How will the UPS purchase of Overnite trucking impact UPS rail shipments?

[dldance]

UPS is currently one of the major rail shippers. Seems that Overnite's long haul system might absorb some of the UPS rail use.

dd

[gabe]

dldance,

For all I know about such things, you are right. But, I could see the opposite. UPS uses trains for its smaller packages. With Overnight's specialty in larger packages and the fact that Overnight started as a rail spinoff, leave it primed for intermodal cooperation.

But, take that commet for what it is worth.

Gabe

[greyhounds]

It's got a real potential to hurt.

UPS will rail trailers for 400 miles, between Chicago and Minneapolis for example. This makes economic sense because UPS drivers are Teamsters, and that makes them more expensive than the competing FedEx drivers who have no union. FedEx has really started to take business away from UPS and "Brown" has to do something or die - and Overnite appears to be part of that "something".

Overnite is also non-union and this could shift the economics in favor of over the road movement.

So why don't you Teamsters get on the stick and organize FedEx and Overnite?

[dldance]

how much rail intermodal does Ocernite use?

dd

[MP173]

I do not see UPS attempting to integrate OVNT into their system.

This purchase is in response to Yellow's purchase of USF Freightways (Holland, Logistics, Dugan, Reddaway, etc.) Yellow has been quite aggressive lately, with the aforementioned USF and the purchase of Roadway.

Their market share for LTL will be quite large.

Package deliver is another type of trucking. It has to be completely separate from LTL. To attempt to merge the two systems into one will cause system delays, which UPS does not need at this time.

BTW, this is also in response to FEDX's movement into the LTL business with the purchase of American Freighways, and the subsequent rebranding into the Fedex family.

Trucking, as railroading is quickly consolidating into a few companies.

ed

[Junctionfan]

I don't really understand why UPS doesn't start using more container on chassis and stack the loads on to those 56 foot well cars (4 28 footers) and other container configurations. It also might be better if UPS builds a siding in a facility with the room for a UPS unit train to head to so UPS can unload themselve thus reducing the railroad's intermodal facility conjestion and also UPS driver originate and terminate at their own yard and customer instead of three places (UPS yard, intermodal facility, customer).

[fuzzybroken]

QUOTE: Originally posted by greyhounds

So why don't you Teamsters get on the stick and organize FedEx and Overnite?

News from a UPS Teamster (who didn't know about the Overnite purchase, incidentally):

The Teamsters have (had?) been trying to organize at Overnite, with limited success, due to anti-union management and also quite a bit of anti-union employees.

The Teamsters are also working on organizing at FedEx, but this is a difficult prospect as a result of the way that FedEx's predecessors were set up. RPS, aka FedEx Ground, uses a system of "independent contractors", not "employees", as drivers. The Express part of the business is separate from Ground, unlike UPS where the same union drivers handle both Air and Ground packages.

The Teamsters are also working on organizing the former Airborne Express, now DHL, which uses a system of subcontractors. (DHL, shortly after the merger, fired all of its own driver employees!) This is quite a process, as here in Milwaukeeland alone, there are 3 or 4 different subcontractors working out of the same building! DHL seems to be the biggest worry of both FedEx and UPS right now.

[2c],
-Mark
http://www.geocities.com/fuzzybroken
http://www.fuzzyworld3.com

[SALfan]

QUOTE: Originally posted by Junctionfan

I don't really understand why UPS doesn't start using more container on chassis and stack the loads on to those 56 foot well cars (4 28 footers) and other container configurations. It also might be better if UPS builds a siding in a facility with the room for a UPS unit train to head to so UPS can unload themselve thus reducing the railroad's intermodal facility conjestion and also UPS driver originate and terminate at their own yard and customer instead of three places (UPS yard, intermodal facility, customer).

I don't understand why UPS doesn't use Roadrailers; they would seem easier, quicker and faster to take off the tracks than piggyback trailers. There would probably be balancing issues with directional traffic flows, but (at least in my ignorance) I don't see much difference in hauling empty Roadrailers and hauling empty trailers to balance equipment. Anyone with actual knowledge care to enlighten us?

