The country’s cargo forwarders have warned the government against declaring an open-skies policy for cargo in the Diosdado Macapagal International Airport (DMIA) in Clark Air Base, Pampanga, saying the move would result in the collapse of the local cargo industry.
In a statement, Robert Lim Joseph, president of the Save Our Skies Movement, to which the cargo forwarders belong, said the President should study thoroughly the long-term implications of a cargo open skies in DMIA.
“The initial effect of this policy will not be felt. But in the long run, it will have dire consequences on cargo forwarders and, subsequently, the aviation industry,” he stressed. Under an open-skies regime, there is no restriction on the entry of foreign cargo carriers into the country.”
Joseph expressed fears that people around the President might be giving her the wrong advice on the issue. “We fear that the President could be misled into declaring open skies for cargo in DMIA,” he said.
He said one of the major consequences of the move is that foreign cargo integrators will control the cargo business in the country, dislocating in the process local businessmen and companies.
“How can small cargo forwarders compete with such American giants as United Parcel Service [UPS] and Federal Express [FedEx]?” he asked.
At present, UPS, which is operating at Clark, has eight cargo flights daily using jumbo jets.
The Philippine cargo operations of UPS and FedEx, which are operating out of Subic, have been the object of complaints from Philippine Airlines.
PAL has said UPS and FedEx have been undertaking seventh freedom operations, which is not provided in the 1980 RP-US Air Transport Agreement.
“FedEx and UPS continue to fly from the Philippines to a third country without first passing through the US, which is an exercise of seventh freedom privilege. This is illegal because they are not supposed to undertake such operations,” PAL stressed.
Joseph said granting seventh freedom rights to these American cargo carriers would violate the Constitution. “Unless the Charter is amended, the government cannot grant seventh freedom rights to these US cargo carriers,” he pointed out.
“We should not surrender our patrimony without reciprocal benefits to our country,” he emphasized.
He said he will not be surprised if the Senate conducts an investigation on the plan to declare cargo open skies in DMIA.
“We know the Senate is vigilant on matters that affect our sovereignty and patrimony. The plan could again be perceived as a scam by the senators,” Joseph said.
During the second round of talks between the Philippines and the US in July, the US panel proposed the granting of seventh freedom rights to the American cargo carriers operating in the country.
The US proposal was, however, rejected by the Philippine panel led by Transportation Undersecretary Edward Harun Pagunsan and cochaired by Foreign Affairs Undersecretary Franklin Ebdalin as this would violate the Constitution.
When the American negotiators consulted the US Embassy in Manila on the issue, embassy officials validated the RP panel’s position.
UPS Suite of New Technologies Promises Better Customer Service, Operating Efficiency
Tuesday September 23, 10:00 am ET
Latest Network Software Unveiled at UPS Technology Summit.
LOUISVILLE, Ky.--(BUSINESS WIRE)--Sept. 23, 2003--UPS (NYSE:UPS - News) today unveiled a dramatic new technology system that will improve customer service and provide greater internal efficiency, including simplification of work and training.
The suite of package flow technologies includes software, hardware and process changes. Together with the next-generation wireless computer for UPS drivers and cutting-edge wireless scanners worn by employees, the company's broad high-tech platform is expanding to deliver customized solutions for UPS customers and even more reliable service.
UPS expects breakthrough service enhancements as the new technologies are brought on line when full deployment in the U.S. is completed in 2005. These include the ability to handle unique or unusual delivery instructions to offer more customized time commitment and to allow customers to make in-transit changes on package deliveries. These flexibilities correspond to today's complex global supply chains that demand speed and frequent change.
"These technologies will lead to major advances in service and efficiency, not just incremental improvements," Chief Information Officer Ken Lacy said here during a special Technology Summit at the UPS Worldport hub in Louisville. "At UPS, technology is so closely interwoven with the business that it powers every service the company offers and every operation it performs."
Testing and initial deployment also suggest UPS can reduce the mileage driven by all of its delivery trucks by more than 100 million miles each year. That would save the company 14 million gallons of fuel and reduce CO2 emissions by 130,000 metric tons annually.
The foundation for the new system is the "smart label" affixed to packages moving through the UPS network. Remarkably, more than 90 percent of UPS customers generate these labels at their premises. Information from the label is transmitted to UPS before the package is even picked up by a driver. Consequently, address information on a package can be pre-processed and corrected if necessary before the physical arrival of the package at the sorting center, improving delivery operations.
Advance information also more completely automates two key processes: planning the daily delivery route and the process of actually loading each vehicle.
UPS employees loading trucks today must learn hundreds of addresses or ZIP codes for each delivery area. With the new software, training requirements are dramatically reduced as each package arrives with specific instructions on where it should be placed inside which delivery vehicle.
Using up-to-the-minute information, the UPS center can produce a dispatch plan for every UPS driver prior to any packages being handled by center employees. As a result, the driver's deliveries are known before the start of the loading process. Last-minute changes to a driver's load are minimized. The software also features advanced geographic tools that allow package center planners to analyze and adjust dispatch plans to further optimize delivery.
The driver's job is also simplified by enabling him or her to view all packages in delivery order, indicating exactly where the packages are loaded in the truck. This significantly reduces the time needed to select packages and the miles required to complete deliveries, which improves service and saves costs.
Critical information flows to the driver's wireless, handheld computer, now in its fourth generation. UPS revolutionized the industry with signature capture and tracking data in the late 1980's. It also alerts the driver as a delivery time commitment nears and warns if a package is scanned that isn't supposed to be delivered at the current stop. With easily accessible information, drivers have more time to engage with customers as they deliver all types of packages - air, ground and international - through the comprehensive integrated UPS delivery network.
"Developing this technology required years of work by thousands of skilled UPS technology and engineering professionals," Lacy added. "This technology ensures that UPS has unparalleled small package operations, giving UPS a distinct competitive advantage."
UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS), and the company can be found on the Web at UPS.com.
Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and slowdowns, increases in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.
UPS has a plan to make it easier, cheaper, and more efficient to handle deliveries
By Paul McDougall
In an effort to slash costs, United Parcel Service Inc. is spending $20 million to develop logistics software that will aggregate ZIP code information and map out how packages should be loaded onto trucks for the most efficient deliveries. The software, which is connected to a database containing customer and U.S. Postal Service information, will generate new shipping labels that include information a customer may forget to fill out, such as a ZIP code, and drive automatic sorting machines that will put packages on pallets in the most efficient order for loading.
The system is expected to reduce errors and cut the time it takes to train package handlers from months to weeks. "We'll realize significant, tangible savings," UPS CIO Ken Lacy says. With trucks loaded more precisely, UPS, which handles more than 13 million packages per day worldwide, also hopes to save as much as 14 million gallons of fuel per year by reducing the distances covered by its drivers by 100 million miles.
Lacy says the system will be fully deployed at all UPS facilities by 2005
Teamster Pension Fund Plans Deep Cuts
Alison Grant
Plain Dealer Reporter
11/22/03
The pension and insurance fund covering 380,000 active and retired Teamsters throughout the Midwest and South is making severe cuts in benefits, a move prompted by a "perfect storm" of bad economic forces.
The changes, along with other cuts announced by the Central States Fund, will undo a major attraction of truck driving for Roadway, Yellow, UPS and other carriers: the "30-and-out" guarantee of a pension of $3,000 a month after 30 years, no matter the retirement age.
"That's one of the reasons a lot of Teamsters stayed in this business, our early retirement," said Alex Adams, 52, a Yellow driver headed to New York last night.
The changes include:
For Teamsters who retire next year but are younger than 57, the cost of medical coverage will jump to $510 a month for individuals and $1,020 for couples. New retirees now pay $150 to $200 a month.
Starting in 2005, Teamsters who retire before age 57 will not be offered any medical coverage until they reach that age.
Teamsters who are already retired, now paying $150 to $200 a month for health coverage, will have that rate jump by $100 a month each year, beginning in January.
The way working Teamsters accumulate pension benefits will shift. Currently, they typically earn a $100 monthly increase in their pension for each year they work. In the future, they will accrue less and get penalized more for early retirement.
Active Teamsters covered by the fund will have annual deductibles doubled, and office visits, lab costs and prescriptions will go up for working and retired alike.
"Everybody's taking a pretty healthy hit," said Frank Burdell, president of Teamsters Local 407, which represents about 5,000 drivers in Greater Cleveland.
Union trustees of the fund posted a statement on the Teamsters Web site (www.teamster.org) saying they were notified of the rollbacks at a meeting Wednesday in Chicago.
"No one in attendance liked what was said at the meeting, but all came away recognizing that if something is not done immediately to stem the bleeding in the Funds, then the pensions and health care coverage will be devastated," they wrote.
Teamsters President James P. Hoffa also posted a statement.
"The perfect storm of a three-year fall in the stock market, historically low interest rates, accelerating health care costs and the bankruptcy of major fund employers like Consolidated Freightways was not predicted by anyone," Hoffa wrote. "But that is the reality we confront today."
The changes come a year or less into five- and six-year contracts for truck drivers, dockworkers and other Teamsters throughout the Central States region.
Ken Paff, national organizer for the dissident Teamsters for a Democratic Union, said members probably would not have approved those contracts had they known drastic pension and medical cuts were coming so soon.
IBT officials proposed cuts in secret talks with employers
Central States Fund Slashes Benefits
The Central States Fund trustees announced drastic cuts in our pensions and retiree health and welfare at an officers-only meeting on November 19.
IBT officials tried to claim that a judge ordered the fund to impose the cuts. But court documents exposed that the drastic cuts were proposed by our own union trustees–including two International Vice Presidents.
The court documents also revealed that union and employer trustees have been secretly meeting for almost a year to plan the benefit cuts.
Judge James B. Moran said “The Trustees have been working for much of 2003 to develop a package of prospective benefit reductions. The trustees appointed by the employers and the trustees appointed by the employees prepared and exchanged benefit reduction proposals.” (See Marshall v. Robbins, Case No. 1:78-cv-4075, doc. #1235. Available online at http://www.ilnd.uscourts.gov/racer2/index.html .)
Moran revealed that our own union trustees proposed all the cuts that have now gone into effect and asked that the employers contribute more money to the pension fund at a special board meeting on September 3.
Not surprisingly, the employers agreed to the pension cuts but refused to contribute more money.
The proposed cuts were then jointly presented to Judge Moran who approved the package and asked to be kept informed about the progress of negotiations over increased funding.
Hoffa Criticizes UPS Pension Grab
November 20, 2003
Mr. Michael Eskew
CEO and Chairman of the Board
UPS
55 Glenlake Parkway, N.E.
Atlanta, Georgia 30328
Dear Mr. Eskew:
UPS is lobbying on Capitol Hill for legislation that would make it more difficult for Teamster related pension funds to solve the current pension crisis created by the unprecedented fall in the stock market over the last three years.
The Teamsters and UPS have had an understanding, apparently up until UPS’ current course, that we would work together in the legislative arena where UPS and the Teamsters Union shared a common interest. One such interest, of course, is the continued viability and improvement of Teamster plans as well as all multi-employer plans. It is therefore difficult for me to understand why your lobbyists are working overtime to undermine legislation that would provide some relief for multi-employer pension funds that are facing problems. And, at the same time, push for legislation targeting only Teamster Plans. Worse, UPS informed the Union that the Company would not interfere with the relief package.
UPS’ attempt to undermine the legislation that would give our joint funds the option to suspend the amortization of recent investment losses is a direct attack on the pension security of our members at UPS and throughout the Teamsters Union. We highly resent what appears to be an effort to achieve legislatively what UPS was not able to achieve at the bargaining table.
