저자: Kevin · 외국인
요약 보기
UPS-Teamsters 노조 협상 결렬 가능성이 물류 차질과 인플레이션 압력을 키울 수 있다고 주장. 파업 시 소비자 배송 지연, 의료·건설 공급망 타격 우려. 다만 UPS 마진은 여전히 높고 운임 인상 여력이 있으며, 7월 말까지 합의가 필요하다고 봄. 발언 중 'Yesterday 70,000 views' 등 채널 운영 얘기가 섞여 있음.
다듬은 글
I am impressed. Yesterday I made a video that, to be honest , I thought would get about 2,000 views. I didn't think this video would be successful, but I wanted to highlight it because I thought it was very important to draw attention to the potential disaster unfolding at UPS. And although I initially dismissed the idea, I realized my mistake: it's not something we should ignore.
We should be watching what's happening at UPS because while we're technically in a freight recession and shipping and package volumes are plummeting, the revenues of companies like UPS aren't actually falling. And UPS's margins are still holding up pretty well. Despite this, UPS is pulling out of negotiations with one of the largest unions, perhaps even the largest union in trucking, which has almost, you know , a third of a million people.
This is amazing. And yesterday in the video where we talked about the potential inflation spike due to the UPS strike, think: tangled supply chains, delays in receiving inventory, which means potentially higher prices for goods and services as businesses and individuals create lines again. This could be a disaster.
I mean, even the threat of a strike could lead to more orders and people stocking up ahead of time, potentially pushing up CPI and PPI, at least temporarily, in the coming months as people worry that a company that handles about 37% of shipments—UPS— could shut down completely, as it has historically done for up to two and a half weeks.
Probably for up to a week, until UPS realizes they need to negotiate with the Teamsters union. But what I wanted to say, what I was struck by, well, I guess I should say before I say what I was struck by, I want to reiterate briefly that, in addition to analyzing UPS's revenue, I actually think it's very, very important that UPS make sure that they address this issue.
My expectation is that this will probably be resolved by the end of the month. I think that would be very smart. I think the 28th is probably a good benchmark. It will be Friday, right? I think it's the Friday before the 29th and 30th. The 31st seems to be Monday. This would be a very good last opportunity to do this.
And it would be good to make sure there would be no downtime . But what struck me was that yesterday I was going to that video knowing that 97% of the Teamsters union supported this strike. But what struck me even more was the support this video received. Again, I thought this video would get about a thousand views and be very niche and little-known.
But no, this was the most successful video I posted yesterday, with over 70,000 views in just a few hours. Uh, I'm going to look at some of the comments here. Let's see what we have. This is incredible. I worked with them during the holidays. Drivers receive excellent conditions. Although they deserve it.
Running up and down 100+ stairs and hallways every day except Sunday, planning and consolidating all packages for efficiency, while doing the job safely. It made me a better driver. They do so many details that Amazon doesn't. UPS workers, I'll like this. UPS, and I really want to dive into some of the reactions here and see what we have, if we can glean any ideas.
UPS workers will never go to work for Amazon. That's a huge reduction in salary and benefits if you really look at the details. This is amazing. I mean, I'm not in the shipping industry, but there's obviously a big difference between the professionalism that you get at UPS and at Amazon, you know, from what we see in the comments here, and you see it a little bit too, but let's leave it at that.
OK. Uh, so no one from UPS is going to work for Amazon. They would have to agree to a 50% pay cut, which, you know, I'll say, is a pretty interesting argument. Like, wait a minute, wait a minute. On one hand, the UPS union says we need more money, but on the other hand, we say, yes, but competitors pay much less.
So I think that's probably an argument that doesn't bode well for UPS unions if competitors pay much less. Apparently, this doesn't support their argument. But I will say, we have a guy from UPS who has been serving us for, I don't know, ten years. It seems like eight years have passed since we've been here.
His name is Brian. This guy is amazing. He always tells me about his retirement, about how he loves working at the company. Maybe not lately, with this threat of a strike. I'll have to talk to him again when I see him. In fact, I have a delivery scheduled from UPS today. You see, Ian, I would n't have gotten this if there was a strike.
