Originally created 09/06/97

UPS struggles to recover



ATLANTA - Beset by backlogs, frustrated customers and worker defections, United Parcel Service is still struggling to rebound more than two weeks after its first nationwide strike.

The company has reinstated its service guarantees, but acknowledged in a statement to customers Friday that "there continue to be some delays."

"It's been a challenge," UPS spokesman Mark Dickens said.

The 15-day walkout by the Teamsters union, with 185,000 UPS members, crippled the delivery giant, and company officials say daily operations still haven't caught up. Competitors such as Federal Express Corp. and the U.S. Postal Service say they've added business as a result of the UPS strike, and the company estimates it has lost at least 5 percent of its customer base.

But company officials say it's still too soon to know for sure, as UPS clears backlogs.

Tens of millions of packages were stockpiled by customers who either decided to wait out the strike or couldn't line up alternative shippers, added to millions bogged down in the system by the strike.

An extremely high number of pickups, hitting 16 million a day, "created a domino effect" in UPS' normal operations after the strike, Dickens said. Before the strike, the company averaged 12 million deliveries a day.

This week, deliveries are beginning to outnumber pickups, with 11.2 million pickups and 13 million deliveries Wednesday.

UPS officials, who estimated at least $600 million in lost revenues during the strike, have said a 5 percent permanent loss in volume would trigger 15,500 layoffs. Dickens said Friday it's too soon to know how many layoffs there could be, and acknowledged some former strikers hadn't been called back to work.

A Teamsters spokesman Friday said some members were complaining about "a real sour grapes, vindictive attitude" by UPS managers.

"They have a huge backlog, and yet they haven't called everybody back," said Rand Wilson, a union spokesman in Washington.

"We've always felt that the layoffs was a bogus threat, but it won't be if the company doesn't get back to business," Wilson said.

Dickens said the numbers of employees called back varies depending on volumes in different locations. In some places, former strikers are working overtime and the company is even hiring to replace part-time workers who moved on to other jobs during the strike.

"Mainly, we think (the workers) couldn't hold out. They needed a weekly paycheck," said Mike Lord, a UPS quality manager in northern Illinois. He said some 300 workers at the Rockford, Ill., sorting hub didn't return after the strike.

Anxious customers, some calling several times a day, have also flooded UPS phone lines to check on the status of pickups and deliveries. UPS also has paperwork backlogs.

Dickens said some customers have informed UPS of plans to shift at least some business to other carriers, diversifying shipments so they won't be as dependent on UPS in the future.

U.S. Postal Service and FedEx spokesmen said Friday it's too early to give numbers, but that both have added new business since the strike and that could increase after existing UPS contracts expire.

"They've certainly prepared alternatives, and some have diversified their business," said David D'Onofrio of Washington-based National Small Business United, which represents some 65,000 small businesses.

But he added that as UPS has begun returning to normal operations, most small businesses are sticking with UPS as "the most cost-effective and reliable service."

"They're still the cheapest, still the fastest, and they're still going to have the lion's share of the market," said Dora Aldridge, whose Wadsworth, Ohio-based Aldridge Folders lost thousands of dollars when some back-to-school supplies such as student orientation folders didn't reach the classrooms in time because of the strike.

She said some parcel post shipments made during the strike still haven't arrived.