UPS switching some routes from rail to road

Trains Magazine General Discussion
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By GREGORY RICHARDS, The Virginian-Pilot © March 22, 2006

Package delivery giant UPS will move fewer parcels via railroads as it embarks on a plan to reduce ground delivery times.

What’s being taken from the trains is going to trucks, which offer UPS faster transit speeds on certain routes, company spokesman Norman Black said.

The switch should have little effect on the nation’s biggest railroads, including Norfolk-based Norfolk Southern Railway Co., as they are straining to carry record levels of cargo. In some cases, crowded tracks have delayed shipments, disappointing customers.

UPS moves about 15 million packages daily and about half a million of those will see faster transit times as a result of the changes, Black said. However, he would not say how many packages will migrate from rails to roads.

Even with the switch, Atlanta-based UPS remains one of the largest users of railroads, Black said. It spent $750 million on rail services in 2005, mostly for trips of more than 750 miles.

“We still do an awful lot of business with the railroads, and we still use their networks where we can,” he said.

Under the plan, announced this month, packages moving via ground service among 11 major U.S. cities - a list that includes Washington but not Norfolk - will have at least a day cut off their transit times, according to UPS. The company has spent the past three months gearing up for the new system, including hiring additional truck drivers.

The move to trucks is one of a variety of strategies being implemented to reduce package transit times, Black said. Others include increased use of technology and reconfiguring distribution hubs.

Larry Kaufman, a columnist with transportation industry publication Journal of Commerce, said he sees UPS’ switch having minimal effect on the railroads.
“Obviously, any loads you lose is revenue off the top and you don’t want to lose it,” said Kaufman, a former railroa

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Seems quite reasonable since Fed Ex with the 2 team ground trucks has been taking a big slug of biz away from UPS [:)]

[quote]
QUOTE: Originally posted by zardoz

By GREGORY RICHARDS, The Virginian-Pilot © March 22, 2006

Package delivery giant UPS will move fewer parcels via railroads as it embarks on a plan to reduce ground delivery times.

What’s being taken from the trains is going to trucks, which offer UPS faster transit speeds on certain routes, company spokesman Norman Black said.

The switch should have little effect on the nation’s biggest railroads, including Norfolk-based Norfolk Southern Railway Co., as they are straining to carry record levels of cargo. In some cases, crowded tracks have delayed shipments, disappointing customers.

UPS moves about 15 million packages daily and about half a million of those will see faster transit times as a result of the changes, Black said. However, he would not say how many packages will migrate from rails to roads.

Even with the switch, Atlanta-based UPS remains one of the largest users of railroads, Black said. It spent $750 million on rail services in 2005, mostly for trips of more than 750 miles.

“We still do an awful lot of business with the railroads, and we still use their networks where we can,” he said.

Under the plan, announced this month, packages moving via ground service among 11 major U.S. cities - a list that includes Washington but not Norfolk - will have at least a day cut off their transit times, according to UPS. The company has spent the past three months gearing up for the new system, including hiring additional truck drivers.

The move to trucks is one of a variety of strategies being implemented to reduce package transit times, Black said. Others include increased use of technology and reconfiguring distribution hubs.

Larry Kaufman, a columnist with transportation industry publication Journal

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Was in LaX, Wi last week. Saw a TOFC train on BNSF with both UPS trailers and FEDEX pups on it. First time I’ve seen FEDEX on rail.

Wouldn’t UPS business be “good” business to have? (aside from the super fast schedule that UP went for).

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All that, when all they had to admit was the fact that Dale is finally driving “The Truck” [swg]

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UPS is “great” business to have. But a railroad is never going to deliver dock to dock as fast as a two person team going over the road. FedEx turned the competitive heat up and UPS had to respond.

UPS is headed for the big hurt. They’re organized by the Teamsters. FedEx has no union. As non-union FedEx grows we can kiss our UPS good-by.

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I know the purpose was “cost savings” but the decision for railroads back in the 70s and 80s to “Single Track” most mainlines and consolidate or shutdown many yards seems to be biting the Class 1s in the rumble seat today.

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UPS has gone to 2 man teams between NYC and the west coast for years what you are seeing is them expanding that service. If I could still do it I would have signed up in a heartbeat fot those runs.

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As someone who has worked closely with the shipping dept of the business I work for, I can tell you I will take UPS over FedEx any day of the week, unless it’s an international shipment. (less paperwork for me) With UPS I have the same driver, or, if he’s out, one of 2 or 3 floaters that will come in when he’s not making the route. With Fedex, I have different people picking up, delivering, etc, plus Fedex isn’t even one company. Ground, Air, Express and freight all fall under different umbrellas, and the lack of accountability really shows when a problem arises and it wastes my time to try and fix a problem they caused. (like losing a package) Not to mention the Fedex guys are always way stressed, in a hurry and just not as friendly at the end of the day. That speaks volumes for me about how FedEx seems to be run…IMO.

I hope UPS stays on top, I’ll pay the 5cents extra a package to get better customer service. [:)]

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redrabbit:
Interesting how it has changed. When I left my shipping manager’s job almost six years ago, FedEx did not seem so complicated. I had the same basic impression of FedEx for international shipping, but I also thought FedEx was more gentle with the packges than UPS was. And we usually had the same FedEx (as well as he same UPS) driver call on our company every day. Apparently since they merged with American Freightways they have had some operational issues.

tomtrain:
the above mentioned merger might be why you saw a fedex trailer on the train. The fedex and American Freightways trailers have become mixed (Fedex “ground” is their term for the freight that used to ship with American Freightways).