Our members struck in 1997 to prevent the raiding of our pension and health and welfare funds. The members spoke loudly and clearly during our last negotiations that they would not stand for another attack on our Funds. The Teamsters Union does not intend to sit idly by as UPS attempts to use its political influence to push our funds into further crisis.
Sincerely,
James P. Hoffa
General President
The United Parcel Service is quietly rolling out a new low-cost service that will use the U.S. Postal Service to deliver packages to final destinations. Soon thousands of packages a day will be dumped into the U.S. Postal Service mail system for regular letter carriers to deliver.
The impact is expected to be greatest in low-density, rural areas where the cost to deliver is much higher. Consequently, local contract carriers may face a long season of holiday deliveries.
UPS, the world’s largest transportation company, calls the new program “UPS BASIC,” and it is hoping to bring back the business of mail-order merchants which it lost when the U.S. Postal Service began its Parcel Select program in 1999.
With USPS Parcel Select, large shippers (mail order companies like Eddie Bauer, for example) could use independent companies called “zone skippers” or “consolidators” to sort and then drop packages at U.S. Postal sub-stations in the areas near the packages’ final destination.
Under the system the mail-order business paid the consolidator to deliver a package.
The consolidator sorted, shipped and then dropped off the divided shipments at local post offices, paid the reduced Postal Service “Parcel Select” price and pocketed the difference. This meant the packages did not have to be sorted and shipped by the U.S. Postal Service from a point of origin to the final box. They would only be responsible for the final run from local post office to the individual mail box of a recipient. UPS lost a huge amount of business to USPS.
With the new service, UPS will itself act as a “zone skipper” or “consolidator.” It will charge a rate lower than even the U.S. Postal Service can offer. UPS picks up the shipments, sorts and transports them to distribution centers. Those going to densely populated areas are delivered by UPS. Rural area shipments will get dumped with the Postal Service.
FedEx is presently in the middle of testing a similar program of its own.
“This is a revenue opportunity and we accept it with open arms,” Ralph Petty, a spokesman from the Sacramento District Office of the U.S. Postal Service, said.
Another spokesman, Gerry McKiernan, said the Postal Service is working with both FedEx and UPS and expects the business to be profitable.
According to e-mails between U.S. Postal Service top brass, however, USPS was caught off-guard by the program and fears a huge loss of revenue as the Postal Service loses business with mail-order company giants. UPS has already landed several of the big players and is actively negotiating with others.
“This is a net loss of revenue and volume,” wrote postal executive Robert P. Fisher in the e-mail... “[this] is resulting in large, immediate revenue losses. We’ll get rural and anything that they can’t make money on.”
Some of the problems top officials with the International Brotherhood of Teamsters, which represents UPS workers, claim the new program violates Teamster contracts and Georgia UPS Teamsters filled grievances months ago when UPS conducted a limited trial run of the program in the state. Teamsters fear this is just a foot in the door and more UPS deliveries will be cut back, even in urban areas.
Another area to consider is that many people utilize UPS because of their excellent tracking system. The USPS doesn’t have a similar tracking system and package tracking could be lost once they arrive at the post office.
On a local level this could mean that rural contract mail carriers may be carrying a huge extra load of packages over the holidays. These men and women act as independent contractors with the U.S. Postal Service and have to bid for their contracts.
“We are the lowest paid in the post office. We get no benefits. No health. No retirement. Nothing but our check. We are worried that we will have to carry twice the load we normally expect over the holidays without receiving compensation. We don’t want to do it. If we’re paid for it, we’ll do it. We were never told about this before,” carrier Carol Derry said,
Oakhurst Postmaster Verlaine Elinburg said, “It is not sure this will go through. This is not set in concrete. The carriers don’t know that they won’t be compensated. There are forms to fill out for second trips. When I was the Coarsegold Postmaster we paid for second trips. We will deliver packages no matter what.”
According to Derry, when she contacted her transportation representative, Caesar Castaneda, he said it was a done deal and that the carriers had to carry the extra load.
And some carriers may just say “no.”
UPS uses Postal Service for deliveries
Monday, December 01, 2003
(LOUISVILLE, December 4th, 2003, 1:25 p.m.) -- A sharp cut in benefits handled by the Teamsters union has raised health care costs for full-time employees at the United Parcel Service air hub and affected their retirement plans.
The union's 180,000-member Central States division will drop the long-cherished pension policy that allowed members to retire after 25 or 30 years with guaranteed benefits, regardless of age.
Sharp increases in out-of-pocket costs for health benefits for new retirees younger than 62 will also make early retirement unaffordable, say critics of the benefit cuts.
"Your pension wouldn't even cover your medical," said Ken Paff, national organizer of Teamsters for a Democratic Union, a Detroit group that says it wants to reform the union.
UPS has 1,250 full-time hourly workers and 5,803 part-timers in the Louisville area. Most of the full-time Teamsters workers are covered by the Central States plan, which serves about 380,000 active and retired Teamsters. The part-timers are under insurance and retirement plans administered by UPS.
Part-time workers will not be affected by pension changes, but their health plans could be revised, said UPS spokesman Mark Giuffre.
The cuts were adopted after trustees representing the union and employers met to find ways to rescue the funds.
While the funds are administered independently from the national union, Teamsters President James Hoffa said they suffered under "the perfect storm of a three-year fall in the stock market, historically low interest rates, accelerating health care costs and the bankruptcy of major fund employers like Consolidated Freightways."
Some opponents of the decision aren't willing to see the cuts explained away.
The cuts "are destroying the early retirement plans that all Teamsters have fought hard to win," Paff said. "They are pricing the health insurance just astronomically out of the market."
He said union officials "misled hundreds of thousands of Teamsters. People are up in arms. They are looking for recourse. And they are going to fight until they get recourse, until we get this changed."
