I just wonder, in a sort of big picture, philosophical way, is this good or bad for our industry on the whole? MR. Brutto seem's to be saying that in this microwave society that instant gratification is a new factor driving this industry. Which could be good news in term's of increased volume, but, bad news in term's of taking what used to be a very specialized industry and "normalizing" it. In other words, once instant delivery is S.O.P. do we all become a sort of specialized segment of the LTL freight mover's division. Seem's to me that'll drive rates down and we'll all need 28 foot cab-overs and decking classes. Whether that's good or bad i can't say, but could that be our future ?
UPS Express Critical
- Thread starter grog111
- Start date
In reality, the O/O biz will go the way of the Pony Express in time anyway. The more modern we get and the more efficient and less costly shipping becomes, the need for expedites will fall to a minimal %.
More & more everyone ships to warehouses/logistic centers,and the trend to modern facilities located near major metropolitan areas is coming on. Better planning and production techniques, avoiding the yo/yo affect of production, etc. will all work to eliminate all the sitting around, then sudden shipping. Even the big trucks sit more than before...
In other words, we are heading back to big trucks shipping to distribution ctrs., LTL's taking them in, or straights. Besides, after the congestion, air quality, accidents, and the latest bridge disaster, who wants 53' trucks in cities?
Real owner/ops are also rapidly becoming dinosaurs. I would like a real-world figure in expediting alone, of just how many of us are actually left...
More & more everyone ships to warehouses/logistic centers,and the trend to modern facilities located near major metropolitan areas is coming on. Better planning and production techniques, avoiding the yo/yo affect of production, etc. will all work to eliminate all the sitting around, then sudden shipping. Even the big trucks sit more than before...
In other words, we are heading back to big trucks shipping to distribution ctrs., LTL's taking them in, or straights. Besides, after the congestion, air quality, accidents, and the latest bridge disaster, who wants 53' trucks in cities?
Real owner/ops are also rapidly becoming dinosaurs. I would like a real-world figure in expediting alone, of just how many of us are actually left...
Packmule
Expert Expediter
Grog111,
Very good observation!! And point well taken by Simon. All of these possibilities or there in the not so distant future, but changes in the immediate future will set a direction for the industry for years to come. There will always be a need for the service we provide because no manufacturing company or transportation Company will ever be perfect. They will always have their "OH SH!T" Moments. But how is is covered and by whom will change.
By UPS making the public announcement of their Critical Freight division tells me they have a Plan, and a marketing and advertising program ready to put into action. I don't think they are just doing this to be a "ME TOO" in critical freight. They were already there, even if they outsourced the service. They were not making an investment and could still cover the customers needs.
Now it is a different story. They are identifying their Critical Freight division by NAME, and I am sure will promote it. Why would they promote this service and have a FedEx, Panther, Express1, and so on truck pull up to a customers dock with that companies billboards all over it. Wouldn't that be like inviting the Fox into the hen house?
So then the question I pose is, If they are going to start this campaign in the next 90 days, where and how do they develop an overnight fleet of their own to cover the business? Several possibilities and I feel at this point they already know.
Again, just me thinking aloud. could be way off course.
Danny
Very good observation!! And point well taken by Simon. All of these possibilities or there in the not so distant future, but changes in the immediate future will set a direction for the industry for years to come. There will always be a need for the service we provide because no manufacturing company or transportation Company will ever be perfect. They will always have their "OH SH!T" Moments. But how is is covered and by whom will change.
By UPS making the public announcement of their Critical Freight division tells me they have a Plan, and a marketing and advertising program ready to put into action. I don't think they are just doing this to be a "ME TOO" in critical freight. They were already there, even if they outsourced the service. They were not making an investment and could still cover the customers needs.
Now it is a different story. They are identifying their Critical Freight division by NAME, and I am sure will promote it. Why would they promote this service and have a FedEx, Panther, Express1, and so on truck pull up to a customers dock with that companies billboards all over it. Wouldn't that be like inviting the Fox into the hen house?
So then the question I pose is, If they are going to start this campaign in the next 90 days, where and how do they develop an overnight fleet of their own to cover the business? Several possibilities and I feel at this point they already know.
