Peak 2013 Begins !!

[TBH]

Sleeve-meet-heart, I do agree with your comment about outgrown facilities. Ours was probably outgrown 20 years ago. However, this is also an avoidable situation. A few years back, even here in the bay area, at the bottom of the real estate market there were deals to be had on land and even empty commercial buildings. They could have had their pick. Again, its lack of planning. I believe I have heard UPS claim they want to "grow the business" This does not seem the right way to go about it. I believe I have seen somewhere on this web site, you can't grow a business by shrinking it. Who in their right mind thinks this would work? Lets here it for one big from Atlanta, again! Seriously, you people at the top need to figure this out and fast(think you would have done that last year or the year before.) As far as I know, Christmas comes at the some time every year and ciber Monday is always the one after the Thanksgiving weekend. Please fes up to your mistakes(I know this can be very hard) and fix these problems! Dump the WOR, this company's worst enemy and lets handle this!

 

[Alexcross774]

We probably got 1 or 2 53' trailers a week when Pdale was opened in 1985.
Drop shipments.

Probably 90% of what we saw last week was 53'. There was about 70 dollies in the yard they weren't using.

 

[Catatonic]

UPS is in the business to make money.
Building facilities and purchasing package cars to be used in a 2 to 3 week period annually may not be the optimal decision.
Yeah, peak comes every year and every year UPS makes a lot of money during peak season doing what they are doing and capacity investment costs money that is not making money 11 months out of 12.
It may be frustrating to you and most operations employees but UPS makes a higher percent of their revenue and profits in December than any other month.
I remember when we use to add drivers, run spurs outside and in sort aisles and every December, UPS would lose money or maybe break even. UPS then started using helpers a lot more and started making profits during peak.
At some point, when UPS starts to lose money in December or lose market share because of poor service during peak season, UPS will adapt.
Try reading the FedEx forum and see how screwed up FedEx is from the employee perspective.
Employees that leave FedEx and come to UPS say UPS is better but not the other way around.

Oh well, something to think about but also totally understandable if everyone bitches and complains.

 

[Alexcross774]

@Hoaxster . I agree with you that we need to make money. I think the change in trailer size is due to customer demands. This is my 2nd Peak, but from what I hear from people I work with that have been around 20yrs, this one is bad. What I don't understand is making a change(ex. using bigger trailers), but not having a plan for how to deal with the effects of the change. And while this economy is still struggling, use common sense. If Amazon(publicly traded) projects their volume, they will be on the low side. That is what they must do to Beat their own projections. One should assume they will be a lot higher than their projection and plan accordingly... It doesn't affect me directly, but I do watch all the operations people running around, and it makes me wonder...

 

[Bubblehead]

UPS is in the business to make money.
Building facilities and purchasing package cars to be used in a 2 to 3 week period annually may not be the optimal decision.
Yeah, peak comes every year and every year UPS makes a lot of money during peak season doing what they are doing and capacity investment costs money that is not making money 11 months out of 12.
It may be frustrating to you and most operations employees but UPS makes a higher percent of their revenue and profits in December than any other month.
I remember when we use to add drivers, run spurs outside and in sort aisles and every December, UPS would lose money or maybe break even. UPS then started using helpers a lot more and started making profits during peak.
At some point, when UPS starts to lose money in December or lose market share because of poor service during peak season, UPS will adapt.
Try reading the FedEx forum and see how screwed up FedEx is from the employee perspective.
Employees that leave FedEx and come to UPS say UPS is better but not the other way around.

Oh well, something to think about but also totally understandable if everyone bitches and complains.

First off, we aren't talking about a 1 month out of 12 anomaly.
Peak starts in early November and lasts well into January, with many peaks and valleys in between.
Secondly, we are selling a service here, one that carries with it a reputation that is supposed to separate us from lower priced competition.
These failures during peak leave a lasting impression on customers who will be more and more involved year round as internet commerce continues to expand.
Our building, a hub, was built in 1986 and was exposed as undersized within 5 years of it opening.
At what point will this company realize that they we will be better off concentrating on maintaining and expanding its infrastructure and staffing for the future, rather than contracting and outsourcing volume in hopes of maximizing short term margins?

 

[Catatonic]

1) First off, we aren't talking about a 1 month out of 12 anomaly.
Peak starts in early November and lasts well into January, with many peaks and valleys in between.
2) Secondly, we are selling a service here, one that carries with it a reputation that is supposed to separate us from lower priced competition.
3) These failures during peak leave a lasting impression on (Consignee) customers who will be more and more involved year round as internet commerce continues to expand.
4) Our building, a hub, was built in 1986 and was exposed as undersized within 5 years of it opening.
5) At what point will this company realize that they we will be better off concentrating on maintaining and expanding its infrastructure and staffing for the future, rather than contracting and outsourcing volume in hopes of maximizing short term margins?