Full-Time UPS Workers Face Cuts In Union-Handled Benefits
Central States Fund Slashes Benefits
The Central States Fund trustees announced drastic cuts in our pensions and retiree health and welfare at an officers-only meeting on November 19.
(See details, pg. 2)
IBT officials tried to claim that a judge ordered the fund to impose the cuts. But court documents exposed that the drastic cuts were proposed by our own union trustees–including two International Vice Presidents.
The court documents also revealed that union and employer trustees have been secretly meeting for almost a year to plan the benefit cuts.
Judge James B. Moran said “The Trustees have been working for much of 2003 to develop a package of prospective benefit reductions. The trustees appointed by the employers and the trustees appointed by the
employees prepared and exchanged benefit reduction proposals.” (See Marshall v. Robbins, Case No. 1:78-cv-4075, doc. #1235. Available online at
http://www.ilnd.uscourts.gov/racer2/index.html.)
Moran revealed that our own union trustees proposed all the cuts that have now gone into effect and asked that the employers contribute more money to the pension fund at a special board meeting on September 3.
Not surprisingly, the employers agreed to the pension cuts but refused to contribute more money.
The proposed cuts were then jointly presented to Judge Moran who
approved the package and asked to be kept informed about the progress of negotiations over increased funding.
CENTRAL STATES PENSION IMPROVEMENT
COMMITTEE
CSPIC UPDATE #16
NOVEMBER 20, 2003
P.O. BOX 5657, SAVANNAH, GA 31414
WWW.NOPENSIONFREEZE.ORG
770-723-7217
Broken Promises on Benefits Callfor Rank and File Response
UPS, freight and carhaul Teamsters voted to approve five and six-year con-tracts after we were promised pension and health and welfare improvements.
For example, the Hoffa administration sent a bulletin to every Central States freight Teamster pledging that “The National Negotiating Committee has negoti-ated
enough money to at least maintain the current level of benefits in virtually all areas with the possibility of additional improvements in benefits in later years of
the contract."
We can’t let our top union officials promise us security to get us to approve long-term agreements and then break those very promises before we even get our
contract books. It’s time to stand up.
Central States Teamsters have been organizing and going to court to fight unfair reemployment rules that block early retirement. Recently we forced some
modest changes. (See page 2). Now, we need to build an even bigger movement against the pension and health and welfare cuts.
The right to vote gives us power and we need to use it. Our officials need to know that they either have to stand with us in the battle against the cuts or they will be out of office come election time.
What You Can Do
Information is power. That’s why officials were told at the officers-only meeting on November 19 to hold off on sharing any informa-tion on the cuts with members.
With our retirement benefits on the line, some officers are going along with keeping members in the
dark!
CSPIC and TDU are informing and uniting Teamsters at the grass-roots and building a movement to save our retirement benefits.
And we need your help! Here’s what you can do.
Spread the word: Make copies of this bulletin and pass it out to fellow Teamsters.
Order “No Cuts” stickers: Use “Hands Off Our Pensions!” stickers to spread our message.
Build a “No Cuts” meeting in your area.
We will be holding “No Cuts” meetings to inform
members and make action plans. Call the TDU office at 313-842-2600 to talk about how you can help build a meeting in your area.
Join TDU: TDU has backed CSPIC and the pension improvement movement with funds, legal assistance and organizational expertise. Your $40 annual TDU dues will help fuel this movement and it will keep you informed.
A Closer Look at the Cuts
Teamster members fought hard and sacrificed wage increases to win early retirement benefits. Now Central States trustees are implementing cuts
designed to make early retirement a thing of the past.
The attack on early retirement takes two forms: pension benefit cuts and increases in health and welfare cover-age for retirees.
Pension Cuts
The fund cuts the pension benefits that all members will accrue beginning January 1, 2004. The two percent
accrual rate for future benefits will be cut in half to one percent.
Teamsters retiring after January 1. 2004 can no longer count on the stan-dard 30-and-out at $3,000 pension
with $100 per year worked after 30. Instead they will get a smaller amount based on a complicated formula that counts years worked before January 1 and years worked after differently. It is against federal law (ERISA)
for the fund to reduce pension benefits
that you have already earned. So Teamsters who already have 30 years in, for example, will still get at least $3,000 a month when they retire.
Self contributions for layoffs, sick-ness, leaves of absence and strikes that begin after January 1, 2004, will be prohibited completely.
People who have already worked 30 years will see less impact, but mem-bers who still have years to go will be
hit harder.
In the fund's own example, some-one who retires nine years from now at age 59 with 30-and-out won't get
$3,000 a month, but $2,752.
Health and Welfare Cuts
The worst cuts are in medical cov-erage
for retired Teamsters. Those who retire after November 18, 2003, and are under 57, will have to pay $510
per month ($1,020 per couple) for health and welfare.
Those who retire after December 31, 2004 will not be eligible for any retiree coverage until age 57.
Those retiring over age 57 will pay an amount based on age at retirement.
For those already retired, monthly premiums for H&W will be increased $50 ($100 for couples) every year.
This is an enormous burden on retirees and will make early retirement difficult or impossible for many
Teamsters.
For working Teamsters, benefits in the C6 plan are cut across the board: the annual deductible is doubled;
office visits, lab costs, prescriptions, etc., are all going to be more costly for working and retired Teamsters alike.
Retirement Age H&W Cost
57 $255
58 $230
59 $205
60 $180
61 $155
62 $130
1 These figures will go up $50 per month every year.
2 These figures are for single cover-age.Double for spouse coverage.
Pension Movement Makes Gain
Reemployment Rule Liberalized
There is one small improvement amidst the attacks the trustees have hit Teamsters with: the reemployment rule, which prevents our retirees from supple-menting
their pension check, is being liberalized. But it is far from what members need and deserve.
Is it a coincidence that the only improvement is on the issue that our pension movement has been the most active and involved in? Not likely. Our movement won this improvement - with rank and file Teamster unity.
