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United Parcel Service, Inc. Message Board

dudesbag 21 posts  |  Last Activity: Sep 19, 2014 8:56 AM Member since: Oct 3, 2004
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  • First forward P/E. UPS stands at 17.33 while FDX is at 14.78. FDX's drastic improvement in their recently reported margins was key here. As we all know, the FDX fiscal year ended in May so their forward price to earnings ratio will always favor ours as earnings invariably increase into the future (this is actually clever market manipulation #1 by FDX). Secondly, UPS has 913M shares outstanding while FDX only has 285M after they have been addressing share buybacks. So UPS has more than 3X as many shares out there as FDX has which is a reason not to split. Thirdly, UPS has always had strength in Europe while FDX is stronger in Asia. This has not helped as the European economy has stagnated. So, when the investing world makes comparisons, we need to shine on our Q3 and not talk about subdued economic conditions. As it is, we've invested much and announced an intention to hire 95K peak season workers, That would indicate that our peak season expectations should be solid. Now our margins need to get back to a higher level and well be fine.

  • dudesbag by dudesbag Sep 17, 2014 10:42 AM Flag

    Wow. Great quarter showing most importantly, a huge improvement in margins. Their shares are going thru the roof. So, it's time for UPS to kick into gear as many of the same tailwinds that helped FDX should be in our report. The only real difference is they had substantial pension savings this Q. We've been talking a good game of late- (adding 95K peak workers, insuring hubs operate optimally during peak, ORION roll-out ahead of schedule, etc.) but it's time to reflect it on the bottom line. We're up today simply on the coattails of FDX. We need to demonstrate we're on the right path too. An interim "we expect to meet or exceed" expectations type of release would be nice. Another "blame it on the stagnant economy" earnings call would be disastrous and call into question a number of things. I don't expect that though.

  • Reply to

    FredEx Independent Contractor Federal Case

    by upsoars Aug 27, 2014 7:37 PM
    dudesbag dudesbag Aug 28, 2014 8:16 AM Flag

    upsoars- very cool! Finally, a REAGAN appointee agrees with his 9th circuit court of appeals that the FDX ground and home delivery IC model is devious. Wait for the lawsuits- present and former IC's alike- to come out of the woodwork. It's about time labor in this country won a seemingly obvious case. NJ ruled a decade or so ago in as similar case involving workers in the construction field building ill-fated casinos. That business model is about as American as companies leaving this country for tax inversion purposes. I wonder what the impact is on FDX share later today? At minimum, if they think they can reverse the decision somehow, the legal expenses will be thru the roof. Wait to hear that Fred Smith is retiring soon..../

  • We were cautious on the last earnings call saying we weren't seeing the robust growth that a 3.1% GDP expectation for 2014 would suggest. Well, today the GAO lowered the # to 1.5% more in line with what we were seeing. I would imagine we have staffed and spent accordingly. With the lowered fuel cost this quarter, we might beat lowered expectations.

  • Reply to

    Converting long-haul fleet to natural gas

    by dudesbag Aug 3, 2014 8:27 AM
    dudesbag dudesbag Aug 27, 2014 9:26 AM Flag

    Paganpink- imagine if administrations that followed Jimmy Carter had kept a focus on solar energy going instead of tearing the panels off the White House roof in deference to big oil? Imagine if we had given the same level of tax credit benefits and exploration support to that industry that the oil and gas industry has enjoyed all these years? Surely you agree that certain parts of the country would be well-served by more solar energy focus while other parts, like the midwest and the 2 coasts, might focus on wind energy. Give me one decent reason why in the post-Carter years we couldn't have figured out a way to harness the only constant energy force- WAVES AT EVERY SHORELINE! They never, never stop. The answer is the energy policy in this country has always been the easy way out. No long-term thinking, just drill baby drill!

  • Reply to

    Forbes article on Dimension shipping charges

    by dudesbag Aug 20, 2014 7:21 AM
    dudesbag dudesbag Aug 21, 2014 2:05 PM Flag

    norjoa- very good- we'll have to "talk" for sure. I'm in he Philly area by the way....

