10/27/2005

Aggressive Initiatives Save Fuel At UPS Airlines

UPS has the world's ninth largest fleet of planes. Can you imagine the fuel bill they run up? New initiatives have been implemented to help them reduce fuel costs by up to one million dollars a month. I think that this will be the trend in most companies. There is no way around the price of an individual gallon of fuel but if you can become more efficient you can save money. The management of UPS measures everything. This is just another improvement they think needs to be done and will make them even more competitive in the shipping world.

3 comments:

Elijah said...

I heard that UPS buys their fuel in bulk. If they did where would they store it? It sounds good if you could afford it and if you had to means to take care of it, but if you couldn't i don't know what you would do with the current prices. I think that the new tactics that are being taken by UPS will soon be adopted by other firms who have similar problems. I think that before too long, many people will start trying whatever they can to save money and this is just a start to what firms will have to do to survive.

Logan said...

Your right, the price of fuel is out of our hands, however, we can take personal steps towards saving money each day. Cutting back on the amount we drive and purchasing more fuel-efficient vehicles are ways to save money. In the short-run, gas prices will definitely affect our budgets but as we become wiser and adapt to higher prices, the long-run will become more stable.

Dr. Tufte said...

-1 on Elijah's comment for poor capitalization.

This is precisely what we expect to see in this situation.

My guess is that UPS does not buy in bulk. It's more likely that they sign forward contract for delivery at a future date at a price that is fixed today.