The main change is for retirees over 60 years old, who can work outside “core Teamster industries” which are trucking, warehousing, food processing and distribution. The rules remain complicated and subject to interpretation by the trustees.
The chart of the new rules is available from TDU and at www.tdu.org. The Pension Improvement Committee will continue to support the lawsuit in the Court of Appeals, and will continue to build the movement to win pension justice.
Order ‚No Cuts™ Stickers Today
Order stickers at our website
www.nopensionfreeze.org or call
TDU at 313-842-2600.
4 stickers for $1
50 stickers for $8
500 stickers for $75
Congress to Weigh Easing U.P.S. Role on Pension Funds
By MARY WILLIAMS WALSH
Published: December 16, 2003
ongress is expected to consider a proposal early next year that would shift responsibility for billions of dollars in future pension promises to the federal government from United Parcel Service.
U.P.S. is chafing at its legal requirement to cover retirees of other companies through its participation in multiemployer plans, in which many employers pool the cost of providing pensions for union members. While the prospects for the proposal are unclear, U.P.S. has gained support from several lawmakers, including some in Georgia, Kentucky and Ohio.
These plans allow workers to take their benefits with them when they switch jobs and are common in such fields as grocery stores, bakeries, machine shops and construction. About 35 million Americans are covered by traditional pension plans paid for by a single company, and about 9.5 million people participate in these multiemployer plans.
When one company in such a plan goes out of business, the surviving companies have to make good on its pension promises. In trucking, many companies have disappeared since the industry was deregulated in 1980.
U.P.S. is the largest company in the pension plans of the International Brotherhood of Teamsters, with potential responsibility for billions of dollars of obligations to its retirees.
"We have serious concerns over the financial condition of these plans," said David Bolger, a spokesman for U.P.S.
The company says it remains willing to pay for its own employees' pensions and even for the obligations it has already assumed from other companies. But it wants to make each company solely responsible for its own workers' benefits in the future. If a company defaults, those obligations would then go to the federal government.
Though it seems odd for U.P.S. to have to pay the pensions of its weaker competitors, the consequences of its legislative proposal could be stark. Some participants in the Teamster plans could find their pensions sharply reduced if their companies grow short of cash; the multiemployer pension model could fade away; and the struggling government agency that insures pensions could wind up shouldering even more debt. The Teamsters' president, James P. Hoffa, has accused U.P.S. of trying to persuade Congress to give it a labor concession the union already beat back.
U.P.S. has found political support from leading congressmen in Georgia, Ohio and Kentucky, where it is a big employer, and says it is trying to encourage thoughtful debate about a financial problem, not derail a popular pension plan.
Last year, Mr. Bolger said, U.P.S. contributed a little more than $1 billion to 32 regional Teamster plans, more than $8,000 for every covered U.P.S. employee.
The company declined to specify how much debt is involved in those plans, but the biggest one, the Central States pension fund, owed $31 billion to about 460,000 workers and retirees at the end of 2002. It had just $18.5 billion in assets. U.P.S., which had $31 billion in sales last year, is the fourth-largest employer in the private sector in the United States, trailing Wal-Mart, General Motors and McDonald's.
Bills to amend the pension laws as outlined by U.P.S., a step called partitioning, were introduced in the House and Senate this year. Before adjourning this month, the Senate agreed to make pension legislation — including multiemployer issues — one of its first items of business when it reconvenes in January.
Partitioning the Teamster plans could ultimately mean some of the union's members, working at shaky companies, could lose part of their benefits. The government insures pensions in case an employer defaults, but its coverage is limited, and the limits for multiemployer pensions are exceptionally low — just $12,900 a year for a worker who is 65 when his or her pension plan fails.
That is well below the $36,000 pension a Teamster now earns by retiring at age 65 after 30 years of service. The government guarantees pensions up to about $44,000 a year when a single-employer plan fails.
Some pension specialists worry that if U.P.S. succeeds with the Teamster plans, it could provide a blueprint for other companies looking to escape pooled pension obligations, in other industries where a few large, successful companies subsidize many small, weak ones. That could doom the multiemployer model, which has been a fixture of the union workplace since the end of World War II.
This type of plan allows small businesses to offer pensions that they might not be able to afford on their own. It also weathers financial shocks and recessions better than single-employer plans, because the ups and downs of the participating companies often offset each other.
Partitioning the Teamster plans would thus add to the woes of the Pension Benefit Guaranty Corporation, the agency that provides pension insurance. These plans have posed little problem for the agency until now. In its 28-year existence the agency has taken over 3,122 single-employer pension plans, but has had to rescue only 31 multiemployer plans.
Mr. Hoffa accused U.P.S. of mounting "a direct attack on the pension security of our members," in a letter to the company's chief executive, Michael Eskew, last month.
"The Teamsters Union does not intend to sit idly by as U.P.S. attempts to use its political influence to push our funds into further crisis," Mr. Hoffa warned. The union has been pushing for a different change in the pension laws, to allow multiemployer plans more time to make up for their recent stock market losses. Teamster officials declined to be interviewed about pension matters.
Norman Black, a spokesman for U.P.S., says the company is not trying to kill this type of plan or challenge the union.
"Our concern is making changes to ensure that these plans don't get into any more trouble," he said. "It's not meant as some assault on multiemployer plans or on the Teamsters. We just want to make these things stand tall without going under."
Among other measures, U.P.S. is suggesting that new rules be imposed so that plan trustees could not promise greater benefits to workers if the plan assets fall below a certain level.
This is not the first time U.P.S. has tangled with the Teamsters over pensions. During contract negotiations in 1997, U.P.S. proposed paying its obligations and pulling out of the Teamster plans, so it could set up its own single-employer pension fund for the 120,000 Teamsters on its payroll. U.P.S. promised it would treat these Teamsters well, sweetening their benefits. But the union rejected that idea — then sweetened the benefits of all 460,000 Teamsters in the Central States plan to the level U.P.S. had intended to give its own employees, company officials say.
