What’s behind UPS’s “extraordinary growth”? The US Postal Service

According to an article in Logistics Management, the “star” of United Parcel Service’s impressive fourth quarter performance was its Sure Post product, which uses the US Postal Service to actually deliver B2C parcels:

Jerry Hempstead, principal of Hempstead Consulting, said that the biggest admission on the call by UPS was that the star its fourth quarter performance was its new Sure Post product offering, which is a contract-only service that combines the consistency and reliability of the UPS Ground network, from pickup through transferring to the Post Office, with the cost benefits of using the United States Postal Service (USPS) for final delivery.

All the talk was of the extraordinary growth they saw in B2C and it’s obvious from the numbers that this segment can be wildly profitable when one uses that truck and driver that goes to every home six days a week operated by the Postal Service,” he said. “For the first nine months of the year UPS’s ground volume was down slightly year-over-year, but because of the volume surge in the fourth quarter it finished ahead of last year by 0.8 percent. Modest for sure but that’s still a lot of packages.”

via UPS reports 6 percent increase in Q4 2011 revenue – Article from Logistics Management.

  • Bob

    We do 99% of the work and they get 99% of the profit. Now you can see why we are failing.

  • steve manos

    As a retired clerk, I don’t see where BOB gets the idea that the Postal Service is doing 99% of the work on UPS drop shipments. The USPS doesn’t do the initial sort, don’t have the transportation costs to get the parcels across the counrty, and for large offices and stations in larger towns, there is no secondary sort to the 5 digit zip. All we deliver is the last mile, which, as the article stated, we travel 6 days a week anyway.

  • Guest

    Way to go Donahoe and Vogel. Your dismantle of the Postal Service is right on track.

  • Capture some savings

    UPS drops parcel at post office, clerk is there anyway, postal carrier lugs package for next day delivery, in which the profit is minimal for the carrier for packages over the counter at mail is very minimal. So who profits…UPS and management. USPS motto is so what if the carrier knows how this works, what are they going to do about it! Well you get the message!!

  • Steve

    I’m a carrier in Texas UPS just dumps the stuff on the dock it’s not pallatized or anything its just in a heap. We never know how much we’ll get so we usually don’t have enough clerks to work them. At least fedex brings it on a pallet.

  • Ralf

    I am USPS, and my wife is FEDX. She say thank you for the USPS she has a job. We used to start at 5am., and delivered the Wallstreet Journal & Barons, now we start later and now independants deliver the Journal & Barons. We moved delivery further back WITH NO PREFERENCE to Business mail, and FEDX created 8am Guarranteed. The internet isn’t taking our business, we’re pushing customers away~