Oh, I did n't even think about that . I mean, this will personally affect us, right? But in any case, he has two children. It seems like two children. Maybe the third one has already been born. But he is one of the happiest people I have ever seen. I think one of the reasons he is so happy is because he genuinely loves his job.
And if anyone is anything like Brian at UPS, this must be a great place to work. Someone here writes: “I worked at UPS for 11 years. The threat of a strike arose almost every time a new contract approached. Drivers get paid very well when they reach full- time. The benefits there are also gold standard, even for part-time workers.
" I highly doubt anyone went to Amazon." Oh, wow. No air conditioning, working in 40-degree heat, loading trailers by hand. Oh, it's on Amazon. Horror. I talked to a UPS guy and he says the air conditioning there is like a band-aid. He is ready to go on strike. Okay, interesting. I work at UPS. No one will be fired, even if the strike lasts a long time.
They will simply work and be avoided by anyone who strikes. I'm looking forward to the strike. Let's go. Interesting. Not overstaffed . All UPS drivers complain about excessive forced overtime, especially in this heat . This is really very interesting. I didn't know that, and obviously this comment is getting a lot of attention.
I was under the impression that if traffic volumes were falling, then maybe you had too many staff, but it turns out that's not the case. Okay, good to know. As a current employee, I agree with Kevin when he says the strike will be short. But the comment about the state is wrong. Summer is not easy here, so we have a lot of layoffs, and management says we don't have enough people.
Interesting. So, you have a lot of layoffs in the summer . This is very interesting. This is a very profound remark. They give, I mean , really very valid comments here. So, I see them driving with the doors open. Air conditioning may not be an advantage for them. I think it's honestly a question of efficiency .
Imagine having to open the door every time you want to go in or out. I'm not sure about that. You know, like it was in Florida when you're driving in a convertible on a hot day. It turned out that in an open-top convertible, you have to turn on the air conditioning at full power to enjoy the trip, because it is so hot that you can't do without the air conditioning with the open top .
But really, the support here is just incredible. So, now I'm going to go over some more news that we have. We need more effort to force companies to learn. Vanguard owns 9% of UPS shares. A wage- price spiral is looming. All unions are demanding a 20% wage increase this year. Although some of this may be delayed.
Ryan Reynolds, I love your show. OK. Yes, okay. So, what final updates do we have before we go live for course participants? Don't forget to join. We have a coupon expiration coming up soon, about a week and six days to go until the Fed meeting. We will have an expiration date. Write to us at snafmeke.com if you have any questions, or just visit meetkevin.com to learn more.
So, a wider choice of alternative carriers today compared to 1997, when UPS workers last went on strike, and lower demand for delivery are key reasons why this strike is possible. Here, this is interesting. This is more consistent with my initial argument that potentially, you know, if there's less demand for packages , then that could lead to more aggressiveness on the part of UPS.
As a result, shippers are less willing to accept aggressive rate increases. Well, obviously, employees will probably argue that this isn't an aggressive rate hike, but either way, it's from UPS. Oh, interesting. So there's an argument that maybe people who ship are less interested in paying higher UPS fees, but on the other hand, look at the revenues —they're skyrocketing, despite the decline in actual parcel volumes.
UPS has no rate increase announcements. A company representative said the carrier periodically reviews its prices to ensure they are consistent with the value they provide. UPS, FedEx and other carriers typically announce annual rate increases in the second half of the calendar year. Last year, UPS raised rates by 6.9%—a classic number— citing the need to support continued expansion and improve its capabilities as reasons for the price hike.
The only thing we know for sure is that rates will increase at some point in the future. But how much of this has to do with their concessions to the Teamsters, no one knows. They need to remain competitive . We'll see how much the salary will increase in the next contract . They also appear to have faced obstacles, particularly regarding the payment of part-time workers.
Yes. However, it seems like the takeaway we're getting, at least from Wall Street, is that UPS workers are expecting pay increases. So, there will still be some victory here. FedEx and others will be able to benefit from higher rates. One factor limiting UPS's ability to raise rates is their competitor, FedEx.
