that work 9 hours each day and each of them averaged a 1/2 hr to get on area, and 1/2 hr to get back to ctr then each would have 8 on area hours, and 1 hour to/fr. This works out to 72 on area hours and 9 to/fr hours which is 81 total hours or 9 hrs/driver. If you add 1 driver to get to 10 routes and assuming the added driver has the same sporh. Then you would end up having 10 drivers working the same 72 on area hrs or 7.2 oah/driver Plus also 1 hr to/fr * 10 drivers. We would have 10 drivers work 8.2 hours or 82 hours total vs having 81 hours in the prior example. (Due to the extra 1 hours of to/fr time) Now, there would be less OT with this example, but now we'd have the added expense of 8 hours of HW&Pension payments also. As I already indicated HW&Pension is equal to the excess cost in OT vs the ST rate. </p><p></p><p></p><p>Let's go further.... If we add another driver we have to add more miles to get that driver on area. The extra miles means more gas.. more cost.</p><p>Also, if we add another driver, we need another car. At the very least this will mean additional PMI's for automotive. But if we do this over and over and over in all centers. We will need to purchase a lot more pkg cars, which will cost money. Then if we need more package cars, in buildings that are already near capacity, we need to expand existing buildings or build new ones. Again, this means more cost. </p><p></p><p>We have a lot more costs as you even admitted with our hourly work force. But even with this, UPS has still remained profitable. A lot of that is due to new technology and also mgmt working and getting more from our people in regards to production. </p><p></p><p>I still don't get the fact that you mention that you say how bad UPS is doing due to mgmt, and UPS is doing worse then FDX in regards to being first on road etc. When I point out FDX has a better transit footprint then UPS you ignored it. When I say that FDX is out on street first. You said that wasn't a FDX strength, it was a UPS weakness due to bad mgmt. Well, as far as customers are concerned, they don't care if FDX is better then UPS, or UPS is worse then what we should be and worse then FDX. FDX and UPS offers the same basic thing. We pick packages up, and we deliver them. Do they have weaknesses, sure. Having independent contractrors is much less costly, but there are more risks with not having the same control over their drivers. But as I said, from observations of getting packages delivered, the few I got from FDX was delivered timely and was delivered in good shape. Granted I have had a lot more pkgs delivered by UPS, Either all or virtually all were delivered timely too. However, not all packages arrived in good condition. Some arrived in pretty bad condition. If I had to score it, I'd give FDX the advantage on pkg quality from what I saw as a receiver of pkgs. I know from studying up on the subject, FDX ground routinely has a better footprint then we do. I also know from dealing with customers they are concerned about costs. Heck I have a brother who has worked in many companies as a VP in procurement. i asked him if he looks at all the nuances of what we have vs FDX. He basically said, if the rates are the same then that will tilt his decision, but if I can save a few percent with one company vs the other. I'll use the lower cost company.</p></blockquote><p></p>
[QUOTE="beentheredonethat, post: 873274, member: 4886"] OK... Let's address this one issue you brought up. That is the extra OT and the increased SPC. I looked at last week's info and compared Last week to the same week in 2004. (Just random pulling of data). On average over the entire US, the FSP SPC went up 13 spc. The ctr sporh went up .9 , the fsp pd day went up .3 to 9.33 pd day. We delivered virtually the same number of pkgs but we did it with about 4000 less FSP. This is a corporate number not just what one ctr is experiencing, I'm sure there are some ctrs where the numbers haven't changed this much, others where the numbers changed a lot more. I have said in other threads the following, and I'll reiterate here. I do believe that we have gone overboard on the total avg pd day. I think the pd day avg should be closer to an 8.8 vs the 9.3 we are seeing. (Excluding peak season). The main reason for my opinion, is I think is that there is a point where too much overtime will cause problems such as injuries, and accidents. Also, if we average too high a plan day during the year, it makes peak that much tougher to staff and handle the increased volume. On average, the routes near the pkg centers tend to have more business routes then the other routes. I think these routes should be known to be a lower plan pd day of closer to 8.3 - 8.4 hours. There will be many drivers that want a low paid day. However, there are many drivers that want a higher paid day, so there should be routes planned that they can bid on that will have accomodate their desire. As to your point using your numbers and your statements. You said