Originally Posted by
tnkrdrvr
As has been noted we already have created 310 vacancies. That will take us pretty close, but not exceed, where we were only a few years ago. Subtract out expected retirements and our crew force has basically stagnated for the past several years. That said, I spent my weekend flying USPS volume in a MD. We weren’t supposed to be doing that. Rumor (not from a van driver) has it that the September schedule could be very interesting due to insufficient crews to cover the flying. This could drive more growth. Which would be GREAT!
However, just like FedEx ultimately found that USPS contract to be a poisoned chalice. I have concerns about the volume driving some of these extra flights. Let’s just say, I hope we were compensated for all the air being transported from point A to point B. I don’t know how this contract is structured (that’s management’s job), but unless we are able to move our own volume on these flights they may be money losers. Long story short, I don’t see enough data to make a solid case for substantial growth. Yes, I’m definitely arguing the pessimistic view.
I do think they bid on the contract knowing full well they will use existing assets to leverage additional revenue without incurring too much additional costs (think Fedex adding 60+ airplanes and crews to run the contract). I have asked virtually all load sups about the contents of the my particular loads, and all have stated 5000 flights have lots of non postal volume mixed in. Not worried about that at all. And with revenue/volume sagging (although latest quarter showed modest volume growth), this seems like a good decision going forward. I don’t think UPS intended the postal contract to be a huge money maker, rather a fill in the volume with a bump in revenue without incurring significant new costs. And contract is for 5 years, nothing earth shattering length wise. Gets us a volume/revenue bump the next few years, evaluate in 5 years, determine if relationship is still win/win.