Again, just me thinking aloud. could be way off course.
Danny
dhalltoyo
Veteran Expediter
Of course they have a plan.
The greater the financial risk...the more in depth the planning.
And they are pretty slick too!
In the world of expedited freight think about two carriers who have great BRAND NAME recognition.
Landstar Express America and FedEx Custom Critical.
Hats off to the folks in marketing at UPS.
Trivia question: In the movie 2001 Space Odyssey the computer was named HAL. How did the writers come up with that acronym?
The greater the financial risk...the more in depth the planning.
And they are pretty slick too!
In the world of expedited freight think about two carriers who have great BRAND NAME recognition.
Landstar Express America and FedEx Custom Critical.
Hats off to the folks in marketing at UPS.
Trivia question: In the movie 2001 Space Odyssey the computer was named HAL. How did the writers come up with that acronym?
greg334
Veteran Expediter
>Trivia question: In the movie 2001 Space Odyssey the
>computer was named HAL. How did the writers come up with
>that acronym?
Sorry I am bored this morning and don't want to do house (sleeper) work, so here goes......
Heurisically (sp?) programmed ALgorithmic computer
But when I worked with the big blue guys and gals, they pointed out that HAL is one each letter removed from IBM
Hummmm.... I think Clarke was on something when he wrote the book anyway.
>computer was named HAL. How did the writers come up with
>that acronym?
Sorry I am bored this morning and don't want to do house (sleeper) work, so here goes......
Heurisically (sp?) programmed ALgorithmic computer
But when I worked with the big blue guys and gals, they pointed out that HAL is one each letter removed from IBM
Hummmm.... I think Clarke was on something when he wrote the book anyway.
I have worked 10 years for UPS,then 9 years for Fed-ex express,then 2 years for Custom Critical.I've seen both sides of these "giants" from the inside out.All I'm going to say,is that UPS has 'DEEP" pockets financially,and they are not called "the brown giant "for nothing.Both companies are 1st class outfits and in heated competition for the "shipping spoils of the world".When UPS first entered the next day air market ,with a cheaper rate,Fed-ex followed with a lowering of their rates to match.Just like fed-ex ground competes with UPSground in their rates too.I'm afraid, that when UPS gets their expedite operation off and running,there there will be a "new rate" in town ,and this will not be a good thing for the contractors.The "Brown Giant "is coming,and changes are inevitable.They have so many shippers world wide its not even funny,just about every dock/shipper has UPS in some form .Also the HOS hours being lowered to 10,this was a victory for the Teamsters,and guess who has the most teamster members,you guessed it UPS.Big company,Big assets,Big union,a a formidable foe.
greg334
Veteran Expediter
Well Dave, I agree with you but remember that big business looks at things differently and like another big business, Pfizer, it took them a few times around the block at a great loss to get one of their subsidiaries straighten up enough to bring it into the fold.
So let's see....
So let's see....
I agree. The three times in a year kinda tells me they are testing the waters in a few different ways. As to whether it will drive rates down, I am not so sure. Too many things come into play as to whether that happens or doesn't.
Davekc
owner
23 years
PantherII
EO moderator
Davekc
owner
23 years
PantherII
EO moderator
Packmule
Expert Expediter
If we were were talking a Mom and Pop operation then I would say Look out for lower rates, but, a company like UPS is out to get the top rates for a top level service that the market will allow. Nobody wins in a cut rate competition. If anything is gained it's usually temporary.
Danny
Danny
Very good point. The ones that benefit from a UPS expansion into expedite is UPS and Panther. It is a win-win for both. The objective for UPS is to retain and obtain customers that require full logistic support. Not just expedite. If brand matters as some suggest, then I could see some competition heating up between UPS and the Fed.
