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UPS can't compete because of high labor costs?
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<blockquote data-quote="upssalesguy" data-source="post: 779492" data-attributes="member: 19599"><p><span style="font-family: 'Tahoma'">What do you all think UPS does with all of their money? DO you think Scott Davis sits on a pile of money, smoking Cuban cigars and laughing at teamsters?</span></p><p> </p><p><span style="font-family: 'Tahoma'">Or do you think UPS takes that money and invests it back into the business to improve technology and expand our service?</span></p><p> </p><p><span style="font-family: 'Tahoma'">The only thing I think that is missed in this thread is reality. UPS is the highest priced carrier. We also have the dominant market share. SO what does that add up to? Well, in a macro sense, it leads to UPS shrinking in the USA and growing elsewhere. Is that UPS' fault? Nope. That is what happens with competition.</span></p><p> </p><p><span style="font-family: 'Tahoma'">UPS has to be the driver of higher prices, because our costs structure is so much higher. The last pie chart I saw showed UPS spends 75% of our money on labor. FedEx spends 30-40%. They make more money per package and pay their drivers less. FedEx has built facilities already to handle UPS' market share. Their costs won’t raise that much more with carrying more packages. You all said it yourself; most of the FedEx ground trucks you see are half full. </span></p><p> </p><p><span style="font-family: 'Tahoma'">The only thing that FedEx can do to increase efficiencies even more is to integrate their networks. That will then raise their driver costs to somewhere near where you are (especially if they are organized). Fred won't let that last part happen and as long as he continues to pay independent contractors, UPS is toast when it comes to pricing.</span></p><p> </p><p><span style="font-family: 'Tahoma'">And please, don't yell at me when your "great sales lead for hundreds of packages per day" doesn’t sell because UPS could not undercut the competition on price.</span></p></blockquote><p></p>
[QUOTE="upssalesguy, post: 779492, member: 19599"] [FONT=Tahoma]What do you all think UPS does with all of their money? DO you think Scott Davis sits on a pile of money, smoking Cuban cigars and laughing at teamsters?[/FONT] [FONT=Tahoma]Or do you think UPS takes that money and invests it back into the business to improve technology and expand our service?[/FONT] [FONT=Tahoma]The only thing I think that is missed in this thread is reality. UPS is the highest priced carrier. We also have the dominant market share. SO what does that add up to? Well, in a macro sense, it leads to UPS shrinking in the USA and growing elsewhere. Is that UPS' fault? Nope. That is what happens with competition.[/FONT] [FONT=Tahoma]UPS has to be the driver of higher prices, because our costs structure is so much higher. The last pie chart I saw showed UPS spends 75% of our money on labor. FedEx spends 30-40%. They make more money per package and pay their drivers less. FedEx has built facilities already to handle UPS' market share. Their costs won’t raise that much more with carrying more packages. You all said it yourself; most of the FedEx ground trucks you see are half full. [/FONT] [FONT=Tahoma]The only thing that FedEx can do to increase efficiencies even more is to integrate their networks. That will then raise their driver costs to somewhere near where you are (especially if they are organized). Fred won't let that last part happen and as long as he continues to pay independent contractors, UPS is toast when it comes to pricing.[/FONT] [FONT=Tahoma]And please, don't yell at me when your "great sales lead for hundreds of packages per day" doesn’t sell because UPS could not undercut the competition on price.[/FONT] [/QUOTE]
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