jungle

Life often isn't "fair". If anyone thinks they deserve a break because they are qualified or UPS is still making a profit, think again. They are paring it down to the minimum required to get the job done. Domestic is still the big money, International is still the highest margin.
Demographics and Unions have almost nothing to do with these decisions and they won't matter at all in future decisions.
Economic factors outside the Company and the Union are the driver.

Slice

I was once told that UPS sacrificed efficiency for reliability. So much so, that we had airborne hot spares. It seems these days we've gone to the other extreme. IMO extremes are rarely a good thing and we'll end up hosing ourselves(as a company) trying to save a (perceived) buck...

Freightpuppy

You are on crack.

Huck

I absolutely love when I hear this.

And who was on the other side of the table? What were they doing?

Let me ask you this - you own a house? When you went in to the closing, did you give any thought to the seller's profit? Did you think, dang, I better pay a little more, I don't want to get too good a deal....

Contracts are a bargained-for exchange. Both sides are responsible for the outcome. Don't like it, don't sign it. That goes for the UAW too. Those Detroit execs made millions while signing those contracts - and they get their retirements. Then they get bailed out by Washington when their idiocy catches up to them.....

Shaggy1970

The amount of speculation as to what UPS is planning to do in the future is a mystery. The only real known, is that as everyday passes and the economy shows more signs of recovery the better it becomes for all of us in the bottom three hundred. Lets quit with all this nonsense and wait to see what happens May 22nd.

notadog

The Airline is not the most profitable division. Have you ever read the annual report?

JustUnderPar

What is?

Read through mine last week. Looks like the air side is over 2.5x more porfitable than anything else.


U.S. Domestic Package Operations
Year Ended December 31, % Change
2009 2008 2007 2009 / 2008 2008 / 2007
Revenue (in millions):
Next Day Air . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,456 $ 6,559 $ 6,738 (16.8)% (2.7)%
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,859 3,325 3,359 (14.0) (1.0)
Ground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,843 21,394 20,888 (7.2) 2.4
Total Revenue . . . . . . . . . . . . . . . . . . . . . . $28,158 $31,278 $30,985 (10.0) 0.9
Average Daily Package Volume (in thousands):
Next Day Air . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,198 1,186 1,277 1.0% (7.1)%
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 957 947 974 1.1 (2.8)
Ground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,895 11,443 11,606 (4.8) (1.4)
Total Avg. Daily Package Volume . . . . . . 13,050 13,576 13,857 (3.9) (2.0)
Average Revenue Per Piece:
Next Day Air . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18.00 $ 21.95 $ 20.94 (18.0)% 4.8%
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.81 13.93 13.69 (15.2) 1.8
Ground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.20 7.42 7.14 (3.0) 3.9
Total Avg. Revenue Per Piece . . . . . . . . . . $ 8.53 $ 9.14 $ 8.87 (6.7) 3.0
Operating Profit (in millions):
Operating Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,138 $ 3,907 $ (1,531) (45.3)% N/A
Impact of Pension Plan Withdrawal . . . . . . . . . — — 6,100
Impact of Aircraft Impairment Charges . . . . . . 181 — 159
Impact of SVSO Charge . . . . . . . . . . . . . . . . . . — — 53
Adjusted Operating Profit . . . . . . . . . . . . . . . . . . . . . $ 2,319 $ 3,907 $ 4,781 (40.6)% (18.3)%
Operating Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6% 12.5% (4.9)%
Adjusted Operating Margin . . . . . . . . . . . . . . . . . . . . . . . . 8.2% 12.5% 15.4%
Operating Days in Period . . . . . . . . . . . . . . . . . . . . . . . . . . 253 252

JustUnderPar

And the International side: Over 14% margin is not bad.

International Package Operations
Year Ended December 31, % Change
2009 2008 2007 2009 / 2008 2008 / 2007
Revenue (in millions):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,111 $ 2,344 $ 2,177 (9.9)% 7.7%
Export . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,176 8,294 7,488 (13.5) 10.8
Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 655 616 (37.1) 6.3
Total Revenue . . . . . . . . . . . . . . . . . . . . . . . $9,699 $11,293 $10,281 (14.1) 9.8
Average Daily Package Volume (in thousands):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,218 1,150 1,132 5.9% 1.6%
Export . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796 813 761 (2.1) 6.8
Total Avg. Daily Package Volume . . . . . . . 2,014 1,963 1,893 2.6 3.7
Average Revenue Per Piece:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.85 $ 8.09 $ 7.63 (15.3)% 6.0%
Export . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.63 40.48 39.05 (12.0) 3.7
Total Avg. Revenue Per Piece . . . . . . . . . . . $18.23 $ 21.50 $ 20.26 (15.2) 6.1
Operating Profit (in millions):
Operating Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,367 $ 1,580 $ 1,831 (13.5)% (13.7)%
Impact of Intangible Impairment Charge . . . . . . — 27 —
Impact of Aircraft Impairment Charge . . . . . . . . — — 62
Impact of SVSO Charge . . . . . . . . . . . . . . . . . . . — — 7
Adjusted Operating Profit . . . . . . . . . . . . . . . . . . . . . . $1,367 $ 1,607 $ 1,900 (14.9)% (15.4)%
Operating Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.1% 14.0% 17.8%
Adjusted Operating Margin . . . . . . . . . . . . . . . . . . . . . . . . . 14.1% 14.2% 18.5%
Operating Days in Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 252 252
Currency Translation Benefit / (Cost)—(in millions)*:
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (376) $ 324
Operating Profit . . . . . . . . . . . . . . . . . . . . . . . . . . (23) 136

UPSFO4LIFE

I was told when I got hired a few years back, and still believe it to be the case that on any given domestic flight, 2(TWO, I SAID 2) full containers on any airplane, pays for the flight. Every other package is pure profit for the company.

Roberto

That may be true, but without the 100,000+ vehicles, 400,000+ workers, and billions and billions of dollars in plant and equipment that enables the company to deliver those packages to individual customers in over 200 countries within a day or so, how many of those packages would you get paying customers to bring to just any ol' airplane to fly them from point A to point B?