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<blockquote data-quote="brownIEman" data-source="post: 3006350" data-attributes="member: 14596">Yes, the volume growth is mainly based in residential growth.&nbsp; But where do you think that those growing residential packages are coming from?&nbsp; Do you think it is from other residential customers shipping to each other?&nbsp; No, it is due to the sea change in how retail is done in our society, from the brick and mortar business model to online retail.&nbsp; The package volume comes from mostly businesses to their end consumers.&nbsp; Gumby claimed that we are losing those businesses because of poor service on the pickup side due to too much work on too few routes.We are not losing customers en-masse as he implies due to poor service.&nbsp; Ask any of the sales folks, you will find that when we loose a business customer 9 times out of 10 it is because of the cost of our service.&nbsp; UPS cost is driven mostly by the higher cost of UPS&#039; employees.&nbsp; If a lot of the posters on this site get their way, that cost disparity will continue to rise sharply with this next contract.&nbsp; UPS has only one way to remain profitable.&nbsp; As the cost of each employee rises more quickly than the competitions&#039;, UPS must get more production out of each employee.Yes, as you might surmise, this problem is potentially exacerbated by the fact that most of the volume growth is in lower profit/piece residential volume, although the competition is facing that same issue and as UPS typically has greater stop densities (other than the post office)&nbsp; it may actually be more of a challenge for them than for UPS.</blockquote>

[QUOTE="brownIEman, post: 3006350, member: 14596"] Yes, the volume growth is mainly based in residential growth. But where do you think that those growing residential packages are coming from? Do you think it is from other residential customers shipping to each other? No, it is due to the sea change in how retail is done in our society, from the brick and mortar business model to online retail. The package volume comes from mostly businesses to their end consumers. Gumby claimed that we are losing those businesses because of poor service on the pickup side due to too much work on too few routes. We are not losing customers en-masse as he implies due to poor service. Ask any of the sales folks, you will find that when we loose a business customer 9 times out of 10 it is because of the cost of our service. UPS cost is driven mostly by the higher cost of UPS' employees. If a lot of the posters on this site get their way, that cost disparity will continue to rise sharply with this next contract. UPS has only one way to remain profitable. As the cost of each employee rises more quickly than the competitions', UPS must get more production out of each employee. Yes, as you might surmise, this problem is potentially exacerbated by the fact that most of the volume growth is in lower profit/piece residential volume, although the competition is facing that same issue and as UPS typically has greater stop densities (other than the post office) it may actually be more of a challenge for them than for UPS. [/QUOTE]

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