  • Reply to

    Forbes article on Dimension shipping charges

    by dudesbag Aug 20, 2014 7:21 AM
    dudesbag dudesbag Aug 20, 2014 5:39 PM Flag

    Maybe I'm getting my dates confused but wasn't Texas intra a few years earlier? I was on both the Oklahoma and that assignment too. Obviously then we know each other. That being the case, how can I get a personal message to you?

  • Reply to

    Forbes article on Dimension shipping charges

    by dudesbag Aug 20, 2014 7:21 AM
    dudesbag dudesbag Aug 20, 2014 1:28 PM Flag

    norjoa1- did you know anybody from your area that was on the UPS Oklahoma intra-state authority ICC hearing team around 1980?

  • Reply to

    Forbes article on Dimension shipping charges

    by dudesbag Aug 20, 2014 7:21 AM
    dudesbag dudesbag Aug 20, 2014 9:35 AM Flag

    Along those same lines. I wonder if it would be worthwhile for UPS to establish a packaging process and supply business sort of like our retail storefront but designed for small to medium sized companies. It could be another feature in supply chain and logistics segment. We already have the package testing lab that would be helpful in the endeavor. Thoughts?

  • Per the above story, shippers are going to be looking at alternative options to lower the impact of dimension pricing coming next year. Here's my obvious observation. Having been in customer service for part of my career and therefore engaged in damage claims adjusting, more often than not poor packing was the problem with damage claims. It would seem that to minimize package size, the "extra" protection afforded such things as electronic devices or other more valuable contents of packages might be cutback. I guess what I'm saying is the shipper's solution to addressing dimension charges might be to lessen protection around package contents. Not good....

  • dudesbag by dudesbag Aug 18, 2014 4:02 PM Flag

    If nothing else, the lowering of fuel costs will be extremely helpful during Q3.

  • All sorts of questions here such as: 1) how can they afford to charge a mere $5.99 for a prime customer same day delivery with no minimum valuation?; 2) in the Philly area, the merchandise comes from either New Castle, De. or the Harrisburg area in central Pa. Who''s delivering these packages and are they in Amazon trucks? If not, is insurance an issue?; 3) How will all this affect volume and our peak season plans?; 4) was this a response to expected UPS/FDX charging by dimension or was it going to happen anyway? 4) Is it safe to assume that this is a profitable venture since it was rolled out in the trial areas of LA. SFO. PHX and Seattle before the latest expansion including much of the metropolitan areas of the eastern U.S.? Finally, CNBC had an interview with Myron Gray today. He's surely a nice guy but UPS really, really needs to groom excellent public personalities not OK ones.

  • It's curious to me that UPS makes the perfectly logical decision to adopt a goal of converting its long-haul fleet to natural gas and does so with virtually no help from the government. Despite the rapidly expanding acknowledgment that by using NG for tractor trailers and municipal fleets, the cost of fuel for regular cars can be decreased dramatically, companies are forced to proceed on this mission independently. Several years ago, I invested in a company founded by Boone Pickens called Clean Energy Fuels (CLNE). It's stated intent was to establish an infrastructure of NG fueling stations across the highway areas of the country. It's been languishing for the better part of a decade because there has been no coordinated government effort to move the concept forward. A company like UPS can afford to take on huge conversion expenses on its own. But smaller, less cash flush companies simply don't have the capital to do so. My point being, we seem incapable of establishing any type of consistent programming/funding to maintain our nation's highways- that's pretty clear. Not only that, but our congress simply can't recognize the clear connection between controlling fuel costs, lessening our carbon footprint and developing good paying jobs by undertaking a clearly overdue action step of natural gas expansion and the much-needed infrastructure improvements on our nation's bridges and highways. Thoughts? .

  • Reply to

    How About Going Private Again

    by mcfarland343693 Jul 31, 2014 1:42 PM
    dudesbag dudesbag Aug 2, 2014 11:59 AM Flag

    For comparative purposes consider this. California's proposed high speed rail project to carry bullet trains from San Francisco to LA will cost $68B. UPS going provide could easily cost about 1/2 of that. A huge cost in my view.

