Larry Gaynor saw it coming. He knew UPS management and union representatives had been talking four months before the strike. He knew one week before the strike that such an event was possible because someone at UPS told him personally. But nothing could prepare him for the logistical and financial devastation the 15-day strike would cause.
“It was the equivalent of being shut down by a natural disaster,” says Gaynor, president and CEO of Nailco Salon Marketplace (Farmington Hills, Mich.). All of a sudden, UPS allowed Nailco to send just 75 to 100 packages a day (normally they ship 1,000 to 1,200 packages a day), and they wouldn’t accept packages containing hazardous products such as acetone. The post office does not accept hazardous materials; Federal Express does, but they tack a surcharge of up to $40 on each package for the privilege.
Gaynor didn’t waste any time. He trucked as many packages as he could to the post office, and sent 12 to 15 truckers to deliver shipments within the state. But the efforts moved only about 15% of Nailco’s normal volume — Gaynor estimates his company lost $1 million in sales. The UPS strike caused many small businesses to re-evaluate their shipping procedures, particularly those companies that rely on mail-order sales. According to the Direct Marketing Association, a New York City-based trade group, most companies have learned the danger of relying on just one carrier. But there are many reasons why nail product companies may discover why they went with UPS in the first place: they are the only viable source. UPS virtually has a lock on the small and medium-sized package shipping market. It places no limit on the number of packages its customers can ship each day, it accepts liquid and hazardous materials, its rates are reasonable and—best news of all for some — its signature brown trucks pick up the packages.
Still, some company owners are determined to branch out, even if their shipping sources aren’t as convenient as UPS. Tweezerman’s Dal LaMagna and his staff watched in dismay as 80% of their shipments sat in the warehouse. “We certainly learned our lesson,” LaMagna says. “We will no longer have 80% of our outflow be dependent on one carrier.” The company found several resources, including the local post office, to help ship their back-logged orders. They are also using a metropolitan New York trucking carrier and are considering expanding their use of RPS (a competitor of UPS). Hair Care Nail Supplies (Dania-Hollywood, Fla.) also found an intrastate trucking company for its Florida deliveries. Still, admits Alex Berman, vice president, it was a hassle not having pick-up service. “Frankly, it was either me, my father, or my warehouse manager who had to drive packages down to the post office,” Berman says. “You have to factor in the cost of our down time.”
Ray Schultze, president of Lasco Diamond Products (Chatsworth, Calif.), estimates he lost about 30% of his normal business because of the strike. “Most of our shipments are 50-pound packages, and UPS has a lock on that market,” he says.
Post Office Heroes
High marks for the local post offices were given unanimously by all affected by the strike. Although many of the offices had an official package limit per person, it seems that many of them also bent the rules a little ... or a lot. “We have a very good relationship with our local post office,” says Harriet Rose, president of Forsythe Cosmetic Group (Lawrence, NY). Having sent the bulk of her shipments out before the strike, Rose was able to handle the remainder of her shipments by parcel post. Still, it was a struggle since August is traditionally vacation time for her factory staff. Rose decided to skip the BBSI show so she could keep everything running smoothly at the company.
The efficiency and cooperation particularly of the rural or residential post offices was mentioned with gratitude and some surprise. Tweezerman is based in the tiny Long Island town of Glen Cove, N.Y., yet the local post office was able to handle a significant part of the company’s backlog. “They were extremely accommodating,” LaMagna recalls. “They told us if we brought in 30 packages before 11 a.m. they would be shipped out by 2 p.m.” Packages were brought to several post offices so that a flow of several hundred packages a day could be maintained. “We’ll probably look to the post office more than we have in the past,” LaMagna says.
Some surprise benefits came out of using the post office, at least for Hair Care Nail Supplies. Berman discovered that the post office was twice as quick to send in their C.O.D. checks as UPS. Shipping prices were slightly higher, but delivery was quick and the service was overall very dependable.
A Vital Connection
For salons and distributors in remote locations, the loss of UPS was everything from a minor inconvenience to a painful eye-opener to how much a business comes to rely on daily pick-up and delivery. Christine Haubruge, a nail technician in Tehachapi, Calif., and also a distributor for Galaxy Nail Products, knew her customers were depending on her since there are few beauty supply stores in her rural mountain area. “I drive 60 miles out in every direction to service my customers,” Haubruge says. “I had to stock up more than usual so that I wouldn’t run out of things.” One of her most popular products, a nail pre-primer, ran short, so Haubruge resorted to lending her own salon and demonstration bottles until a new shipment arrived “I drove to as many salons as I could, but some were in the opposite direction,” Haubruge says, “so I had to mail them Priority Mail.”
Vonda Keon, a nail technician and salon owner in Bruce, Miss., was on the verge of switching her acrylic clients to fiberglass or gel, when a delayed shipment arrived at her door. “The strike almost shut me down,” Keon says. Luckily, she tends to stockpile on the basics since she works in a tiny town and is used to waiting several days for her orders to arrive. It got tricky when her checks that were sent for C.O.D. orders were delayed, so when she called for the next order, her previous order hadn’t been paid for yet. But suppliers were patient and sometimes creative when it came to servicing their customers. “One of my suppliers borrowed a truck and delivered the new fall polish colors to my door at 6 a.m.,” Keon says. “They also stayed in touch via telephone and e-mail to discuss the best ways to get my orders out to me.” Some of Nailco’s customers drove in from Virginia and Pennsylvania to pick up their orders instead of relying on the mail.
As the Dust Settles ...
The fact that everyone was in the same boat fostered a patience and cooperation between manufacturer, supplier, and customer. “Our customers realized no one had any choice,” says LaMagna. “They were just grateful we were using alternative ways to get their orders out.” For the most part, they have returned to their original suppliers and things have resumed their normal course.
Despite the inconvenience and even monetary loss caused by the strike, there appears to be considerable support from the nail industry for UPS workers. LaMagna is glad that the workers were able to negotiate a better deal for themselves and that more full-time jobs will be created (according to the 5-year contract, UPS will create 2,000 additional full-time jobs each year for a total of 10,000).
Still the memory remains. Schultze will try to ship at least 20% of his orders by another air express carrier. Gaynor is back with UPS, partly because they are working closely with him to make up for his losses... and partly because he has little choice. “We’ve been loyal to UPS for 12 years and they’re going to do whatever possible to make it up to us,” he says. “Based on that, we will stay with them.”
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