1) Buildings are usually over capacity for a 1 month period.
2) The shippers always negotiate on price ... service levels are secondary in concern if at all included in negotiations or contracts.
3) Service failures while regrettable are of no real concern to the customers that pay for the service ... they understand that carriers' capital investments in infrastructure to handle peak volumes will drive up their costs and that is their major concern.
4) You were lucky, facilities are usually 100% utilized when opened (especially since new facilities are opened in October or November).
5) Long-term projections is for UPS ground volume to decrease therefore:
Maintaining = yes ... Expanding = no

Hoax POV) The business landscape is littered with companies (or their remains) that overbuilt capacity.
The capital and operational costs to add a new building is extremely expensive for UPS.
Adding drivers (staffing) is what drives adding buildings.
I understand your frustrations from your viewpoint but it simply is not going to happen except for isolated areas where new growth is occurring.

 

[BURMDPsupe]

Secondly, we are selling a service here, one that carries with it a reputation that is supposed to separate us from lower priced competition.

This used to be the company mantra, but the "shareholders" don't care about service; they are interested in the bottom line.

M-

 

[fiddledee]

That's why they keep you around.

because he can fix a screwed up IE plan or because he is not the brightest guy around?

 

[fiddledee]

This used to be the company mantra, but the "shareholders" don't care about service; they are interested in the bottom line.

M-

stocks over 100 bucks , bottom line may be working eh?

 

[Johney]

Probably 90% of what we saw last week was 53'. There was about 70 dollies in the yard they weren't using.

I would think that in time they will phase out pups. Think about it, it takes far more time for a driver to build a set than say hook up to a long box and go. Pups get filled faster so shifters are constantly moving them off doors to add another. Drivers(I believe)get paid more for doubles. Granted some buildings can't handle 53's.

 

[UpstateNYUPSer(Ret)]

I would think that in time they will phase out pups. Think about it, it takes far more time for a driver to build a set than say hook up to a long box and go. Pups get filled faster so shifters are constantly moving them off doors to add another. Drivers(I believe)get paid more for doubles. Granted some buildings can't handle 53's.

Are there any states that limit the length of a set of doubles? I know (or have been told that) triples are only legal west of the Mississippi. You are right in that it would make more sense to just use 53'ers.

 

[oldngray]

Last I heard triples are legal in Ohio, but only on the Ohio Turnpike in good weather.

 

[jumpman23]

Take some of the money these IT tech nerdballs come up with that waste money such as Orion and put it into facilities that need it. Bottom line this company wastes so much money on sh t that just doesnt work. Throwing money away on stuff that just doesnt work doesnt seem too intelligent to me.

 

[beentheredonethat]

UPS is in the business to make money.
Building facilities and purchasing package cars to be used in a 2 to 3 week period annually may not be the optimal decision.
Yeah, peak comes every year and every year UPS makes a lot of money during peak season doing what they are doing and capacity investment costs money that is not making money 11 months out of 12.
It may be frustrating to you and most operations employees but UPS makes a higher percent of their revenue and profits in December than any other month.

At some point, when UPS starts to lose money in December or lose market share because of poor service during peak season, UPS will adapt.
Try reading the FedEx forum and see how screwed up FedEx is from the employee perspective.
Employees that leave FedEx and come to UPS say UPS is better but not the other way around.

Oh well, something to think about but also totally understandable if everyone bitches and complains.

Hoax,

1. We've been losing market share for years now, (decades) to FDX ground and Smartpost and now there are a lot of smaller companies like Velocity express.
2. Of course we make more revenue in December, we have more volume then.
3. We go overboard on many things. Back a few decades ago when there really wasn't competition to speak of, it made sense not to build until necessary. Now we leave ourselves vulnerable to customers not seeing us as the better service.
4. I get we can be MORE profitable by being lean and mean. However, when you impact service (1.5 MIllion pkg backlog in Dallas TX area alone, hundreds and hundreds of trailers not processed in the west etc, it will impact shippers decision of who to stay with the rest of the year.
5. Our saving grace has been that FDX and USPS is screwed up too. What if they get a lot better during peak. (FDX is my bigger fear since they have been building like crazy). But the USPS has the density of stops and they should kick our ass. It's their inefficient hub network and bad mgmt team as well as govt unions (postal workers) that cause their problems. (My dad was a mailman decades ago for 35 years). He told me tons of stories about how bad the mail system was set up. I didn't fully understand it at the time, but after working on UPS it amazed me the stories he told of how inefficient they were.

 

[Catatonic]

Hoax,

1. We've been losing market share for years now, (decades) to FDX ground and Smartpost and now there are a lot of smaller companies like Velocity express.
Yep
2. Of course we make more revenue in December, we have more volume then.
"Making more money" was referring to profit ... I guess I should have said profit.
3. We go overboard on many things. Back a few decades ago when there really wasn't competition to speak of, it made sense not to build until necessary. Now we leave ourselves vulnerable to customers not seeing us as the better service.
Could be.
4. I get we can be MORE profitable by being lean and mean. However, when you impact service (1.5 MIllion pkg backlog in Dallas TX area alone, hundreds and hundreds of trailers not processed in the west etc, it will impact shippers decision of who to stay with the rest of the year.
See 5. - It's a cost containment game due the savvy and "greed" of large shippers.
5. Our saving grace has been that FDX and USPS is screwed up too.
That is our saving grace, no doubt.
What if they get a lot better during peak. (FDX is my bigger fear since they have been building like crazy). But the USPS has the density of stops and they should kick our ass. It's their inefficient hub network and bad mgmt team as well as govt unions (postal workers) that cause their problems. (My dad was a mailman decades ago for 35 years). He told me tons of stories about how bad the mail system was set up. I didn't fully understand it at the time, but after working on UPS it amazed me the stories he told of how inefficient they were.

