jack holmes president – ups freight. 2 trucking’s ups and downs ups entered the ltl arena in...
TRANSCRIPT
Jack HolmesPresident – UPS Freight
2
Trucking’s Ups and Downs
UPS entered the LTL arena in 2005- In 2005 and 2006, the top publicly-traded LTL companies made $3.3 billion in profit
UPS endured the economic downturn of 2008-2009
–While the publicly-traded LTL companies mentioned above lost $900 million
UPS Freight is well positioned for the LTL industry of 2011
Strategy, Not Tactics
3
When the industry tightened in 2008…
•Many LTL and TL companies dropped long term strategies•Instead, they focused on quick volume and revenue grabs that were unsustainable
UPS remained focused on the long-term goals of their entry into the LTL and TL markets
•While other companies fixated on the immediate issues, UPS kept investing in technology, in equipment and in people•UPS does not manage business by the quarter
4
Our Approach to LTL and TL
Focus on improving core competencies•Quicker delivery lanes
•Expanded coverage
•Better reliability
•Easier customs clearance
5
Technology
Focus on improving core competencies•Quicker delivery lanes
•Expanded coverage
•Better reliability
•Easier customs clearance
•Manage fuel prices
•Idling, speed control
•Develop more efficient routes
6
Visibility
Focus on improving core competencies•Quicker delivery lanes
•Expanded coverage
•Better reliability
•Easier customs clearance
•Manage fuel prices
•Idling, speed control
•Develop more efficient routes
•Tracking•WorldShip, InternetShip and CampusShip
•Quantumview Manage
•Paperless Billing Products
7
Enterprise
Focus on improving core competencies•Quicker delivery lanes
•Expanded coverage
•Better reliability
•Easier customs clearance
•Manage fuel prices
•Idling, speed control
•Develop more efficient routes
•Tracking•WorldShip, InternetShip and CampusShip
•Quantumview Manage
•Paperless Billing Products
•Bundling
8
UPS’s Goal:
Change the LTL value equation.
9
UPS and Healthcare/Personal Care
•“Patients, not Packages.”
•Characteristics of a good transportation provider for your industry
•Reliability
•Visibility
•Temperature Sensitivity
•Logistics!
10
Compliance and Sustainability
•Fuel efficiencies
•Route development and “no left turns”
•Alternative fuel vehicles
•Sustainability options for customers
•Packaging
•California regulations
11
Logistics
•Very few industries benefit from superior logistics like the healthcare/personal care industry does
•Warehousing and distribution
•Fulfillment
•Visibility
•Time-in-transit
•Reliability
12
The Real American Economy
•What we produce, not what Wall Street predicts
•Manufacturing is up, so are fuel costs
•Trucks and drivers on the road
•Obstructions, detours and road blocks coming down the pike
13
Important issues in 2011Hours of Service Proposal
•Current rules have helped create a 20% annual decline in truck-related deaths since 2004
14
Important issues in 2011Hours of Service Proposal
•Current rules have helped create a 20% annual decline in truck-related deaths since 2004
•New Proposal - Hours of Service•Would reduce driver hours per day from 11 to 10•Would institute an “on-duty” window of 14 hours•Would require a 48-hour restart window instead of the current 34-hour window
15
Important issues in 2011Hours of Service Proposal
•Current rules have helped create a 20% annual decline in truck-related deaths since 2004
•New Proposal - Hours of Service•Would reduce driver hours per day from 11 to 10•Would institute an “on-duty” window of 14 hours•Would require a 48-hour restart window instead of the current 34-hour window
•Impact of the new rules:•Elimination of many next-day lanes•$2.2 billion in additional cost to trucking companies•More equipment, more drivers, operating on the U.S.’s outdated transportation infrastructure
16
Important issues in 2011Fuel Costs
•Trucking will consume 35 billion gallons of
diesel in 2011
•Cost of $135.8 billion•$35 billion more than was spent in 2010
•Diesel is up almost $1 per gallon since
last year
17
Important issues in 2011CSA 2010
•Comprehensive list of safety measures
•UPS fully favors raising the acceptable level of
safety on our roads
•Important industry note: CSA will raise the
cost of doing business for many companies, and
those companies will push the costs onto their
customers
18
Transportation in 2011
•New regulations
•Capacity issues
•Driver shortages
•Higher fuel prices
Thank you.