  • Reply to

    How About Going Private Again

    by mcfarland343693 Jul 31, 2014 1:42 PM
    dudesbag dudesbag Aug 2, 2014 11:22 AM Flag

    Guys- give this some further thought. UPS already has significantly higher debt than FDX for example. So, if they tried to access the capital markets for the funding needed to buy back public shares, the rate would not be all that attractive. We have well in excess of 900 million shares outstanding. Not knowing ho the event would actually transpire, I suspect that many shareholders both institutionally and private would choose to sell their shares and have to be given cash. So the cost could easily be $20B or even much more. So, we'd have a depleted ability to spend on capital upgrades to include critical advances in NG and newer, more fuel efficient planes. If the economy went into correction mode, we'd have a harder time covering our pension obligations and self insurance arrangements. Simply stated, there's very little upside to the suggestion. Meanwhile, I remain convinced that FDX will ultimately have a huge price to pay in fines and tax issues surrounding their independent contractor model and now this ridiculous attempt on their part to fight the on-line pharmacy lawsuit. Patience my friends.....

  • Reply to

    Question for someone in the know....

    by dudesbag Jul 30, 2014 11:12 AM
    dudesbag dudesbag Jul 30, 2014 2:09 PM Flag

    That's sort of my point. There was much discussion about it during the CC and by some analysts afterwards. No real details though. If it's been that way in Chicago for "quite some time" why hasn't this been an identified issue before?

  • During yesterday's earnings call, the troublesome topic of rail transit unreliability came up. Not knowing for sure I posted that there may be a speed slow-down of freight trains since they now carry an excessive number of fuel and chemical cars. I know in my area I see a huge change in this mix of payload and the speed is definitely slower. I don't know if we now command less priority as a profit center by the rail firms or they simply have made changes in their best interests but not ours. Clearly, corporately we've decided to direct more trailers to over the road vs. TOFC. Here's my observation. It would seem to me that 3 things are in play here given this circumstance: 1) how much in delivery time service failure shipping reimbursements did we have to spend in Q2?; 2) how much in employee overtime due to either lateness or additional volume needing to be handled the next day did we experience?; 3) how much more expensive is feeder driver transit of trailers vs. the rail alternative? I'd like to know this for both Q2 and going forward. Anybody have a handle on this? Michael- any of your guys? .

  • Reply to

    Can't afford another x-mas way understaffed

    by s3237fox Jul 29, 2014 3:17 PM
    dudesbag dudesbag Jul 29, 2014 4:06 PM Flag

    Did you listen to the earnings call? Those issues were addressed X2. Full peak season operations in all expanded hubs starting Black Friday. Orion in 45% of drivers for peak. More tractor trailer and sleeper car movement of packages due to unreliable rail network. While they didn't specifically address package car drivers, I'm sure that's in the solution mix.

  • I'm OK with investing now for the future and funding of the Teamsters transition into a defined benefits planned. Clearly, by doing these things 2015 and beyond will be much improved. This is why the quarter to quarter reports are so short sighted. Anyway, off my soap box on that topic. Here's what I would have asked if I were an analyst. 1) what were the impacts of the fuel costs and currency exchanges on the quarter and going forward- headwinds or tailwinds? 2) did the change in speed limits for many freight trains (due to now carrying chemicals and Bakken crude) cause part of the service failures in the rail network? How much $ in service time failures were attributed to this? Will promoting more package drivers into feeders solve the feeder personnel problem or will UPS hire more from the outside? If that were to be the case, does the national tractor trailer shortage cause a problem in finding qualified drivers?
    Overall, I thought the earnings report was not all that bad. We beat revenues by a decent margin and without the capital expense a few correctable issues would have beaten EPS too. I liked that they acknowledged more should have been spent on infrastructure in recent years leading to some degree to the peak season debacle. The ramping up for Good Friday and cyber week is good stuff. I think the veiled warning to the Amazon's of the world to plan better or pay a peak season premium was a good way to get them off their collective #$%$ and do their share to make the holiday season successful. .

    Sentiment: Buy

  • dudesbag by dudesbag Jul 16, 2014 10:09 AM Flag

    I guess I'm just a dummy. Here you have FDX identified as one of 3 companies facing a French government probe for price-fixing. FDX indicates that the issue that involves a ground service company it acquired in 2012 could result in material losses. Sure, it would be a one-time non-recurring loss but a loss just the same. The impact on FDX share price on the news? Up over 1%....

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