U.P.S. says that it has almost no control over the level of benefits the plan pays, because benefits are set by each plan's board of trustees. The boards are evenly divided between Teamster officials and representatives of the various companies, but on the Central States board, U.P.S. has only one trustee out of 10.
"This is a situation that needs to be addressed," Mr. Bolger said. "We are the growth engine for the Teamsters. We're hiring people."
In November, the Central States plan reduced benefits, citing several years of investment losses and the inability of small, marginally profitable trucking companies to make pension contributions.
"The union is doing everything in its power to pressure the employers to increase contributions," the five Teamsters on the board said in a letter to the members. "The strongest resistance to increasing contributions is coming from some of the Teamsters' most powerful employers."
U.P.S. has quickly won support for its pension initiative in Washington. Bills were introduced in Congress by Representative Patrick Tiberi, Republican of Ohio, and Senator Saxby Chambliss, Republican of Georgia. U.P.S. is a leading employer in Ohio; its headquarters are in Atlanta.
In November, Senator Mitch McConnell, Republican of Kentucky, also made a show of support. U.P.S. operates a large sorting hub in Louisville and is one of Kentucky's largest employers.
Mr. McConnell is married to Elaine L. Chao, the secretary of labor, who is responsible for enforcing the federal labor laws, including the 1980 pension law that U.P.S. hopes to amend. She is also the ex oficio chairwoman of the pension agency, and has expressed concern about the insurer's deteriorating finances. At the moment, the only part of the agency showing a surplus is its multiemployer division. That surplus could vanish if the government had to rescue thousands of retired Teamsters.
A spokesman for Ms. Chao said she had not yet taken a position on the multiemployer pension issue, but was able as a matter of routine to separate her own policies from the positions taken by her husband.
Labor and pension advocates are distressed at how quickly U.P.S. has built support for its initiative.
"U.P.S. is a heavy hitter on the Hill," said Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans, an organization that represents such plans in Washington. "They give a lot of money, and that gets a lot of attention."
Federal Election Commission records show that U.P.S. had the nation's largest corporate political action committee in the last election cycle, with $4.7 million in receipts and $3.6 million in disbursements.
U.P.S. says it is not trying to avoid paying pensions. On the contrary, Mr. Bolger said, the company wants to protect its own employees' pensions, which are being diluted in the growing pool of overall Teamster benefits.
"We are trying to cover whatever we've negotiated in 2002," said Mr. Bolger, citing the year of the company's most recent labor contract. "But at the same time, we don't live in a vacuum. As part of a multiemployer plan, you have all these other companies that are going south."
The industry's demographics suggest that the situation will get worse. When the law governing multiemployer plans was enacted in 1980, there were four active Teamsters supporting every retiree, Mr. Bolger said. But the retirees now outnumber active workers.
Pension funds that have more retirees than active workers are difficult to sustain, because they can end up paying more each year in benefits than they receive in contributions from companies. The problem afflicts many multiemployer plans, either because the underlying industries have dwindled away, or because of shakeouts in which companies with union work forces have disappeared and been replaced by nonunion companies that did not join the pension plans.
Such companies have shunned the union pension plans, said Daniel F. McGinn, an actuary in Anaheim, Calif., who specializes in multiemployer plans. Since 1980, the law has required any company wishing to withdraw from a multiemployer plan to pay its share of any deficit. That has discouraged new companies from joining, Mr. McGinn said, cutting off the supply of younger workers who could generate money for the retirees' benefits.
The 1980 law is the one U.P.S. hopes to change.
"If they could separately account for their own workers, they'd be fully funded," Mr. McGinn said. "Every employer who feels that way is probably countered with one, two or three other employers in a dying industry."
UPS Ocean service expands to more than 70 ports
In a significant global expansion, UPS has extended its UPS Trade Direct(SM) Ocean service to more than 70 ports in Asia, Europe, Latin America, Africa and the Middle East, and added Miami as a US port of entry.
(5/18/2004)
The service allows customers to speed their merchandise directly into the UPS delivery system as soon as the goods clear customs, reducing the need for lengthy and costly warehouse stops before final US delivery.
Introduced less than two years ago with links between four ports in China and Brazil and New York and Los Angeles, UPS Trade Direct Ocean gradually expanded to 40 ports in 2003, and now is adding another 30 origin ports. Manufacturers in Asia, Europe and Latin America report the service is slashing as many as 20 days from the time it previously took to move product to market.
With UPS Trade Direct Ocean, goods bound for the United States are individually packaged, gathered at the origin port and labelled for US delivery by UPS – either before being placed into ocean containers or soon after entering the United States. UPS clears the packages through customs as one consolidated unit, and then separates the shipment for delivery via UPS’s small package or freight networks.
“UPS Trade Direct Ocean is part of a suite of products that builds on UPS’s expertise in both logistics and package delivery to synchronise commerce for our customers worldwide,” said Bob Stoffel, UPS senior vice president, Supply Chain Group. “Use of this service has grown because business companies increasingly realise the advantages of a streamlined supply chain.”
The 30 new origin ports in the latest expansion are located in: Japan, Indonesia, India, Argentina, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Puerto Rico, Uruguay and Venezuela. Miami joins New York and Los Angeles as a receiving port in the United States.
Bush Wins Mexican Truck Safety Case
By ANNE GEARAN Associated Press Writer
WASHINGTON (AP) - The Supreme Court ruled unanimously Monday that the Bush administration can skip a lengthy environmental study and open U.S. roadways to Mexican trucks as soon as it wishes.
The high court ruled against labor and environmental organizations that have long fought expansion of Mexican trucking within the borders of the United States despite a guarantee this country made when it signed the North American Free Trade Agreement more than a decade ago.