The two delivery giants constantly operate in concert. Although I will say that when we looked at the margin yesterday, UPS had significantly better margins than FedEx. But it's not just about them. There are also alternative postal carriers, such as OnTrack and LSO. And, of course, there's also Amazon.
Okay, interesting. Weaker demand makes it difficult to raise prices. This refers to weaker demand for parcels. Makes sense. Demand for UPS cools after pandemic surge . The company's average daily transportation volume by neighborhood. Over the past year, the pricing power of carriers has decreased significantly, meaning it will be harder for UPS to pass on rate increases to customers.
And that's why they seem to be caught between the pressure to raise wages and the inability to compensate for it, which will lead to a reduction in margins. But on the other hand, the margin is already quite high. Good. So, they have a little more information here . Here is an article in USA Today that makes the arguments.
Let's take a look. What do they claim? An article in USA Today about this. UPS workers may go on strike. What does this mean for you? Good. Let's see. The last time they went on strike was in '97. Consumers may face... let's see. Small businesses struggled to replenish supplies, and hospitals had trouble securing necessary resources.
According to the report, consumers could face this and more if the Teamsters union goes on strike and they don't reach an agreement by the end of the month . If there is no agreement, it will cause significant disruptions, according to the Department of Supply Chain Management at Michigan State University.
Consumers will feel this more when purchasing everyday goods . This is an interesting point. In '97, you didn't have what you have today—Amazon. And that will potentially make the strike this time even more destructive than ever before. This, frankly, gives the union a lot more bargaining power, but it will be a problem because if a strike starts, it will affect inflation.
Uh, and we do n't want that. After all, we received good reports on inflation. Please UPS, of course it's a compromise, but both parties need to figure it out. We don't want, nobody wants, a strike. Uh, but I understand that people will go for it. If the strike does take place, it will be the largest strike in the history of this employer.
Oho. This is truly incredible. The largest strike in US history. Even a short-term strike can have huge consequences for consumers. I agree with that. They have a huge network. Removing such capacity from the market, even for a day, will have a ripple effect, as almost 25 million parcels are delivered daily.
Longer wait times are expected during the strike as delivery centers like FedEx and USPS will face an influx of packages trying to compensate for the volume, but they will be unable to do so. FedEx will prioritize existing customers while trying to attract new ones. Of course, supply chain disruptions, car parts—this is where we already feel inflationary concerns, right?
You have inflationary concerns about insurance and vehicle maintenance services. Evil. These are areas where there are already inflationary concerns, and the situation could get even worse. Supply chain. The healthcare supply chain could be affected because wholesale companies that manufacture medical devices and products rely heavily on companies like UPS.
Other industries whose dealers depend on receiving parts from wholesalers through UPS include agriculture and construction. And one more thing: the construction industry is booming right now because home developers have a huge advantage due to the lack of housing stock. Developers have so much pricing power that the last thing you want is a reduction in delivery times for building materials.
You know , I just posted a link for course participants to the live broadcast. Excuse me, we'll make a quick " call" now. We usually have a tradition of making a "bell" together with the course participants. So let's make a " call" together right now. This is a market opening. I need to talk a little more about this inflation.
We'll start with the news, but first, let's make a " call" together. A Turkish ride- hailing app is celebrating its recent listing on the NASDAQ stock exchange via a SPAC. Abacus Life, a company that buys life insurance policies, recently went public. Sorry, by tradition we always like to ring the bell together.
I really enjoy ringing the bell every day, usually with my team members, but I just have to keep talking about this UPS issue because it's really important. Um, I want, I want to give an example like this. I talked to...it was , I bought a computer from a company called iBuyPower, and first of all, never buy anything from them .
Their support team was downright rude to me. I literally paid for expedited manufacturing on July 1st, and they're like, "Class, we'll ship your product by the 6th." I'm like: seriously? Paying $200 for urgent production, or whatever it was, $100-200. Urgent production. This will take until July 6th.