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Based on orders we have recieved from both, UPS seems to be doing better than FedEx. We’re currently working on a 2600 unit order for UPS (all 28-foot straight frame), and that is just replacement units, haven’t heard of what the new item order is yet, they were supposed to sign the contract two weeks ago, supposedly is a ‘significant’ order.

FedEx has about 1100 units on order, 700 are 28-foot drop frame and the balance are 28-foot straight frame. The “pup” line at work should be busy for the next six months or so.

BTW, all of these trailers we build are intermodal-ready, so they all can ride the rails.

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Well it sounds like you will be busy for a long, long time if those orders you mentioned are consummated. [:)]

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That qualifies for the dumbest quote of the month. Back up this stupid thought with some fact for me…

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(Last sentence) Sounds like they’re making the smart move and keeping their options open.

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UPS is headed for the big hurt. They’re organized by the Teamsters. FedEx has no union. As non-union FedEx grows we can kiss our UPS good-by.
[/quote]

That qualifies for the dumbest quote of the month. Back up this stupid thought with some fact for me…
[/quote]
Actually, speaking from the sidelines, the last strike at UPS set up a “two tiered” hire system. The new hires still are Teamsters, just with a different package. So any thoughts about the bad ole’ Teamsters being the “problem” really aren’t so.

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Actually it’s not quite as bad as my first post maybe makes it out to be…we do have the same FedEx ground guy about 75% of the time, but it still never seems to be as smooth of a process as UPS. My UPS driver shows up between 10:30am and 12:30pm everyday like clockwork. Fedex seems to have a "between 9am and 5pm " kinda schedule. They get to us when they get to us. Granted, we are a smaller company in a sea of large distribution centers. (our building is less than 1/4 mile from the NEC main lines, right outside of aberdeen / across the tracks from the Mid-Atlantic Rite AId distribution center) Our UPS driver also picks up packages between 3 and 4 everyday, and will even come back later if need be…We’ve even got his cell phone number for those all-important last minute overnight orders! [:D]

I think perhaps since the FedEx drivers are “independent contractors” there is more of a hit-or-miss quality to their service, or perhaps more turn-over. I know I’d be upset if I had to fill my truck with gas everyday at these prices…[xx(] On a side note, the DHL guys seem pretty cool…very friendly, but we only get a few packages a month through them, if any.

-Nate

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Just a part to the UPS yearly sabre rattleing.

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Dude! Don’t shoot the messenger.

Here are some facts: 1) Consolidated Freightways, 2) Carolina,3) A.P.A., East Texas Motor Freight, System 99, the "merger’ of Roadway and Yellow with subsequent terminal closings… You don’t have to be a weatherman to know which way the wind blows.

The freight these union carriers moved hasn’t stopped moving. It’s gone over to largely non-union regional ltl carriers that link themselves together to form a national network or to non-union truckload operations that handle it with stop offs.

UPS and its unionized work force have been protected because they occupied a specialized niche, smaller shipments. FedEx is breaking down that protection. UPS isn’t going away soon, because of its size. But it’s playing defense - reacting to FedEx initiatives.

Unless something changes UPS will eventually join CF in the graveyard - or alter itself drastically to eliminate the cost disadvantage it has vis a vis non-union FedEX.

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You are obviousely a non-union individual…you have such a great insight into the woes of unions…this brings me to one question…Have you ever belonged to a union? You still failed to convince me of anything but your dislike for the unions. Are you jelous of their pay and benefeits? Are you suggesting that Rail employees would be better off without unions? Do you like the standard 40 hour work week? Do you like having rest days off? Holiday pay? These were all brought to you by unions.

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Well, I felt greyhounds stated a good case. Only time will tell whether or not it’s true.

There are some areas that won’t be able to be touched: railroads for the most part and a lot of other labor unions especially in union friendly states(IL for example). Other areas the unions will have to either find a way to buck the trend or compete.

And before you jump all over my***, I am not non-union.

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No, I’m not in a union and I never have been in a union.

I was once told I was going to join the Teamsters, something I didn’t appreciate. The shop steward on the loading dock didn’t ask me to join, he told me I was going to join. Back then, I was young enough, and inexperienced enough, to buck a Teamster Steward on a Chicago loading dock.

But the fact that I didn’t (and don’t) want to belong to a union has no bearing on wether someone else could/should/would want to join a union, and freely select the union as their barganing reprsentative. It’s a free country and that’s part of the freedom.

All I’m saying is that if the Teamsters think they can organize UPS and not organize its compitition, they’ll loose those Teamster jobs over time. And they will.

Go organize FedEx. That’s what a union is supposed to do, organize the workers to gain those workers an economic advantage. I’m not against that.

If a union tries to require 16 man days to move a train from Chicago to Memphis, I’ll object. But if they’re going for decent wages, fair treatment, good benifits, and a good retirement - they’re doing their job. I’ve got no problem with that.

So go organize FedEx. And quit having a non-existant argument with me.