2004-06-07 14:25:55 GMT
Court: Retiree Pension Benefits Can't Be Cut
The U.S. Supreme Court ruled on Monday that pension plans under federal law cannot change their rules to reduce or eliminate benefits to workers who retire early and then go back to work at other jobs.
The justices unanimously upheld a U.S. appeals court ruling that a pension plan violated federal law when it suspended monthly pension benefits to two retired workers who had taken new jobs as construction supervisors.
At issue was the "anti-cutback" rule of federal pension law that generally bars plans from cutting or eliminating benefits. But another part of the law allows plans to suspend payments to those who are reemployed in specified circumstances.
Two former construction workers, Thomas Heinz and Richard Schmitt, retired with full pension benefits at age 39. The Illinois men drew their pensions for two years until their pension fund changed the rules governing who was eligible for the payments.
They both became construction supervisors when they retired from their original jobs in 1996. At the time, that meant they were still eligible for their pension benefits.
In 1998, however, the pension fund said it would no longer allow early retirement pension payments to people who began second careers in any kind of construction industry job. The fund suspended benefits to Heinz and Schmitt, who sued the Central Laborers' Pension Fund in federal court.
A federal judge ruled for the pension fund, but a U.S. appeals court disagreed. It said imposing new conditions on the rights to benefits already accrued violated the anti-cutback rule.
In the Supreme Court opinion, Justice David Souter agreed. He said federal retirement law prohibited a plan amendment expanding the categories of post-retirement employment that would trigger suspension of payment of early retirement benefits already accrued.
"We simply do not see how, in any practical sense, this change in terms" adopted by the pension plan in 1998 could not be viewed as shrinking the value of the pension rights of Heinz and Schmitt and reducing their promised benefits, Souter said.
He said the court's conclusion was confirmed by an Internal Revenue Service regulation that adopts the same interpretation of the 1974 retirement law.
FedEx driver dies in I-65 crash
TRANSPORTATION: Traffic near U.S. 30 is tied up for six hours.
BY DEBORAH LAVERTY
Times Staff Writer
This story ran on nwitimes.com on Friday, July 30, 2004 12:09 AM CDT
MERRILLVILLE -- An early morning accident Thursday on Interstate 65 near the U.S. 30 overpass that snarled rush- hour traffic claimed the life of a 61-year-old FedEx driver.
Robert Mangiarulo, of Braidwood, Ill., was pronounced dead at the scene due to head injuries he received in the accident, according to Indiana State Trooper Brian Kubiak.
The accident, which included the closure of northbound I-65 lanes for six hours, caused morning rush-hour delays, Merrillville Assistant Police Chief Joseph Petruch said. His department assisted State Police in detouring traffic to the U.S. 30 exit.
Steven Dill, 45, of Spartanburg, S.C., the driver of a 1996 Freightliner truck, and his 14-year-old son, Bret Dill, were transported by ambulance to The Methodist Hospitals Southlake Campus in Merrillville. They were treated for minor injuries and released, Kubiak said.
He said that police were called to the accident scene shortly before 6 a.m.
Kubiak said the accident apparently happened when the piggyback trailer of a United Parcel Service truck became detached and came to rest in traffic.
He said that Dill, after spotting the detached trailer, stopped and put his hazard lights on to warn drivers behind him.
Mangiarulo came up behind Dill and struck the rear of his truck, tearing it open. Mangiarulo then swerved before crashing into the median wall, Kubiak said.
The driver of the UPS truck, Kevin Armstrong, 36, of Indianapolis, turned at the 61st Avenue exit after noticing his trailer was missing. Armstrong then returned to the scene of the accident to talk to police, Kubiak said.
No citations were issued.
Con-Way Truckload hits the road
The first of ten Con-Way Truckload (CTL) driver teams to officially haul freight for the new company will leave Memphis today on a 36-hour drive to Blythe, California.
(1/18/2005)
Last June, Con-Way Transportation Services, a subsidiary of CNF Inc, announced that its newest company, Con-Way Truckload, would begin operations in the first quarter of 2005. Since the June announcement, the Memphis-based company has purchased 46 new Volvo model VN670 over-the-road tractors and 115 new 53-foot trailers, and has hired and trained 23 two-person driver teams, as well as management and operating staff.
Initially, the new truckload carrier's only customers will be Con-Way's three regional LTL companies, Con-Way Central Express, Con-Way Southern Express and Con-Way Western Express. CTL will provide linehaul service on full loads of LTL shipments moving in transcontinental traffic lanes.
“We expect the use of Con-Way Truckload will generate savings on LTL linehaul costs, but our primary focus is to ensure our LTL service standards in these longhaul lanes are met,” said Douglas Stotlar, president & CEO of Con-Way. “The CTL operations will operate in tandem with our current truckload vendors, giving us more assurance of truckload capacity in the tight truckload market that currently exists.”
In its first two years of operation, the company plans to add approximately 450 new jobs to Con-Way's existing workforce of more than 19,500 employees. All drivers are company employees with contract drivers utilised as needed. As CTL builds its fleet capacity, it will eventually be able to provide truckload service directly to the shipping public.
According to Clay Halla, president of CTL: “We will begin operations with several advantages a normal startup operation would not have. Three very big customers, 'no touch loads' for our drivers, existing Con-Way service centres, maintenance shops, professional mechanics and security personnel, in addition to existing administrative support services.”
Since 1998 the Con-Way regional LTL carriers have employed truckload carriers to provide transcontinental linehaul service. According to company officials, the new operation will focus on absorbing the growth in the long- haul portion of the LTL operations, which is currently above 10% annually. “We are a major customer to a select number of very good truckload carriers who we will continue to work with in 2005,” said Halla.
UPS orders 800 trucks worth $5.6 million from two Ontario manufacturers
Canadian Press
Wednesday, June 08, 2005
CHATHAM, Ont. (CP) - Courier company United Parcel Service of America Inc. has selected two southwestern Ontario truckmakers to produce more than 800 trucks for its distinctive brown-painted fleet in a deal worth $5.6 million.
