UPS Corporate Account Programs

1
UPS Corporate Account Programs

• Corporate programs are
• critical to both UPS our stores growth
• a tool UPS could use to create a real store
  partnership
• Today UPS Corporate programs
• are a major negative in the UPS franchise
  relationship
• place little value on our investment in people,
  equipment, facilities or our commitment to the
  franchise
• represent a predatory environment where UPS
  receives all rewards and store profitability is
  virtually ignored

The continuing drop in customer count, as UPS
absorbs customers, is a true indicator of UPS
Corporate programs effect on The UPS Stores.
2
UPS Corporate Retail Solution

• Improving UPS profitability by shifting costs to
  The UPS Store

3
4,200 The UPS Store locations allow UPS to pursue
its Logistics Strategy at what cost to the
franchisee??
The program goal is to encourage Toshiba
customers to to use The UPS Stores to have their
laptops professionally packed and
shipped Reality is that UPS logistics repairs
all Toshiba laptops. And while The UPS Stores
may pack and ship the customers laptops they are
not paid for their efforts.

• 12.92 CRS Revenue
• 8.32 Materials
• 2.33 Labor (10 min)
• 0.10 iShip Fee
• 1.10 Royalty (8.5)
• 1.07 before fixed/variable cost

4
4,200 The UPS Store locations allow UPS to
capture new accounts what does UPS provide the
franchisee in return??

• 5.00 CRS Revenue
• 0.63 Materials
• 2.33 Labor (10 min)
• 0.10 iShip Fee
• 0.43 Royalty (8.5)
• 1.54 before fixed/variable cost

The program goal is to bring T-Mobile customers
to The UPS Stores to return their phones for
repair. Reality is that UPS used our 4,200
locations to win a new account from DHL. What do
The UPS Stores receive for helping in this new
account win?
5
UPS Major Accounts

• Using your own resources to insure that Small
  Office Home Office (SOHO) customers dont ship
  with you.

6
Sold or Sold-out?
This countries largest group of independent
realtors no longer ship at your store but they do
get 10 off your services.
UPS provides every Re/Max employee shipping rates
you cant match. Those new UPS customers now
drop their package at your store and get 10 off
your services. Result UPS is using our own store
investment to win customers away from us.
7
UPS offers millions of people discounted shipping
AND a 10 discount on The UPS Store services.
Every study says that the small office and home
office customer is key for this franchise to not
just prosper but to survive. UPS strategy for
the small office and home office customer is to
improve their own margins by cutting out the
middle-man you. Result UPS is forcing you
out of the shipping business and into other
profit centers to survive. All while using your
new profit centers to gain new UPS customers!
8
The other shoe falls

• Alternate Delivery Location (ADL)

9
ADL

• The ADL service allows companies to ship their
  product to a secure and attended location for
  customer pickup. This program will be a key
  component of the CRS initiatives that will bring
  more customers and volume into The UPS Store .
  For every ADL package picked up by the customer,
  you will be reimbursed. The amount varies per CRS
  arrangement.

10
Average ADL transactions will take between 8-15
minutes from start to finish. Packages can stay
at your location up to 7 days.

• The employees will be responsible for logging
  into the system each morning, documenting when
  the package arrives at their store, when the
  customer picks up the package, and if necessary,
  when it is returned back to the shipper. Your
  store will be paid for these transactions by
  processing the CRS Work Order associated with the
  program.
• Change Package Status to Available for Pick-Up
• Note You must complete this status change in the
  online tracking system within the first two hours
  after the driver delivers the package.
• Update Package Status
• The employee accepting delivery of the package
  from the UPS driver must type in his/her first
  and last name.
• Customer Calls Store To See if Package is
  Available
• The CRS client will instruct the customer to
  check with The UPS Store they selected for the
  delivery status.
• Complete the Update Package Status to Picked Up
  screen
• Type the customer identification information into
  the Customer ID field. If a person other than
  the customer listed on the package attempts to
  pick up the package, follow these steps
• Print two copies of the customer receipt Ask the
  customer to sign and date the receipt
• Keep the signed receipt for your files You will
  need this receipt when you complete the Work
  Order
• Completing The Work Order For ADL Packages
• For every ADL package picked up by the customer,
  you will be reimbursed. The amount varies per CRS
  arrangement. For this transaction to be credited
  to your store, you must complete the CRS Work
  Order in the POS by the close of day.

11
ADL

• Store profitability is not a consideration for
  ADL.
• As with the BIN programs, driving customers and
  volume into the stores can be the sole
  justification for ADL pricing.
• ADL is a unilateral UPS decision.
• Your representatives at PACE, FAC, MAC have no
  input on ADL and UPS control of the UFOC forces
  your participation.
• ADL is a UPS double win strategy
• UPS wins new customers with no capital expense
• UPS reduces their exposure to teamster labor

12
ADL doesn't not work without you.
ADL cant be successful using ASOs Brand is
important to ADL success UPS is selling trust,
you are part of the brand ASOs are not UPS
can not dictate or change terms at will
(UFOC) ASOs offer competing products (FedEx
DHL) ADL cant be successful using UPS
terminals To few locations limited
hours Union labor costs Terminal expansion
costs Unsatisfactory customer retail experiences
You deserve fair compensation.
13
ADL

• will bring more customers and volume into The
  UPS Store
• Whos customers?
• Re/Max, T-Mobile, Toshiba, Dell, etc. are UPS
  customers not ours.
• What volumes?
• What are UPS plans for QVC, HSN, Dell and other
  consumer companies?
• At what cost to The UPS Store?
• UPS has yet to demonstrate a willingness to
  truly share with The UPS Store
• Who has seen the financial plan?
• UPS does nothing without a financial plan
• If its good for the network show PACE

14
UPS Corporate Account Programs

• What can you do?
• Join the www.TheBrownBoard.Com.
• The vast majority of BrownBoard members are just
  like you struggling small business owners
  committed to their store.
• All we ask is to be treated fairly.
• Write your PACE FAC rep a letter.
• Tell your PACE rep that you need a profit, not
  just a promise of customer volume.
• Your reps need to know you care and support their
  efforts.
• Vote for FAC, MAC, PACE and Co-Op candidates that
  belong to The BrownBoard.