Crucial UPS Info (for an Interview)

[Big Beer Belly]

If anyone has a UPS interview in their future and quickly wants to get up to speed on their business I highly recommend you read the chapter (10 pages) about UPS in the book "THE WORLD IS FLAT" by Thomas L. Friedman. It's on the NY Times Bestseller list, but I picked up a copy at my local library.

In a few minutes you'll understand the huge potential market that UPS and its competitors have yet to tap compared to the very limited market the passenger airlines have already tapped. I'd even go so far as to say its a must-read for those pilots trying to decide between pax and cargo and the merits/future of the two business models.

BBB

 

[1800 RVR]

For a second there, BBB, I thought you were reinterviewing!

 

[Big Beer Belly]

For a second there, BBB, I thought you were reinterviewing!

YIKES! Bite your tongue!


Did open my eyes reading the part where on any given day UPS moves 2% of the WORLD'S GDP!

With logistics (think I read somewhere UPS estimates it's a $TRILLION yearly business) UPS and others have figured out a way to get paid multiple times for "moving" a package:

1. Take customer's order (phone/internet).
2. Bill customer.
3. Advance accounts receivable to producer via UPS's financial arm.
4. Pull product from shelf, inform producer to produce a replacement OR repair that broken product (laptop, cell phone, etc...) using UPS employees.
5. Finally, transport that product from warehouse to business/residence.


To me, this business model has nearly unlimited potential. Contrast this with the passenger airline model and what I view as a low margin/high cost, limited business model. As a pilot seeking employment, which model has the greater potential to provide a stable, growing opportunity for you and your family? If I were looking for a pilot job this is certainly one question I'd be considering.

BBB

 

[TheGuat]

Just wait till a LCC cargo outfit starts up.

 

[Boris Badenov]

I think that would be one of the arguments for cargo, actually, Mr. Resident Troll. As the logistics market opens up, you can't just buy a network of vans, trucks, loading facilities, sorting facilities, trained employees, containers, or more than anything the system behind it all. There is no "turnkey solution" like buying a bunch of empty gates and 30 Airbusses.

UPS also has the advantage (from the pilot's perspective) of having historically strong labor groups with (relatively) decent relations with the company. I used to work for them. In 97 the IPA walked out with the Teamsters, and the Teamsters got just about everything they wanted. This is the way that unions are supposed to work, and it seems to me that cargo offers a much more fertile ground for the future both economically and politically.

 

[AC560]

I think that would be one of the arguments for cargo, actually, Mr. Resident Troll. As the logistics market opens up, you can't just buy a network of vans, trucks, loading facilities, sorting facilities, trained employees, containers, or more than anything the system behind it all. There is no "turnkey solution" like buying a bunch of empty gates and 30 Airbusses.

Actually this is how UPS Supply Chain came into being. UPS bought several companies (Fritz Companies / Menlo mainly) and bang they were in the logistics business. Most of the business they do on the logistics side doesn't involve UPS aircraft or equipment and is instead sourced out to third party vendors. FedEx has the Tower Group and the portions of Fritz Companies that had previously handled their Customs brokerage.

Don't say any of this to imply UPS sucks or people shouldn't work there (and by the way the book is very good) just wanted to correct your statement.

 

[Big Beer Belly]

Most of the business they do on the logistics side doesn't involve UPS aircraft or equipment and is instead sourced out to third party vendors.

I have no access to "the numbers", but I do recall that Menlo used approximately 30 contracted aircraft to move their air freight each night prior to being purchased. That freight is now being flown by UPS jets utilizing spare capacity plus aircraft being returned to service from storage. Last I recall reading UPS said they needed approximately 13 additional jets to fully absorb the Menlo freight. Also, there is some scope protection for this flying for the IPA pilots, but admit I am not real up on it like I should be. Finally, UPS has spent several $hundred million in constructing air freight facilities at each of its major hubs in order to continue utilizing its existing fleet of aircraft to move air freight.

A core reason for entering the logistics and freight (air and ground) business is to be able to offer a complete spectrum of capabilities for the customer. A one-stop solution for all your warehousing and shipping needs. An important by-product of this one-stop philosophy is gaining/growing their small package (highest margin) core business from new customers that previously might have chosen a competitor because of their wider service offerings. (I sound like a freakin' salesman!) uke: Bottom line ... the logistics biz should spin off more small package air biz which equates to more pilots and more job security. That's what I really care about!

BBB

 

[727C47]

Just wait till a LCC cargo outfit starts up.

Except for Fed EX,DHL/ABX,UPS, every freightdog outfit out there is an LCC ! The big boys prove you can make astronomical money,and pay an awesome wage, at the same time,BravoZulu!,ladies and gents !

 

[kc10/c130]

My life just got better since I put TheGuat on my Ignore list. I just didn't know an individual could have his head so firmly up his... exactly.