International Truck and Engine Corp. of Chatham and Sterling Truck Corp. in St. Thomas will produce the trucks to beef up the UPS fleet across the United States, the U.S.-based company said Wednesday.
Production of 500 International 9200 trucks will begin this week at International Truck, a subsidiary of U.S.-based Navistar International Corp., and is expected to be completed in August. Sterling, owned by DaimlerChrysler Corp. subsidiary Freightliner, will produce 335 Sterling A9513 trucks.
"Chatham and St. Thomas were chosen as the locations for production because of the quality reputations maintained by International Truck and Engine Corp. and Sterling Truck Corp.," UPS Canada vice-president Chris Yates said in a release.
"Both companies stand by their commitment to a high-quality product; a common philosophy we share at UPS."
UPS is the world's largest package delivery company employing more than 7,400 people in Canada and 384,000 worldwide.
UPS expands technology to improve inbound visibility
UPS has unveiled a technology enhancement that automatically notifies customers of every package in the UPS system moving toward them.
(7/6/2005)
The software technology – called UPS Quantum ViewSM Inbound – opens a new ‘window’ into the UPS system, and represents the most recent addition to the UPS Quantum ViewSM suite of visibility services.
Quantum View Inbound provides proactive notification of UPS air express, ground and international packages that are en route to the receiver's location. The technology helps businesses better prepare for delivery activities in such areas as staffing, accounting, stocking and customer service.
In addition to Quantum View's ability to match to addresses written in different ways, it also recognises variations in business names such as UPS and UPS, Inc. This feature sets the system apart from other address matching technologies. Once this information is filtered and matched to the recipient, the customer is then able to see inbound shipments to their address or another designated location.
“The ability to see what shipments are scheduled to arrive is extremely useful to businesses because it enables them to make educated decisions about workforce and inventory planning,” said Jordan Colletta, UPS vice president of e-commerce marketing. “Prior to Quantum View Inbound, visibility of incoming packages had eluded transportation managers, but we're confident UPS has cracked the code with its powerful address matching system.”
UPS breaches pilot contract, claims IPA
The Independent Pilots Association says that, after months of deception, UPS has finally admitted that it will breach its pilot's contract by failing to deliver the flying from the Menlo acquisition on December 19, 2005, as promised. Under the company's new timetable, integration of Menlo flying into the UPS network will not occur until July 17, 2006.
(10/5/2005)
“This is not a matter of a company trying in good faith, but simply failing to meet a contractual deadline,” said IPA president, Capt. Tom Nicholson. “For months, we have received nothing but assurances from UPS that the transition of Menlo flying was on schedule.” He added that UPS only admitted breaching the contract after the IPA obtained third party confirmation that UPS had awarded aviation subcontracts to cover Menlo flying well into 2006.
The IPA has been meeting with UPS on a regular basis since it announced the purchase of Menlo nine months ago. At all of these meetings, the IPA has been assured by UPS Labour that Menlo integration was on track and that IPA Crewmembers would be taking over the Menlo flying in December. UPS Labour is the same group currently negotiating a new contract with the IPA.
“It is insulting to think that while UPS was making these assurances to us, they were cancelling Airbus A-300 orders and negotiating the Scope clause of our new contract. All the while, they knew they were setting us up for a massive contract breach,” said Capt. Nicholson.
He added that UPS’s timing could not be worse. “This month, we will enter our fourth year of contract talks, our union is in the middle of leadership elections, and we are on the eve of the Christmas shipping season. This is the wrong kind of news to be delivering just before the most critical quarter of operations.”
The impact of UPS's decision to outsource IPA contract protected work to a patchwork of carriers for the next seven months means the loss of a significant amount of new IPA flying.
“It would be one thing if the Menlo Scope breach were an isolated issue,” said Nicholson. “But, when you consider that UPS currently outsources six weekly flights to China Air to move computer parts from Asia to Nashville for Dell, and its current negotiating proposals on Scope, it becomes systemic.”
UPS adds Seattle mail processing centre
UPS Mail Innovations, the business mail services unit of UPS, has expanded its reach across the United States and into the Northwest with the addition of a mail processing centre in Seattle.
(10/5/2005)
The facility is the twelfth for UPS Mail Innovations, and will provide business customers with an economical alternative for sorting, processing and sending mail within the US or around the world.
UPS Mail Innovations covers pick-up, sorting, processing and transporting of certain types of mail directly to the US Postal Service (USPS) or the foreign postal authority nearest to the final destination. The postal authorities then complete the final deliveries.
Participating in work-share programs with postal authorities, including the USPS, enables UPS Mail Innovations to offer its customers lower postal rates with a delivery time of First Class plus one day.
“Expanding the accessibility of our services is a direct response to the growing needs of our customers in the Northwest region,” said Jerry Kohnke, vice president & general manager of UPS Mail Innovations. “With rising transportation costs and postage increases looming, more businesses are seeking ways to cut costs. We are committed to helping our customers achieve the most effective and efficient mail delivery possible.”
UPS orders 10 Airbus A380 Freighters
Deliveries to UPS are scheduled between 2009 and 2012. The company has not yet made its engine selection.
“The A380’s strength as a freighter in the global market is reinforced by this order from UPS," said Gustav Humbert, president & CEO of Airbus.
The UPS A380F will carry a freight load of 330,000 pounds on three decks, with a cargo volume capacity of 40,000 cubic feet, a distance of some 5,600 nautical miles.
UPS took delivery of its first Airbus aircraft in 2000. The airline currently flies a fleet of 47 A300 Freighters.
UPS is the third US-based customer for the A380. Including the UPS deal, there are 159 firm orders for A380s from sixteen customers - including 27 freighter orders. The first A380 freighter is scheduled for delivery in 2008.
