Catalogers sing UPS blues

Multititle cataloger Knight’s Ltd. has been a United Parcel Service customer for 20 years. But now St. Louis-based Knight’s is considering ending its relationship with the carrier. Already the $121 million company has switched its apparel and shoe business-about 500,000 packages a year from its City Spirit, Papillon, and Shoe Studio titles-to the Postal Service’s Priority Mail, says vice president of operations Steve Kessler.

“UPS keeps telling us it’s not making any money delivering our packages, so it keeps wanting to renegotiate in the time period between the [contracted] rates,” Kessler says. In November, the carrier proposed adding a $29 surcharge for delivery of packages with a combined length and width of 108″ from Knight’s Ltd.’s Home Decorators Collection home furnishings catalog.

Knight’s Ltd. is just one of several consumer catalogers complaining about UPS. Others cite the carrier’s unwillingness to negotiate on prices, its Sept. 1 elimination of accepting cash-on-delivery orders, and shipping delays as reasons to seek alternatives. Making matters worse, another rate increase is likely, considering that for the past 10 years the carrier has hiked prices annually.

“About 85% of my catalog clients are shying away from UPS in favor of the USPS and other alternatives,” says Debra Wilson, an Atlanta-based catalog consultant. “What used to take one or two days for delivery now takes two or three days. A package shipped from Atlanta to Asheville, NC, which used to take a day or so, now can take up to three days.”

Fred Bell, president of Huntingburg, IN-based home furnishings mailer Touch of Class, ended its 19-year relationship with UPS a year ago, mainly because of UPS’s inflexibility regarding pricing of residential deliveries. In January 1998, he switched his business-about 400,000 packages a year-to the Postal Service and parcel carrier CTC Distribution Direct. “During the [August 1997 Teamster-UPS] strike, CTC and USPS were very aggressive, with good pricing and service,” Bell says. “You could tell they wanted our business.”

“UPS says it wants our business,” says Mark Cantor, marketing manager for Lakewood, NJ-based gadgets cataloger Lifestyle Fascination. “But when it keeps raising our rates, what are we supposed to think?” UPS handles the “lion’s share” of the company’s deliveries, but Cantor says Lifestyle is searching for alternatives.

UPS spokesman Norman Black denies that the carrier wants out of the consumer business. “Every trend suggests that people want more things delivered to their home,” he says. “That’s not a market UPS would dream of abandoning. But that doesn’t mean we make money delivering residential packages.” According to Black, UPS loses money delivering a $5 package to a residence.

As for service issues, Black says that any delivery delays are a result of a compromise that UPS struck in 1995 when its account executives met with a few hundred of its largest catalog mailers. “We asked them what they wanted us to do: raise rates or tack on a day for rural residential delivery. Almost unanimously these catalogers chose to add a day onto delivery time.”

And to be fair, not all consumer catalogers are disgruntled with UPS. “We haven’t noticed any service deterioration recently,” says David Hochberg, spokesman for Rye, NY-based, $240 million general merchandise cataloger Lillian Vernon. And Jim Zimmerman, president of $3 million Los Angeles-based ceramics cataloger Cottura, says that UPS has been “very responsive this past holiday.”-MDF

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