Davekc
owner
23 years
PantherII
EO moderator
Davekc
owner
23 years
PantherII
EO moderator
Actually, what i'd like to see, is someone.... anyone, break the choke hold that NLMI has on the automotive freight industry. I personally hold that group responsible for alot of the problems we have in this industry. I think if UPS would hard sell to the new ford/visteon splinter group...what is that...."automotive supply managment" or some such nonsense...anyway, if UPS would hard sell them and the splinter group supplier's that are surely to come from the " NEW CHRYSLER" I think We'd really have something to cheer about.
greg334
Veteran Expediter
Actually, what i'd like to see, is someone.... anyone, break the choke hold that NLMI has on the automotive freight industry. I personally hold that group responsible for alot of the problems we have in this industry. I think if UPS would hard sell to the new ford/visteon splinter group...what is that...."automotive supply managment" or some such nonsense...anyway, if UPS would hard sell them and the splinter group supplier's that are surely to come from the " NEW CHRYSLER" I think We'd really have something to cheer about.
Grog111,
The NLM is part of the automotive world because they want it that way, the same with when they had only one internet and data exchange provider under the ANX network standards, AT&T. They like it the way it is but they do not send all their freight that way, GM for one has been working with a couple companies to move things quicker and cheaper.
As for holding them responsible for our problems, no where near it. If anything it is the companies who use NLM as their only source for work that is the problem. I don’t know if they do this anymore but I took a whole day to go to NLM and spent the day learning all about them and what they actually do, pretty eye opening.
The ‘new Chrysler’ from what I hear is not going to be 100% all new or have all that big amount of autonomy that was talked about, D-C will still own a good enough share of it to maintain the contracts and agreements intact.
Dave,
I don’t get the connection between panther and UPS both gaining something out of this. Please explain.
Grog111,
The NLM is part of the automotive world because they want it that way, the same with when they had only one internet and data exchange provider under the ANX network standards, AT&T. They like it the way it is but they do not send all their freight that way, GM for one has been working with a couple companies to move things quicker and cheaper.
As for holding them responsible for our problems, no where near it. If anything it is the companies who use NLM as their only source for work that is the problem. I don’t know if they do this anymore but I took a whole day to go to NLM and spent the day learning all about them and what they actually do, pretty eye opening.
The ‘new Chrysler’ from what I hear is not going to be 100% all new or have all that big amount of autonomy that was talked about, D-C will still own a good enough share of it to maintain the contracts and agreements intact.
Dave,
I don’t get the connection between panther and UPS both gaining something out of this. Please explain.
UPS has always had a expedite division but is small and seldom promoted. With a launch of sorts of this service, it will be sold most likely to existing customers that don't know of its existance.
It will also help them be competitive in the full logistics market.
Their competition is primarily Fedex,DHL, and LTL carriers, not any of the expedite companies because the market is too small.
Panther benefits because as UPS gets more expedited business, that in turn provides loads for Panther. We do alot of expedite now with UPS so it is a win win. They do use other "vendors" but not on the same scale for their expedited services. They have a handful of the Menlo trucks and what not, but they do more regional work. If that were to change, I believe it would take them quite some time to build their own fleet.
Davekc
owner
23 years
PantherII
EO moderator
It will also help them be competitive in the full logistics market.
Their competition is primarily Fedex,DHL, and LTL carriers, not any of the expedite companies because the market is too small.
Panther benefits because as UPS gets more expedited business, that in turn provides loads for Panther. We do alot of expedite now with UPS so it is a win win. They do use other "vendors" but not on the same scale for their expedited services. They have a handful of the Menlo trucks and what not, but they do more regional work. If that were to change, I believe it would take them quite some time to build their own fleet.
Davekc
owner
23 years
PantherII
EO moderator
greg334
Veteran Expediter
Dave,
I see what you are driving at but I don't know if that will be a lasting thing, UPS may go after enlarging their fleet using their existing model of employees instead of contractors, which they seem to only use contractors sparingly within their organization. This would give them even more flexibility to work with the customers for the services they need.
By the way, I have hauled UPS loads too and I don't know if there will be or is an exclusive contract between UPS and Panther but truthfully I would think if there was one, it would not be to UPS's advantage at all to be tied to one carrier to fulfill it's needs.
I see what you are driving at but I don't know if that will be a lasting thing, UPS may go after enlarging their fleet using their existing model of employees instead of contractors, which they seem to only use contractors sparingly within their organization. This would give them even more flexibility to work with the customers for the services they need.
