By John Q. Hosedrinker UPS announces 12,000 job cuts, saying that package volume slipped last quarter. This news is disheartening, but not entirely surprising given the changing landscape of the shipping industry. As someone who ships around 100 packages a week, I’ve observed a shift in the market. It used to be a 90/10 split between UPS and USPS, but now it’s more of a 10/90 split due to USPS’s Ground Advantage service, which offers lower prices. This has undoubtedly impacted UPS’s market share.
The rise of e-commerce giant Amazon has also played a role in UPS’s struggles. A few years ago, UPS took a stand and told Amazon to either accept their rates or develop their own shipping program. In response, Amazon developed their own delivery infrastructure, becoming more self-reliant and further reducing the need for UPS’s services. It’s clear that this competition has impacted UPS’s bottom line.
Additionally, I’ve noticed changes within the company itself. As someone in IT, I’ve heard that hiring new resources has become challenging, and contractors are being let go. There seems to be a heavier focus on the center built in India, which is absorbing many resources. The push for a 5-day office workweek is another indicator of cost-cutting measures. It’s clear that UPS is trying to find ways to streamline operations and reduce expenses.
From conversations with former colleagues, it’s evident that UPS’s package volume has been slowly declining. While there were still peak seasons and heavy nights, it pales in comparison to previous years. This decline may be due to multiple factors. The company’s focus on improving quality over quantity, coupled with higher shipping prices, may have deterred some vendors from using UPS. The inflation rates this year could also be a contributing factor. Only time will tell if the summer season will see an uptick in volume.
Interestingly, as a property manager for a self-storage facility, I’ve noticed a decrease in UPS’s use of our units during the Christmas season. In previous years, they would rent multiple large units, causing headaches for other tenants. However, this past year, they only rented one smaller unit, indicating a decline in volume nationwide. It’s not surprising to hear about the job cuts, as it seems that vendors who use USPS and Amazon were the winners of the past Christmas cycle.
Moreover, there have been complaints about UPS’s service quality. Some customers have reported missed deliveries, with packages being redirected to local stores for pick-up. This change in their model, where customers are required to pick up packages themselves, may be a response to cost-cutting measures. It’s clear that there are challenges within the company’s operations that need to be addressed.
It’s important to note that job cuts of this magnitude will have a significant impact on employees and their families. As someone who has been a union member for over a decade, I understand that even long-standing employees are not immune to layoffs. It’s a harsh reality that often the least senior employees are the ones who bear the brunt of cuts.
However, it’s disheartening to see that while job cuts are being made, the company’s profits continue to rise. The announced $1 billion in cost savings from these job cuts will undoubtedly benefit shareholders at the expense of hardworking employees. This raises questions about the priorities of management and whether they could have explored other options to mitigate the impact on workers.
In conclusion, UPS’s announcement of 12,000 job cuts is a clear reflection of the challenges the company is facing. Changes in the shipping industry, increased competition from Amazon, and declining package volume have all contributed to this situation. While cost-cutting measures are necessary for a company’s survival, it’s important to consider the impact on employees and explore alternative solutions. Moving forward, UPS will need to adapt to the changing landscape of the shipping industry and find a balance between efficiency and employee well-being.