UPS JUST DRIVES AROUND RALLY IN THE SUN

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 22, 1992                   TAG: 9202220170
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium
UPS JUST DRIVES AROUND RALLY IN THE SUN
Catalog company employees rallied in the sunshine Friday, chanting slogans against a United Parcel Service rate increase and talking of saving their own jobs.
At least 100 employees of the Joan Cook and Telebrands mail-order houses and executives from Orvis and CTC Distribution Services carried their protest message along Thirlane Road in front of the UPS hub.
UPS drivers paid little attention to the demonstration as their brown trucks pulled in and out of the parcel-sorting facility.
The protesters chanted, "Two, four, six, eight, how do you negotiate - lower rates?" led by such cheerleaders as Harold Swartz, president of Joan Cook and Arnold Baker, operations vice president of Telebrands. They seemed to have a good time, parading with posters in front of television and newspaper cameras.
The parade, organized by a new coalition of mail order firms, was an unusual demonstration of companies criticizing another company. Bob Kenney of UPS in Atlanta said he has not heard of another such appearance.
Bill Baudreau, Joan Cook vice president and a leader in forming the catalog coalition, said he hopes it will result in a network to share information as well as a way of pooling resources to enhance customer service. The companies may be able to increase their bargaining leverage collectively in packaging, materials handling and human resources, he said.
The catalogers' main target is a UPS residential rate increase. Effective Monday, the parcel delivery company's overall residential rate will rise 10.7 percent, Kenney said. Rates in some zones will go up by as much as 16.4 percent. This comes on top of a residential rate increase of 16.1 percent last year. The new UPS rates will amount to an average increase of 45 cents for each package shipped The parade was an unusual demonstration of companies criticizing another company. Bob Kenney of UPS in Atlanta said he has not heard of another such appearance. to a residence, Kenney said in a telephone interview.
"They're [UPS] going to put us out of business . . . How do you raise rates in a recession?" Swartz asked.
Joan Cook, Home Shopping Network and Orvis have said they are shifting their shipping business from UPS to the U.S. Postal Service because of the rate increase.
The expense of labor and fuel has risen, Kenney said, and "we've tried to fairly cost back our services to users."
The catalogers claim their pullout will take UPS jobs. But Rick Collins of the UPS customer service department at the Roanoke hub said no permanent layoffs have occurred. Temporary workers are hired to staff the hub during seasonal peaks in operations, such as the Christmas season, he said.
John Moticha, Orvis operations vice president, saw irony in the rate increase, coming after mail order companies helped UPS grow in the 1960s, taking their business from the Postal Service. Now the Postal Service has opened bulk-mail centers and catalog companies are using them, he said.
Arnold Baker, Telebrands vice president, said the UPS rate increase "is like a slap in the face" because the higher cost of residential delivery will have to be passed on.
John Clark, president of Minneapolis-based CTC Distribution Services, said UPS has been "squeezing my margins." His trucking company hauls packages across the nation for local delivery by UPS or the Postal Service, a practice called "zone skipping."
Last year, he said, CTC spent $58 million with UPS while reporting revenue of $80 million. With the UPS rate increase, "I plan to convert every dime of business I can to the Postal Service," he said.
Michael Moulse, a Joan Cook employee, said the rate increase sets off a chain reaction. If the customers are less likely to buy because catalog companies raise their prices, mail-order jobs will be cut, he said.
Moulse and other protesters denied an earlier report that Joan Cook planned to fire any employees who did not join the demonstration. "Most of us wanted to be here," he said.

by Bhavesh Jinadra by CNB