With UPS and the other big nationwide express companies, no contract = surprise.
One day the pipeline gets turned off. No packages to deliver. No warning. No notice. No cancellation. This is pattern for past 20 years. You say several million dollars in UPS type work... That is a concern because it could vanish.
OTOH, non-contract means they are paying good prices for deliveries. Enjoy the margins while you have them. When the traffic vanishes it will not be because of price or service.
Finally some common sense on this post! The days of messenger/distribution/airfreight/warehousing/logistics omnibus companies ae numbered. The inability to provide 99% On Time performance, online tracking, accurate detailed invoices, 30 day terms, professional management and drivers in uniform and not on parole violation means one thing; goodbye VEXP and CD&L! These bottom feeders have no vision, no leadership no vitality and no future. Maybe they can hang on to their On Demand and route and timed services but from what I hear Pitney Bowes, Ikon Office Solutions,etc. will be chomping at tis piece of the pie too.
No "inside information" is needed. Check out www.ups.com. Click on corporate companies. In addition to big brown, UPS has nine other companies that DO NOT have Teamster contracts. Two of the companies rely totally on the independent contractor model. Three of the companies don't even have a single driver.
I just reviewed my previous post and I do not see where any implications of UPS contracts was mentioned. Big assumption on your part, but thats okay. I did say that UPS has a couple of thousand "I/C's" and that is where a piece of the "fit" is.
There are many venefits (Velocity Express benefits) for aquisition by many big transportation providers, but the truth is I'd rather see them make it on their own.
You seem to be so focused on the trees that you aren't allowing yourself to see the forest. Perhaps, your previous experiences won't allow you to see what could be. That is to bad. I wish you the best.
Back in Black
When the posters say that something big is coming, it may more likely be a big negative than a big positive
You may have read my previous posts about the quality of management and quality of cash flow being determinants of future.
The "something big"s that have been cited I have discounted since I have some knowledge of the customers traffic and payment habits.
I keep watching because this company should have died long ago. There are always lessons to be learned from train wrecks. Purolator Courier then Emery then CF Airfreight all taught lessons. US Delivery and United Transnet provided lessons. Skynet and Pony Express taught us things....
Those who stagger and die leave more lessons than success after success at UPS or FedEx.
The total transportation industry is changing and customer needs are evolving. Opportunities abound for the quick and agressive. The cement is not set. I see a wholesale change in shipping and distribution patterns greater and more disruptive than the move to overnight letters and documents. I am looking for companies that have the potential to respond and thrive in the new environment.
Got any suggestions? Have you seen any companies with quality management, cash flow and quality customers...?
I like Arkansas best (ABF) Old Dominion, Swift, UTi.... I think these will out perform the market over next 12 months. I think FedEx, UPS, Yellow/Roadway will be solid performers but not exceed the market. I think their management are bureaucratic politicians and have lost the ability to lead...
Altho I may be wrong about UPS... They are agressive on many fronts and may surprise. Their Teamster relations may cost them time-money-opportunity.
Dynamex(DDN) like AirNet(ANS) have a nice business but their market is finite and may be deeply affected by technology....
Hello Andy -
I would not pay a lot of attention to the posts saying that "something big is coming". Posters have been saying this for months and years, and nothing big ever comes.
And maybe over the past couple of years something "big and positive" has occurred, but there has always been something that has been "bigger and negative" to offset the big occurrence... revenues for example.
When the posters say that something big is coming, it may more likely be a big negative than a big positive.
If you have inside information then you possess knowledge I lack. Researching private contracts is a bit difficult for the average investor.
I am aware of the UPS "contractors" I am also aware of the Teamster perspective. The contract arises for renewal every two years... Perhaps there will be some changes in the next round of negotiations. There is already some concern about UPS Basic and the USPS work... Why should VEXP be immune to any changes?
The posts imply that VEXP has UPS contracts that are of sufficient revenue and duration to be of long term benefit to the company... These are not statements made by management of VEXP or UPS. My experience with UPS, FedEx and DHL/ABX work is that if the margins are good, there is no contract. If the margins are thin there is a contract. In either event, the major express carriers will act in their own best interests at all times...
I'm sure if you know "UPS very well" that they are not just "teamsters" They have several different business segments that have synergies with VEXP's segments.
You can't "contract out" teamster jobs that aren't there. Did you know that UPS has over 2,000 independent contractors of their own and managing that relationship is proving to be difficult for them?
Perhaps a little more research on your part is necessary prior to your posts. Good try though.
A brilliant last paragraph if I may add.
All I know about VEXP is what I read in their public documents. I have no insider information. I do not know what "IR" is..
I also have years of experience in this industry. I know the big carriers and the small route courier business very well. I know many of the customers and their billing/payment practices... I also know many of the competitors. I know UPS very well.
The dynamics of the business are fairly straight forward. If you are saying that millions of their revenue is UPS then I must discount their financial picture even more. UPS does not allow much margin in their payments... UPS seldom grants long term contracts. As I stated, the UPS Teamsters have some serious views on "contracting out"...
UPS has changed and is changing. They will not long do anything that does not benefit UPS. The same can be said for FedEx and DHL/Airborne. It is too bad that VEXP can find no retail customers of their own. Perhaps it is because they cannot clearly articulate their service niche to potential customers?
The Philosophy of "Anything For A Buck" looks good to the stock analysts who like to see topline growth. Anyone who has a route structure knows that route density and route planning are the only ways to make a success.
Using IC's makes VEXP a transportation broker.
They are not portraying themselves as brokers. I am sure that people shipping with UPS do not know it's a hand-off to a hand-off to a hand-off.... Eventually these deals go sour and leave everyone with an bad taste and upset stomach...
There is nothing they have that a "major carrier" can use.... DHL/ABX is the only possibility. However, fixed route structure and irregular route deliveries do not have a one market fits all dynamic.
This makes sense if one wants to hype the analysts. They do not know the industry. They see trucks and assume that all who operate trucks are in the same business.
So the question is whether this is news for analysts and bottom feeders, real investors, or just more efforts to keep hope alive in a demoralized work force......
You have a history of postings that contain inuendos, falsehoods, and misleading remarks.
Never any intelligent analysis, facts, or thought provoking comments.
And then you invent "logistics201" in an attempt to corroborate your mindless gossip.
Please be aware that the other posters on this board can see right through your foolhardy attempts to promote this stock.