you make on OT $47.35/hr. You then state you have from 65 - 75 stops left at 6 PM and you can do 15 stops/hr. You then state this will take you 5 hours. (OK, so you used the 75 stops instead of the lower number or even an avg..but that's ok). You then say you only have 3 hours to 9 PM and at $47.35/hr OT that will cost UPS $143.25 for those 3 hours. Then you say it will take 2 other drivers and you an extra $429.75 for the day. OK... Check those numbers again. You just determined it will take 3 drivers (2 others and you) to each work 3 hours to do 5 hours worth of work. So if you used the $47.35/hr * 5 hours then that would be $238.75 in cost to UPS. Your calculation had 9 hours total (3 drivers * 3 hours). Your numbers said if they ran one more route it would cost UPS $256 which would be a huge savings from your calculation of $429.75. But as I just showed, your numbers are wrong. Now you also forgot other items. I don't know how H&W and Pension works in all areas in country, I do know how it works in New England so I'm going to use that information. In New England, we contribute to the teamster HW fund and also the pension fund for each hour paid for up to 40 hours per week. So assuming a person works a full week (5 days) then UPS really has no H&W and pension costs once a driver is over 8 hours. The H&W and pension cost works out to be just about equal to the difference between OT rate and ST rate. So there really is not extra cost to UPS for the OT since it is offset by no HW&Pension costs. But wait, there's more..... If we put less drivers on the road, overall there will be less to/fr time. To demonstrate If you have 9 drivers that work 9 hours each day and each of them averaged a 1/2 hr to get on area, and 1/2 hr to get back to ctr then each would have 8 on area hours, and 1 hour to/fr. This works out to 72 on area hours and 9 to/fr hours which is 81 total hours or 9 hrs/driver. If you add 1 driver to get to 10 routes and assuming the added driver has the same sporh. Then you would end up having 10 drivers working the same 72 on area hrs or 7.2 oah/driver Plus also 1 hr to/fr * 10 drivers. We would have 10 drivers work 8.2 hours or 82 hours total vs having 81 hours in the prior example. (Due to the extra 1 hours of to/fr time) Now, there would be less OT with this example, but now we'd have the added expense of 8 hours of HW&Pension payments also. As I already indicated HW&Pension is equal to the excess cost in OT vs the ST rate. Let's go further.... If we add another driver we have to add more miles to get that driver on area. The extra miles means more gas.. more cost. Also, if we add another driver, we need another car. At the very least this will mean additional PMI's for automotive. But if we do this over and over and over in all centers. We will need to purchase a lot more pkg cars, which will cost money. Then if we need more package cars, in buildings that are already near capacity, we need to expand existing buildings or build new ones. Again, this means more cost. We have a lot more costs as you even admitted with our hourly work force. But even with this, UPS has still remained profitable. A lot of that is due to new technology and also mgmt working and getting more from our people in regards to production. I still don't get the fact that you mention that you say how bad UPS is doing due to mgmt, and UPS is doing worse then FDX in regards to being first on road etc. When I point out FDX has a better transit footprint then UPS you ignored it. When I say that FDX is out on street first. You said that wasn't a FDX strength, it was a UPS weakness due to bad mgmt. Well, as far as customers are concerned, they don't care if FDX is better then UPS, or UPS is worse then what we should be and worse then FDX. FDX and UPS offers the same basic thing. We pick packages up, and we deliver them. Do they have weaknesses, sure. Having independent contractrors is much less costly, but there are more risks with not having the same control over their drivers. But as I said, from observations of getting packages delivered, the few I got from FDX was delivered timely and was delivered in good shape. Granted I have had a lot more pkgs delivered by UPS, Either all or virtually all were delivered timely too. However, not all packages arrived in good condition. Some arrived in pretty bad condition. If I had to score it, I'd give FDX the advantage on pkg quality from what I saw as a receiver of pkgs. I know from studying up on the subject, FDX ground routinely has a better footprint then we do. I also know from dealing with customers they are concerned about costs. Heck I have a brother who has worked in many companies as a VP in procurement. i asked him if he looks at all the nuances of what we have vs FDX. He basically said, if the rates are the same then that will tilt his decision, but if I can save a few percent with one company vs the other. I'll use the lower cost company. [/QUOTE]
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