[greyhounds]

QUOTE: Originally posted by MP173

I do not see UPS attempting to integrate OVNT into their system.

This purchase is in response to Yellow's purchase of USF Freightways (Holland, Logistics, Dugan, Reddaway, etc.) Yellow has been quite aggressive lately, with the aforementioned USF and the purchase of Roadway.

Their market share for LTL will be quite large.

Package deliver is another type of trucking. It has to be completely separate from LTL. To attempt to merge the two systems into one will cause system delays, which UPS does not need at this time.

BTW, this is also in response to FEDX's movement into the LTL business with the purchase of American Freighways, and the subsequent rebranding into the Fedex family.

Trucking, as railroading is quickly consolidating into a few companies.

ed

Well. FedEx certainly integrated American Freightways with their package system. There is no "wall" in shipment size. It isn't like "this is a package" and this is a "freight shipment" with a clear line of demarkation. I see UPS doing the same with Overnite.

And I don't think there is an overall consolidtation in trucking. Certainly not in the truckload segment. In the LTL segment there has been a proliferation of non-union regional carriers that link themselves into a national system using non-union owner operators.

[chad thomas]

I have a few comments here.

I worked for UPS for a year when I first started school (91') in the Van Nuys hub. We loaded 150 delivery trucks every morning from about 40 trailers. First of all the bigger trailers suck to load and unload. They are deeper and don't get the circulation from the dock nearly as well as the 28 footers. All the heat stored in the packages makes the trailers HOT. The shorter and taller 28' trailers allow for airflow from the loading dock to circulate much better.

Also the 28 footers have built in roller racks that extend all the way to the front of the trailer making loading and unloading much easier. The 40' trailers have these too but they stop 10-15' short of the front making the last 10 feet take longer in the hottest part of the trailer. The lease trailers don't have any roller racks making it nessasary to drag portable conveyors into the trailers and constantly deal with repositioning them as you progress. 45 footers are even worse as even with the extentions for the conveyor they are still 15' or more from the front. Fortunatly 45 footers were not that common, we would get mabee 1 a night. We did have 2 or 3 bays that had conveyors that extended into the trailers but we got way more trailers than they could handle.

Once the packages got on the dock they progressed through a huge maze of conveyor belts with sorters strategicaly placed at diverging points. This system of conveyors are not set up for larger packages. The heaviest ones took too much time for the sorters to manipulate and if enough of them hit a sort at once that belt (and mabee several more) would have to be stopped while they were sorted. The larger sized packages would get caught or stuck along the unmanned part of the distribution belts. When this happened it might take a few minuets for someone to notice. Then you have to locate the jam. This take a little time as most of these belts are 20-30' above the floor and are close together with structure and machinery blocking visibility and access. So someone might have to walk a belt 20' above the ground with another belt 5' above that requireing them to walk hunched over. All this time packages are piling up behind the jam. With the belt still moving all those packages are crushing th front of the jam more and more (this is where packages get damaged, not in the trucks or during loading/unloading). Then you may have to stop the belt and pull these jams apart. Then when the jam is delt with you have this surge of packages that overwhelm the the following sorters. Then more then half of the packages get tossed directly to the re-sort belt and go all the way back to the beginning of the sort which usually overwhelms the pre-sorters. It's a vicious cycle that can have an hour of ripple effect.

These are packages within the accepted limits of weight and size. The logical solution would be to go around the sort with the bigger stuff. Easier said then done. As I said these facilities are a maze of conveyers and multi-leveled walkways that don't facilitate moving larger packages.

My point here is UPS's infera structure would not be able to deal with larger packages at these facilities without major changes in there distribution, at least in the larger facilities.

[greyhounds]

QUOTE:

My point here is UPS's infera structure would not be able to deal with larger packages at these facilities without major changes in there distribution, at least in the larger facilities.

Maybe, but they didn't spend $1.25 Billion for no reason.

