That may be true, but they never bid without making a tidy profit. UPS doesn't do loss leaders. They also use the Teamsters 'Team drivers' to great benefit. Only goes on an airplane if no other way to make service. Sure was a pain when we went through that adjustment in late 90's to 2003. We did lose alot of flying over that time. But it gets to the customer as fast as an airplane and at fraction of the cost, it is good business even if I wanted the extra flying. Still less expensive thus ability to lowball on some contracts. Only works in their core products though. They don't go after alot of business just to get 'no profit' business.
As posted, we will switch customers anyway. It is a normal part of our shared business. Personally, think it is good setup for both of us. UPS has done well precisely because Fedex was a market leader and developed it to a point that forced UPS to follow, my benefit as a pilot. <g>