UPS has made $3.5 billion in profits after taxes already this year and it’s not even peak yet. Corporate brass predicted yesterday that profits for the year could top $5 billion. Volume is down, but profits are up. How? Speed-up and subcontracting.
UPS announced robust profits on a conference call to release its third quarter earnings and its projections for peak. UPS made $1.26 billion after taxes in the three months alone and projects up to $1.6 billion during peak.
While UPS rakes in billions, some 9,000 UPS Teamster retirees have been put on notice that their pensions will be cut in half.
UPS’s profit haul comes as ground volume in the U.S. has actually declined slightly for the first time in 4½ years because industrial production and business-to-business deliveries are down.
How is UPS making more money on fewer packages? First, through old-fashioned speed-up. The company is putting more packages on the trucks and using technology and virtual OJS’s to harass drivers into working faster.
UPS’s second profit-boosting tool is subcontracting. While business-to-business volume is down, profits from business-to-consumer deliveries, including online shopping orders, are up.
UPS is squeezing more money out of this growing segment of the market by exploiting SurePost and Access Point at the expense of Teamster jobs.
UPS recently acquired the Coyote Logistics and has announced plans to use the nonunion carrier to undermine Teamster feeder and sleeper-team work starting at peak.
Management is thinking ahead and being proactive; the Hoffa-Hall administration is not.
The result is higher profits for UPS, but declining working conditions and job growth for Teamster members.
We all want the company to do well. But union members are supposed to benefit from growing profits. Without strong International Union leadership to fight for our share, Brown’s growing profits will be made at our expense.