Like, I understand. There is the 4th of July, but it is only one day. In short, it was kind of pointless. But then they say, "Oh, we'll send it overnight." And I'm like, "Okay, fine. If you send it on Thursday night, it'll arrive on Friday ." But they didn't send it until Friday. And then they sent it by overnight delivery.
And they're like, "Oh, well, we didn't mean overnight delivery on weekends. We meant overnight delivery on weekdays." And then he was supposed to come on Monday, this Monday, well, you know, three or four days ago. But it didn't arrive on Monday because it was delayed because they handed it over to the FedEx courier too late, and so it didn't arrive until Tuesday.
But the point is, we had a lot of things planned in business. So in a personal example, we're like, "Oh, we really needed that computer, that's why we paid for urgency," and it's just one box. Um, UPS delivers 25 million packages a day, and everyone's stuff is just as important as anyone else's, except, of course, for hospitals.
You could probably say they're a little more important. But in any case, other industries with dealers that rely on getting parts from wholesalers through UPS, including agriculture and construction. Consumers won't be the only ones affected. This is a new shock to the supply chain. This is literally the last thing we want.
Please, we want inflation to remain at a good level. Don't ruin it. UPS. A strike could also increase delivery costs, even if courier companies do not raise rates during the work stoppage. UPS customers may have to turn to more expensive alternatives from competitors or pay for expedited delivery elsewhere.
I did n't even think about it. I mean, think about it. If you're thinking, "Okay, my shipment is sitting at the UPS location. He is not being taken away. I will take my package back. Now I've lost a day or two. Now I have to pay for overnight shipping, even though I could normally just pay for ground shipping.
look for another carrier to deliver my goods to where they need to be on time. This is not very good. This increases your production costs. Uh , it's hitting profits, which is not good. Uh, a strike could also increase shipping costs, right? We talked about it . This is actually a good article from USA Today.
This might not lead to an immediate price change, but it might encourage direct payments for expedited shipping , right? What can consumers do? Buy online. Do it now. But honestly, even the recommendations to buy online now, you know, just essentially accelerate the inflation and the price pressures that you end up facing.
Other shoppers should consider shopping in person, which is also more expensive, and avoid orders with pickup to avoid delivery delays—this should be easier to accomplish in the warmer months. Uh, it's a blessing that this is happening in the summer. Well, maybe not for drivers because they have to drive in the heat, but it's serious.
And, uh, what's notable, at least what I see is that I don't see any progress on this, and I really hope that we make more progress. Uh , but, uh, it looks like it's not scheduled yet . Uh, I'm going to, I want to take a look at Barron's take on this. So, uh, the International Brotherhood of Truckers released a statement saying that UPS has pulled out of the negotiations.
Yes? This is something we talked about in the past, uh, video yesterday. Uh, I think the actual average number of packages delivered per day is 24.3, a little less than the 25 I mentioned, uh , to be a little more precise. And again , mark your calendar for July 31st, because July 31st is, uh, when we need a deal.
If you go to Carrier, okay, well, this is actually a reprint from USA Today. I was watching Carrier, uh, the magazine, and I'll quickly check out the NPR piece on it. I know some people don't like NPR. Everything is becoming so politicized today. It's just incredibly exhausting. Well, NPR calls them much more vulnerable to a strike this time, particularly to other companies taking over their market share.
And that's also a disadvantage for both sides, right? Because no one wants UPS volumes to go to someone else, because in the end you will have fewer packages. So it's very important that this issue is resolved for both parties, the Teamsters and UPS, by the 31st, and for the entire economy. So please, deal with this.
Anyway, thank you all so much for joining me for episode 122 of the Meet Kevin Report. I need to run to the live broadcast for course participants. I'm already running late, and frankly, I need to make another cup of coffee very quickly. So I'll be there in about 3-4 minutes once the coffee is ready.
Thank you very much to all of you. Please check out my courses if you like my views. Link below, see you in the next video. Goodbye everyone. An will make you money. And if you can prove this value to an employer , you will always be in demand. So, this is another way to make sure you don't get replaced.
Comments 0