Tag: UPS

Franchisees: UPS needs a better return policy

Posted by | May 26, 2008 | |

For many small business owners, franchising sounds like the perfect option–it allows you to own and operate a business while having the support of a well-established brand behind you. Yet, there is a darker side to franchising, one that often gets lost in years of court appeals and settlements. If you are looking to franchise, it’s important to pay attention to the fine print.

A David and Goliath battle between United Parcel Service and its franchisees recently turned into a win for the small business owners. In a case that has been going on since 2002, the former franchisees of Mail Boxes Etc. are suing UPS for contract and franchise agreement violations; saying the shipping giant failed them when it forced them to convert to UPS stores or to go private.

UPS bought Mail Boxes Etc., then a chain of 4,300 packing and shipping centers, in 2001 in an all-cash transaction for USD 191.0 million. Its previous owner, U.S. Office Products, had declared bankruptcy.

The California Appellate Court said on Friday that it would reverse the previous decision that was in UPS’s favor. The decision requires that the two parties now face each other in front of a jury.

“The Court of Appeals gave us a total victory. The court reversed every single claim that UPS/MBE made, and awarded costs on appeal to the plaintiffs. This is a complete repudiation of UPS’ and MBE’s position and was the last major hurdle for us,” said Howard Spanier, a former franchisee of Mail Boxes Etc. “UPS blocked my renewal as an Mail Boxes Etc. despite my franchise agreement allowing me to do so. They would only allow me to renew as a UPS Store. I considered that option to be financial suicide, since under the UPS Store business model profit is totally controlled by UPS.”

UPS’s annual revenues went from USD 29.7 billion in 2000, just prior to the acquisition of Mail Boxes Etc., to USD 49.7 billion in 2007. There are currently 4,647 UPS Stores worldwide and 1,306 Mail Boxes Etc. stores.

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Philippines to ask UPS to retain some operations after moving hub

Posted by | May 22, 2008 | |

The Philippine government will ask United Parcel Service Inc. (UPS) to retain some operations in the country after the U.S. logistics giant announced it was relocating to southern China, President Gloria Arroyo’s spokeswoman said Thursday.

UPS on Wednesday announced the planned transfer of its hub to a more centrally located USD 180-million facility to be built at Shenzen airport.

It said the move would place UPS closer to the center of the region’s economic activity and would improve customer service by reducing transit times across Asia.

The announcement represents a blow to the Philippines, which also faces a possible exit by Intel Corp., the world’s top chipmaker, from its second offshore assembly operations center in Asia.

Arroyo spokesman Lorelei Fajardo told reporters that the authorities at the Clark airport, where UPS had built its USD 300-million intra-Asia hub in 2002, were in talks with the U.S. company’s representatives to explore alternatives to its planned downsizing.

UPS said on Wednesday that it was “exploring placing alternative operations” at its Clark hub, located north of Manila, which it said would “continue to be a strategic location for UPS’s multi-hub network in Asia.”

Staff and flights would be reduced, company officials said, but they didn’t elaborate on the other alternatives.

Fajardo said the Clark International Airport Authority asked UPS to reorient the facility to provide systems patterned after its facilities in Louisville, Kentucky.

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UPS to lay off staff and restructure in Spain

Posted by | May 22, 2008 | |

UPS is planning to restructure its operations in Spain affecting 230 of the company’s 1,300 employees in the country, with the main outcome expected to be the closure of its Vallecas storage centre in Madrid, according to the Spanish newspaper Expansión.
UPS made a net loss of euro 890,000 on turnover of euro 169 million in Spain last year, the business newspaper wrote.

The restructuring aims at bringing UPS’ operations across several sites on to its installations in the district of Coslada in Madrid, which has recently been expanded.

The Vallecas storage center to be closed down has a workforce of around 180. In view of the expected layoffs, UPS Spain offered union representatives negotiations on the issues of early retirement and transfer to the facility in Coslada.

In total, UPS’ Spanish network has 140 customer service centres, 19 distribution centres, five logistics centres and 700 vehicles, according to the newspaper.

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UPS chooses Shenzhen for new Intra-Asia Air Hub

Posted by | May 21, 2008 | |

UPS is moving its intra-Asia air hub from the Philippines to Shenzhen in China’s thriving Pearl River Delta to improve customer service by reducing transit times across Asia.

UPS will base the new intra-Asia hub at the Shenzhen Airport in southern China, near Hong Kong. The repositioning will slash at least a day off shipment times-in-transit for Asian customers while offering a new level of service to the manufacturing region located just north of Shenzhen. The new cost-efficient hub will be operational in 2010 and represents an estimated investment of US$180 million.

Currently, the markets of China, Hong Kong, Japan, Korea and Taiwan account for more than half of UPS’s total intra-Asia volume.
In 2007, UPS signed an agreement with the Shanghai Airport Group to establish a UPS International Air Hub at Pudong International Airport in Shanghai. When it opens in November, the Shanghai hub will connect China to the UPS global air network, including U.S. and European destinations. It thus will play a substantially different role than the hub in Shenzhen, which will connect all major Asian points.

The Shenzhen hub, expected to total about 89,000 square meters in size (almost 1 million square feet), will include an express customs handling unit, sorting facilities, cargo handling and cargo build-up areas and ramp handling operations. It will be capable initially of processing up to 18,000 pieces per hour – compared to the existing 7,500 pieces per hour in the Philippines – but can be easily expanded to a capacity of 36,000 pieces per hour. It will employ about 400 people.

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UPS to lay off staff and restructure in Spain

Posted by | May 20, 2008 | |

UPS is planning to restructure its operations in Spain affecting 230 employees. UPS Spain has 1,300 employees, with the main outcome expected to be the closure of its Vallecas storage centre in Madrid, according to the Spanish newspaper Expansión.

UPS made a net loss of EUR 890,000 on turnover of EUR 169 million in Spain last year, the business newspaper wrote.

The restructuring aims at bringing UPS’ operations across several sites on to its installations in the district of Coslada in Madrid, which has recently been expanded.

The Vallecas storage center to be closed down has a workforce of around 180. In view of the expected layoffs, UPS Spain offered union representatives negotiations on the issues of early retirement and transfer to the facility in Coslada.

In total, UPS’ Spanish network has 140 customer service centres, 19 distribution centres, five logistics centres and 700 vehicles, according to the newspaper.

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