See my thoughts above.
I can't say you are wrong on any of the above but then again, I can't say you are right.
I guess I agree with you since I sold just about all my UPS stock.

You forgot to mention UPS's biggest problem and that is the cost of teamster labor.
That is a much bigger problem that service levels.
I personally thought UPS service levels always sucked.

 

[TBH]

Hoaxster:


Did not write back last night, I was too tired. Must say I agree with beentheredonethat. Just a couple quick points to add to what I have already said. Case in point, just today in a res. del. area, my customer was asking me where his 80 pound rug he had ordered was. Was in my ed but not on my truck. he told me the last 2 days our web site indicated it was out for delivery and never arrived. Sound familiar? How many times is this being duplicated across the country today? i know we all had service failures again in my center. Despite the high cost of teamster labor as you stated (I have no idea what the on car supervisor total compensation package is.) lousy service on a day after day basis will be our fatal undoing if not addressed in a reasonable amount of time. You stated the system is set up to fail during peak as it is too expensive to expand for other times of the year, and that UPS would adjust when customers tire of the way they are being treated and start to leave or share prices start to be affected in a negative way. Since when is UPS quick to adjust to anything? As I have said before, reminds me of the Titanic being too slow to avoid the collision with the iceberg. Isn't it always better and far more cost effective to retain customers and strive to attract new ones, rather than having to try to get ones back that have already left after having been jerked around 1 too many times by big brown? They have other things to do like running their businesses so they too can make their bottom lines. Just think the direction we are going is dangerous and if we wait too long to turn back, it may be at some point, too late...

 

[oldngray]

I ordered some stuff yesterday and in the customer comments section they were complaining about UPS because deliveries were taking so much longer with surepost. They don't understand surepost is a way to cut costs and not all parts of the delivery procedure are under UPS control but still blame them for lousy service. But there are many other cost cutting measures UPS has made that ARE their own fault in the interest of short term profits but will destroy the future of the company if it continues.

 

[Bubblehead]

1) Buildings are usually over capacity for a 1 month period.
2) The shippers always negotiate on price ... service levels are secondary in concern if at all included in negotiations or contracts.
3) Service failures while regrettable are of no real concern to the customers that pay for the service ... they understand that carriers' capital investments in infrastructure to handle peak volumes will drive up their costs and that is their major concern.
4) You were lucky, facilities are usually 100% utilized when opened (especially since new facilities are opened in October or November).
5) Long-term projections is for UPS ground volume to decrease therefore:
Maintaining = yes ... Expanding = no

Hoax POV) The business landscape is littered with companies (or their remains) that overbuilt capacity.
The capital and operational costs to add a new building is extremely expensive for UPS.
Adding drivers (staffing) is what drives adding buildings.
I understand your frustrations from your viewpoint but it simply is not going to happen except for isolated areas where new growth is occurring.

Look, we can exchange impressive facts and figures.
We can each site relevant and parallel analogies and examples to further our positions.
But in the end, I don't think anybody can deny that this company is riding everything to the razors edge, cutting to the bone in most aspects of the business and it hasn't always been this way.
As ludicrous as it sounds, I consider transportation to be an emerging market.
E-commerce will continue to grow and the now less desirable home deliver market will become exponentially more profitable in the form of multiple packages per delivery.
Whoever positions themselves the best will dominate the landscape.
Right now it is pretty much a two horse race.
Hopefully UPS takes off the blinders before they lose their advantage.

 

[Catatonic]

I don't disagree with what people are posting here from an emotional what do I desire POV.
My posts here do not represent the way I think things should be or how I would want them to be ... but rather to offer a rational, business approach that helps explain why things are "the way they are".

I relate to your frustrations and concerns because the same driving forces (strong competition and that future doomsday financial realities) affected me and other parts of the company you never get a chance to see. There is no one below Level 20 that has not felt the stress and additional workload caused by UPS's reaction to those driving forces.
And the Level 20's have felt it as well and really even more but their compensation has been increased in the false (???) belief that they will feel a strong commitment to UPS and work 24/7 to do what is "best for UPS" (as defined by the Board and Management Committee).

 

[Alexcross774]

I don't have near the experience that most of you do with UPS. I feel that sometimes that gives me an advantage because I don't know "how good it used to be." The reality is that even though the last 2 weeks have been a cluster@#$, no one else could have done it better. Maybe we could have done it better, but no one else has the capacity to handle this volume. While we will fail some end of the line customers,(not making commitment times ect), overall we are servicing the larger companies that are using us. And from what I have seen UPS is focused on B2B growth. That is where the profit is.