They're no longer a "package company", they're a "logistics company". And what the logistics softwear can do these days is amazing. Distribution systems can be reconfigured on an ongoing basis to produce maximum efficiency.

If UPS were to think that it can hang on to the same systems it had in 1991 and remain viable, it would be wrong.

[Junctionfan]

Does UPS use the dolly system for 2 28 foot trailers? I don't recall but my idea is that if they use 28 foot chassis and get the railroads to supply and/or purchase their own 56 foot well cars for 4 28 foot containers, they could likely consolidate UPS trains (maybe) thus reducing traffic constraints for UP which translates to UPS customer waits, plus if as I said UPS unloads their own equipment at their own facilities, they don't have to wait in line to pick up or drop of the containers/trailers at a general use intermodal facility.

To me anyways, that makes alot of sense if UPS is time sensitive as they say they are.

I read that as far as reliability goes, Canada Post is the best for time sensitive and UPS was one of the worst. Canada Post spends alot of money however making sure things gets to where they are supposed to go. Not entirely sure how the operation is set up as I only know what I hear watching the federal legislature and since all parties basically agree it's efficient, I assume it's true.

[dldance]

QUOTE: Originally posted by Junctionfan

Does UPS use the dolly system for 2 28 foot trailers? I don't recall but my idea is that if they use 28 foot chassis and get the railroads to supply and/or purchase their own 56 foot well cars for 4 28 foot containers, they could likely consolidate UPS trains (maybe) thus reducing traffic constraints for UP which translates to UPS customer waits, plus if as I said UPS unloads their own equipment at their own facilities, they don't have to wait in line to pick up or drop of the containers/trailers at a general use intermodal facility.

Yes - UPS uses the dolly system. Truck trains of 2 and 3 trailers are common.

dd

[Anonymous]

UPS bought Overnite to compete with FedEx Freight. Oh yeah, did you hear about the UPS/FedEx merger......?

[Junctionfan]

What is UPS' excuse for being listed as one of the worst parcel services as I stated above? What are they doing wrong?

[bobwilcox]

QUOTE: Originally posted by Junctionfan

What is UPS' excuse for being listed as one of the worst parcel services as I stated above? What are they doing wrong?

What is the source of your information?

Internal customer surveys by Class I railroads over many years rank UPS at the very top for customer satisfaction. Fortune's poll of investment bankers and CEO's consistantly rank UPS at the top level of large corporations. It has been my personal experience with with small package shipments that UPS does best, FEDEX second and the USPS trailing as some kind of bad joke.

[Junctionfan]

Some trucking magazine I found. Don't remember the name but it is supposed to have a good reputation.

[andrewjonathon]

UPS is without a doubt one the world's most successful corporations. It seems a little contradictory for them to also be the worst package delivery company. Somehow I doubt it. Canada Post, now that's a corporation I never heard anyone say anything good about. At least not until I read this thread.

[Anonymous]

FedEx will be hard to convert. I know 2 guys who are drivers for FedEX, and one guy who is a pilot, met them at the air mail facility, the drivers make more than me, and we won't even talk about the pilot. And, yes, I make a very decent wage...

[Anonymous]

UPS does well, but their on time ratings are not much better than the USPS. Wanna guess who delivers UPS parcels to out of the way locations??? Highway contract carriers for the USPS. Wanna guess howmost of the first class mail and express parcels get from point a to point b, FedEx planes. It's all interconnected....

[greyhounds]

QUOTE: Originally posted by dubyaM6

UPS bought Overnite to compete with FedEx Freight. Oh yeah, did you hear about the UPS/FedEx merger......?

No, is it the same as the one about the Minister, the Priest, the Rabbi and a duck?

[Junctionfan]

I believe the magazine was called Today's Trucking.

[gabe]

QUOTE: Originally posted by greyhounds

QUOTE: Originally posted by dubyaM6

UPS bought Overnite to compete with FedEx Freight. Oh yeah, did you hear about the UPS/FedEx merger......?

