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Strategies & Market Trends : UPS Strike
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To: Richard Vaughn who wrote (13)8/11/1997 11:50:00 PM
From: JJ   of 62
 
To All:

To put things in perspective: UPS is by far the largest motor carrier in the nation (revenues of over $22 billion). If you take the next 5 largest carriers and then throw in FedEx(even though FedEx is not classified as a motor carrier), they still don't equal UPS. (not really counting the USPS since they are not price competitive with UPS over about 5 pounds) No one has the capacity to handle all of the customers that want to take their business elsewhere. It would take at least 3 years just to put the additional capacity in place (sorting hubs, terminals)for another company to even start trying.

Someone asked a few posts back what retailers were being hurt most by the strike. J.C. Penney is UPS' largest customer. But I think they have some of the best contingency plans in place. Gateway 2000 is another one that relies heavily on UPS. You should start seeing how good Gateway's contingency plans are this week. Could be critical. Dell, on the other hand is more diversified. Wal Mart is another big customer for UPS but they have been giving RPS more and more business and I am sure RPS is obliging.

While the shippers' outbound shipments have been getting all of the attention, a harder issue to call is how all of the inbound shipments are getting to manufacturers who are heavily dependent on just in time inventories. I believe this is where you will see people start to cry uncle.

--JJ
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