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What is the biggest and best lie Management has told you?
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<blockquote data-quote="beentheredonethat" data-source="post: 973440" data-attributes="member: 4886"><p>There are many areas where UPS does not make a profit. We have some areas where drivers have to take a ferry trip to an island to deliver a handful of packages. We have centers where most drivers deliver only 100 packages in a day and drive over 300 miles because the area is so remote. Those areas have virtually no pickups as well. Those areas cost UPS money. However, it is the price you pay to indicate you have complete US geographic coverage. </p><p>It's similar in theory to the loss leaders at a supermarket, when an item is on sale it often loses money for the grocer. However, they make it up by getting you in the store and selling you other items that they make money on. </p><p></p><p>Think of it, UPS has a profit margin of 12%, so if a customer ships a $10 pkg to a persons home, UPS makes roughly $1.20 on that package. How much does it cost UPS to have a driver DR a package to a house?</p><p></p><p>If you assume a SPORH of 20, and an hourly rate of $40 (note: not exact numbers, but if you include fuel costs, mileage on vehicle, drivers hourly rate, costs of HW&P insurance etc). Then the cost to UPS is $2 for that stop. Even if you think the number is wrong, and we increase the assumed SPORH to 25 and a pay rate of $30.5 Then that cost to UPS is $1.20. If we make $1.20 on the package (that's including the first stop cost). On the second attempt we are at breakeven, and at the third attempt we lost money on that one pkg. </p><p></p><p>Note: I know the SPORH and Rate aren't exact. But under the second scenario, I think they are extremely conservative (esp when you include OT and\or HW&P costs). I just used those to have a reasonably accurate number and make the math easy.</p></blockquote><p></p>
[QUOTE="beentheredonethat, post: 973440, member: 4886"] There are many areas where UPS does not make a profit. We have some areas where drivers have to take a ferry trip to an island to deliver a handful of packages. We have centers where most drivers deliver only 100 packages in a day and drive over 300 miles because the area is so remote. Those areas have virtually no pickups as well. Those areas cost UPS money. However, it is the price you pay to indicate you have complete US geographic coverage. It's similar in theory to the loss leaders at a supermarket, when an item is on sale it often loses money for the grocer. However, they make it up by getting you in the store and selling you other items that they make money on. Think of it, UPS has a profit margin of 12%, so if a customer ships a $10 pkg to a persons home, UPS makes roughly $1.20 on that package. How much does it cost UPS to have a driver DR a package to a house? If you assume a SPORH of 20, and an hourly rate of $40 (note: not exact numbers, but if you include fuel costs, mileage on vehicle, drivers hourly rate, costs of HW&P insurance etc). Then the cost to UPS is $2 for that stop. Even if you think the number is wrong, and we increase the assumed SPORH to 25 and a pay rate of $30.5 Then that cost to UPS is $1.20. If we make $1.20 on the package (that's including the first stop cost). On the second attempt we are at breakeven, and at the third attempt we lost money on that one pkg. Note: I know the SPORH and Rate aren't exact. But under the second scenario, I think they are extremely conservative (esp when you include OT and\or HW&P costs). I just used those to have a reasonably accurate number and make the math easy. [/QUOTE]
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