No, is it the same as the one about the Minister, the Priest, the Rabbi and a duck?

Greyhounds,

Don't be "foul."

Gabe

[edbenton]

Overnite was owned by the UP origanlly and fought the teamsters tooth and nail. USF Freightways aka Holland also fought unions they closed down the Red Star divison rather than give in to the fedaral mediator saying the union won the election. So organizing either one of those companys is a drag out fight.

[Anonymous]

While the UPS purchase of Overnite could be in reaction to all of the moves by Yellow Freight, I think it is more likely to be a result of the Fed EX purchase of American Freightways. A recent article in Business Week stated the American purchase by Fed Ex was a move to increase total market share of the transportation market as well as an attempt to provide "one stop' shipping solutions to customers. UPS reecently bought Mail Boxes ETC., and Fed Ex responded by buying Kinkos. I think it is more a UPS-Fed Ex war than any reaction to recent moves by Yellow.

[CSSHEGEWISCH]

Overnite was originally an independent firm and was purchased by UP several years ago. The purchase may have been an early attempt to provide "one-stop shopping" for transportation services. Overnite was always a non-union operation, same as J B Hunt.

[DTomajko]

I work in Pittsburgh Intermodal Terminal and deal with UPS on a regular basis. First, UPS is the railroads' largest customer, along with JB Hunt & Schneider, pay for and recieve premium service. For example, last December on a Sunday afternoon, NS train 21W was held at Pittsburgh for an hour and a half waiting for 3 UPS trailers to arrive from Baltimore to be loaded. Second, all UPS shipments are not in UPS equipment. UPS utilizes rail trailers,(i.e.: TIPZ, REAZ, SFTZ, BMDZ, VTRZ, XTRZ, etc. ), and therefore doesn't need to maintain as large a fleet to cover busy periods like Christmas during slack periods. If they don't have a load for a rail trailer, it's returned to the rail terminal empty and it's the railroad's problem to store. This also covers the problem of freight imbalances,(more loads in than out), as UPS doesn,t need to deal with equipment relocation. After ten days of empty dwell time at the rail, the railroad must pay the trailer owner for its inactivity, so before the ten days is up, the trailer is sent back to its home terminal,(usually Chicago or Kansas City). Fourth, for UPS to purchase and maintain all the necessary equipment in an intermodal terminal would be quite exspensive. Pittsburgh has two packers,( and is busy enough to need a third), 6 jockey trucks, 3 service trucks, a 2-bay garage, and two tracks & parking space 3/4 of a mile long. Oh, and 20 subcontractor employees & 10 rail employees. Also, we are located next to the busy Pittsburgh line. I am not aware of any UPS facilities located next to a rail line except for Willow Springs, Illinois on the BNSF. As for Roadrailers, the problem of equipment utilization rears its ugly head. Much of the trailers being used might be dispatched over the road with its next load instead of the rail. In Pittsburgh, UPS loads come off for Harrisburg, Pa.; Richmond, Roanoke, & Front Royal, Va.; Washington DC ; and Baltimore, Md. & suburbs. Empty rail trailers can be returned to the nearest ramp if there is no return load. Roadrailers would have to be returned to the nearest roadrailer terminal for now. Fifth, 28ft "pups" are very common at ramps. Across Ohio & Indiana, UPS is operating triple pups and double 45's & 48's. As for stacking pups, the UPSU containers are not necessarily the majority of UPS pups in the fleet. Also, equipment utilization rears its ugly head again. If container pups are in the east and the cars are in the west, now what? If the chassis and box are seperated, what if there aren't enough chassis at the destinations? To the best of my knowledge, UPS 28' containers are never shipped without a chassis anymore. And lastly, if you read the Trains newswire, UPS is stating that Overnite operations will remain independent for now, with seperate managements. There could be possible consoilidation with UPS' truckload / logistics arm; Martrac. Also, UPS enjoys an excellent relationship with at least NS & BNSF, and I believe that it will move Overnite towards more rail. Stay safe and good luck.