What do you think of this article?

[kidlogic]

480 some accounts are unprofitable. Some are low revenue and high claims. Then add Fedex ground who discounts which UPS would have to under cut to keep the account.Mix this all up and you either get low profit or none at all. Since Fedex is going to get the packages why not let them have those type of accounts and have us use discounts to target customers who have high revenue and low claims or use it to discount some company who ships international.

 

[ups_vette]

480:
Listen to kidlogic. He has been around the business world a lot longer than you and knows what he's talking about. NOT EVERY PACKAGE IS PROFITABLE. It's the wise man who knows the difference and will be sucessful. Without PROFIT, no business will be in business for long. UPS sets it rates according to its cost to handel each package a particular business ships. Those customers whos cost is greater than the revenue the pay are not welcome, unless there are other reasons such as "good will", advertising, or gaining the high profit international and air volume. The overalll profit margin for UPS is twice the overall profit margin for FedEx. This is verified by their quarterly financial results.

lifer:
I respect you views, but do not agree with them. I believe we have the same goals for our country and UPS, we just differ on how to acheive those goals.

 

[upslocal480]

<font color="0000ff">We discussed this many times in PCMs and according to our management team there is no such thing as an actual "non profitable" package but in reality there is "non profitable people" moving and recieving them. Those people are responsible for damages and missorts and other things that cause packages to lose money. They said there goal was to try and fix that problem so that each and every package would be a profit. I took it that they didn't want to dismiss those packages as non profitable and let them go away to Fed Ex Ground and instead realized that by "TRYING" to fix the problem on both ends (shipper, recievr, driver, etc.) they'd have a good shot at making sure each and every package makes a profit. UPS does ship many accounts that were mentioned as high cost to the company but when considering the size of UPS worldwide it should be understandable why even the smallest profit adds up to a huge one across the board. Put all the labels and excuses on each package and account that can be thought up but if you really want to beat the competition you should want ALL of the available work out there including the low profit or "non profit" work. Even those can be usefull.</font>

 

[kidlogic]

I think your PCM's were a pep talk on trying to keep good accounts from falling into the non-profit zone.....

 

[upslocal480]

<font color="0000ff">Maybe or maybe not but the explanation for the PCM was that we had had allot of damages on both ends and it was costing us.</font>

 

[rushfan]

I hope this article opens some eyes.

 

[8up]

we took a short trip down the interstate highway today (saturday). i don't recall when i started noticing, but first i saw 3 FedEx Freight sets running together in the opposite direction. not to much later 2 FedEx Ground sets where running together in going the the opposite direction. then a little later i saw a FedEx Air trailer following the rest of them down the highway. just before we exited i saw 1 of our sets following the FedEx herd. total score 9 trailers to 2, we only went 100 miles....

 

[afups]

I checked the FDX financial report for the past quarter on Yahoo. One thing puzzles me. It looks like they took a quarter and a billion dollars and moved it from "Cost of Revenue" to
"Administrative Expenses" but just for this quarter.

 

[proups]

480: you are right....we do damage way too many packages. Reducing damages has been, and always will be, a way for us to minimize costs. The PCMs you were referring to were accurate.

However, UPS does discount some of our shippers to the point where we do not make a profit. The reason for this is to gain market share. Market share is important on Wall Street. This isn't a bad business decision as long as we balance it (and I'm sure that we do) with many more profitable packages - like international volume.

 

[afups]

Ref my post below. Sorry I did such a sloppy job of editing. The amount in questions was one and a quarter billion dollars.

 

[dsgstdr]

I think if you compare FDX and UPS stock price and and the percentage increase of that price over the past few monthes you'll see which is the better company. I know my opinion has changed about UPS, wish I dumped right after it went public and bought FDX. Management better wake up and start answering to the stock holders. By the way hows that slush fund at OPL doing, another great fiasco at UPS!!!!!!!!!!!!

 

[afups]

The "slush fund at OPL" seems to be doing OK.

Did you really dump your UPS to buy FDX?

Baaad move..............

 

[local804]

Slush fund at OPL doing ok?????? Give me some of those drugs.

 

[tieguy]

Good lord if your going to fire a shot at us at least know what your talking about. There has never been an issue with a "slush" fund at OPL.

 

[afups]

I guess I have to be more careful about what I say. Sorry about that. A previous poster mentioned the OPL slush fund and intimated that evil doings were going on.

OPL just announced an increase in the share price from $8.16 (after distribution) to $8.49. If there were evil people doing evil deeds, would they raise the value of the stock. I think not.

I would say that OPL is doing better. They raised the price of the stock and state, in their second quarter '03 report, that they will probably make another distribution within six months. Looks good to me.

You All have a great day.......