Tag: UPS

United Parcel Service will rely on service rather than price cuts to counter competition for ground shipments, Chief Executive Officer Michael Eskew said.

“We don’t think price is the only value proposition here,” Eskew said in an interview with Bloomberg News. “Service is the real differentiator when it comes to some of that competition. With service and technology and our people, we think we’ll stack up real well.”

It’s 6 a.m., and UPS package loader Shane Picklesimer is popping in and out of the company’s brown delivery vans like a prairie dog.

Humming conveyor belts push a seemingly endless cascade of boxes and envelopes toward Picklesimer as he and 130 co-workers at the UPS package center in Roswell struggle to keep up. Within an hour, about 185 trucks will roll out of the building on routes that will take them throughout Atlanta’s northern suburbs.

It’s heavy, gritty, physical labor that seems virtually unchanged from the way Teamsters went about their jobs a decade ago, or even a generation ago. But these UPS workers are at the forefront of a productivity surge that helps explain why the U.S. economy has been growing steadily in recent months while shedding jobs.

Productivity is the measure of how much is produced per worker per hour. The more efficient a company — or the economy as a whole — the fewer hours needed to churn out a product.

It has both a shiny upside and a rough, dark downer.

Economists are fond of saying that, in the long run, the nation’s standard of living depends on productivity growth. But it is the short run that worries working people — the idea that efficiency lets companies shun hiring.

Yet productivity gains can also be good news for those who are on the payroll because they can make the business healthier.

On this morning, Picklesimer will load five UPS delivery vans by himself — he used to load three during each morning shift a year ago. The difference, he says, is a computer system that tells loaders where to put each parcel on each truck so that they can be delivered in an exact sequence.

“When I started working here, it took me six months to learn all the addresses on each route so that I could load all the packages in the right order,” said Picklesimer, 29. “The new system takes about half an hour to learn. A new hire can load trucks on his first day.”

Picklesimer earns $10 an hour during shifts that begin weekdays at 3:40 a.m. and end at 8:30 a.m. He isn’t paid any more for loading the additional trucks. But he says he doesn’t mind the extra hefting because the new method is so much simpler to understand and less prone to errors.

“The new system takes away a lot of the stress from the job,” he said. “I can do more work and actually have a better day.”

That feeling isn’t shared by all UPS employees, or by workers in other industries who have found that demands for greater productivity bring longer work hours and greater demands without corresponding pay increases. But a look at two Atlanta companies — traditional UPS, the world’s largest delivery firm, and SecureWare, a 65-employee Internet company — reveals some of the ways U.S. businesses are doing more with fewer workers.

Using technology

At street level, the daily operations of the 96-year-old delivery firm seem remarkably consistent.

Brown-shirted drivers steer the same boxy trucks as their predecessors, and they work about the same number of hours in a typical shift.

“You can’t drive any faster, and you can’t work any harder than our drivers already work,” said Cal Darden, UPS senior vice president for U.S. operations. “But you can use technology to dramatically increase your efficiency — and that’s what we’re doing.”

At the UPS hub in Roswell, the process starts about 11 each night when dispatchers plan the next day’s deliveries using computer programs that optimize the loads for all 185 delivery trucks. The system also prints labels that show loaders where to place each package by truck, shelf and order.

“The label says a package is going to the fourth car, on this shelf and in this position,” Darden said. “We’ve taken the skill out of the job. We’re using fewer people to load the same number of cars.”

Dispatchers “balance” loads between cars so that each one has about 120 stops during the day. If one route is particularly heavy, overloaded vans show up in red on computer terminals so