By the way, I have hauled UPS loads too and I don't know if there will be or is an exclusive contract between UPS and Panther but truthfully I would think if there was one, it would not be to UPS's advantage at all to be tied to one carrier to fulfill it's needs.
I don't think it would be cost effective for them to use employees because of the cost ratios in expedite. No real point if the service is already available to you. I don't think Panther is exclusive to all "expedite loads" but with on site reps they are more of a first call. Same with the Fed. We have hauled CC loads but are not likely the first call in those situations. I know TriState was doing some UPS loads, but not sure how many they are doing now. I think Jbears with UPS had a post up awhile back on some of this.
Davekc
owner
23 years
PantherII
EO moderator
Davekc
owner
23 years
PantherII
EO moderator
Greg, perhaps i should have taken the time to talk more about the nuances of NLMI, which are really the problems of which i speak when i say "that group". As you know group's such as Penske serve an important role in the logisitical side of maintaining proper order in the managment of JIT freight and various other production and pre-production misfortunes, however, that being said, let's focus on the ramification's of a system that deal's with tier selection and spot bidding as a manipulation of cost factor's including but not limited to the derision of team pro rates and "back haul" configuration's. I believe that this system set's the standard's for many other opperational organization's who may want to compete. NLMI, to be used as a tool in logistical management and over sight, of course is perhaps an operational necessity, but the downside is how the system is managed, or mis-managed, better said, by manipulating carrier's ,(and as a consequence, driver's), to atain and maintain certain standard's to qualify in "tier" status consistantly are required to "stretch" the truth on delivery times and driver status, maybe more-so for smaller carriers than larger one's ,but even so. The ability for a carrier to "spot bid" freight again is a manipulation of the ability of a larger carrier to get a driver out of a so called "bad area" when in fact the opposite should be true and a bad area haul should be awarded a rate comiserate with the duration of the time it takes the driver out of the financial cycle. Also, in a manner of speaking, although certain group's such as GM may not be contracturally obligated to enter their shipment's into the NLM system, there is pressure brought down by management and accountant's and other people who over see the shipment's in some regard understandably so, however, not in all cases. Again i see this as manipulation by a corrupt system. Not that the system is inherently corrupt, but rather that it has been corrupted. My boss at VOLARE EXPRESS had been on the development committee during the original development of the NLM system and told me from the beggining that it was riddled with such flaws and as a consequence she had stopped in her participation. Now i could go on to pick them apart line by line and precept by precept but that would be boring and i think you get the jist. But it's the concept of the system as much as the system that has made the system so much a thorn in my side. And as far as setting up systems that inherently change the way thing's are done...well...automotive freight and the JIT system are by far...by far the biggest contributer to how expedited freight is managed. And although fed-ex may not deal primarily with automotive freight, most...most other carriers do deal with it, at least from time to time. So maybe NLMI doesn't single handedly have automotive freight locked up, but they are very influential on the entire landscape of operation and procedure as well as pricing.
Very good observation. NLM is good for the large carriers in some respects, but not necessarily for the smaller ones unless they maniplate the system or the "big three" are very busy.
To carry their averages and all that is involved in their point system makes it difficult for a small operator unless they cheat the system. Many do, which should come as no surprise. Delivery times, putting multiple shipments on trucks is all common place.
For the ones that claim they don't haul auto freight, fail to see a bigger picture in how they might be affected. When auto freight slows, those carriers that are reliant upon it are now looking in those other markets to keep trucks moving. Their is another introduction to how cheap rates evolve.
Davekc
owner
23 years
PantherII
EO moderator
To carry their averages and all that is involved in their point system makes it difficult for a small operator unless they cheat the system. Many do, which should come as no surprise. Delivery times, putting multiple shipments on trucks is all common place.
For the ones that claim they don't haul auto freight, fail to see a bigger picture in how they might be affected. When auto freight slows, those carriers that are reliant upon it are now looking in those other markets to keep trucks moving. Their is another introduction to how cheap rates evolve.
Davekc
owner
23 years
PantherII
EO moderator