United Parcel Service, Inc. - California

Training Proposal for:

United Parcel Service, Inc.

Agreement Number: ET13-0238

Panel Meeting of: January 25, 2013 Analyst: R. Swier
ETP Regional Office: San Diego

PROJECT PROFILE Industry Services
Sector(s):
Contract Retrainee
Attributes: HUA Transportation/Logistics

Priority Rate

Priority Industry: Yes No

Counties Statewide Repeat Yes No
Served: Contractor:

Union(s): Yes No International Brotherhood of Teamsters, Western Region Local 104;
International Associations of Machinists and Aerospace Workers, Automotive Lodge
190; Internation Brotherhood of Teamsters, Local No. 481

Number of Employees in: CA: 18,131 U.S.:170,254 Worldwide: 398,300

Turnover Rate: 3%
19%
Managers/Supervisors:

(% of total trainees)

FUNDING DETAIL

-Program Costs (Substantial (High Earner = Total ETP Funding
Contribution) Reduction) $599,616

$599,616 $0 $0

In-Kind Contribution: 100% of Total ETP Funding Required $667,200

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United Parcel Service, Inc. January 25, 2013 ET13-0238

TRAINING PLAN TABLE

Job Job Description Estimated Range of Average Post-
No. Hours Cost per Retention
Type of Training No. of Trainee
1 Retrainee Class / Wage
Priority Rate Buisness Skills, Trainees Lab CBT $432
Commerical Skills, $14.69
1,388 24-200 0-100
Management
Skills Weighted Avg:

24

Minimum Wage by County: $16.03 in Alameda, Contra Costa, Marin, San Francisco, San
Mateo, Santa Clara, and Santa Cruz counties; $16.00 in Los Angeles County; $15.88 in Orange
County; $15.63 in Sacramento County; $15.45 in San Diego County; $14.69 in all other counties.

Health Benefits: Yes No This is employer share of cost for healthcare premiums –
medical, dental, vision.

Used to meet the Post-Retention Wage?: Yes No Maybe

Up to $3.95 per hour may be used to meet the Post-Retention Wage.

Wage Range by Occupation

Occupation Titles Wage Range Estimated # of
Trainees
Administrative 71
Engineering 79
Specialist 50
Human Resources 85
Finance 40
Security 26
Sales & Marketing 300
Managers 95
Operations/Frontline Supervisor 170
Feeder 72
Package Driver 195
Feeder Driver 23
Mechanic 182

INTRODUCTION

United Parcel Service, Inc. (UPS) is a global leader in logistics, offering a broad range of
solutions including the transportation of packages and freight; the facilitation of international
trade, and the deployment of advanced technology to efficiently manage the world of business.
UPS serves 1.1 million pick-up customers and 7.7 million delivery customers daily.
Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. This
proposal includes up to 154 California locations.

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United Parcel Service, Inc. January 25, 2013 ET13-0238

UPS meets out-of-state competition standards as a company that provides a service in
California that regularly competes with service providers located out-of-state. (Title 22,
California Code of Regulations, Section 4416(d))

PROJECT DETAILS

UPS reports a need to complete training for a large portion of the trainees targeted in the prior
contract. Training was not completed due to the economic downturn and current implementation
of new technologies which has resulted in increased training requirements. UPS is trying to
differentiate its services from its competitors with major technology advancements. The
company reports that workers need new skills in creative thinking, problem solving, decision-
making, business, and financial negotiations, in addition to technical skills.

Due to increased competition with other carriers, new services have been launched, such as
UPS My Choice, UPS Returns Exchange and UPS Returns Pack and Collect. These help
customers with various parts of logistics. The sales force, management team, and drivers need
training in these new services.

Additionally, UPS needs to upgrade the skills of its sales force. UPS customers are extremely
diverse, and the sales force must be trained in various areas of high tech, retail, industrial, and
automotive, services, and healthcare.

Out-of-State Training

UPS is requesting approval to attend training outside the state of California for sales and
marketing staff (300 trainees). The company has three Sales Academy workshops in three
locations: Phoenix, Arizona; Greenville, South Carolina; and San Antonio, Texas. It is more
cost effective for UPS to conduct these trainings at the designated out-of-state sales training
locations. Trainings will meet the ETP class ratio requirement of 20:1 (Retrainees:Instructor).
UPS will conduct 70% of the training in California, but the remaining 30% would be conducted
out-of-state at UPS facilities.

UPS expects to send its California workforce to the Sales Academy workshops in early 2013.

Training Plan

UPS is requesting the Panel’s assistance to provide between 24-200 Classroom/Laboratory and
Computer-Based training (CBT) hours in the following areas:

Commercial Skills - 47%

Feeder, Feeder Drivers, some Specialists and some frontline Supervisors will receive classroom
training in Commercial Skills, to prepare them to work with the new system technologies. Some
of those technology areas include upgrades, such as electronic clipboards, Telematics, Next
Generation Small Sort, and Dispatch Process Skills. Mechanics will receive training in
Component Identification; Troubleshooting and Failure Analysis; Preventive Maintenance and
Installation Procedures.

Business Skills – 48%

Sales and Marketing Staff will receive training on proper marketing concept; marketing
management decision; components of marketing strategy; and understanding important

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United Parcel Service, Inc. January 25, 2013 ET13-0238

marketing concepts such as segmentation, target markets, positioning, and consumer buying
behaviors. Negotiation strategies, sales strategies and customer needs are important training
areas for our sales force.

All other occupations will receive Business Skills training related to their job duties. For
example, Engineering Staff will receive training in Property Planning Concepts to more
efficiently schedule feeder work, apply property planning concepts and learn how to efficiently
organize. Human Resource Staff will receive training in Building Relationships to improve
listening techniques and conflict resolution skills. Accounting and Administrative Staff will
receive training in Revenue Management and Cost Recovery, Collection Techniques, Financial
Analysis, and Problem Solving.

Specialists will receive job skills training relating to their departmental requirements which may
include Problem Solving and Accountability, Project Management Skills, and Integrating
Strategies.

Management Skills – 5%

Frontline Supervisors and Managers will receive training in new technologies, process
improvement, and customer service. Management Skills training will help them improve
efficiencies. This training is designed to meet UPS’ strategic goals and to support staff during
the implementation of the new technologies.

Active Contract

UPS has an active contract with ETP under the Alternative and Renewable Fuel and Vehicle
Technology Program (AB118) with the term of 6/26/12 to 6/25/14. Of an estimated 150 trainees,
thus far 12 have been enrolled and 12 have received the minimum hours of training. The
training is for implementing new Electric, CNG, LNG, and Hybrid vehicles for California. UPS
takes pride in their social responsibility, sustainability, and helping to reduce carbon footprint.

Commitment to Training

UPS represents that ETP funds will not displace the existing financial commitment to training.
The company states that it spends approximately $5.5 million a year on training its California
workforce. UPS reports that the majority of training is through its online learning system in
courses such as product knowledge, basic Microsoft office skills, sexual harassment prevention
training and diversity training. Additionally, UPS instructors provide classroom training in
compliance and ethics training, new hire orientation training, safety training, and on-the-job
training to both full-time and part-time throughout the year.

The majority of the proposed class/lab training will be in curriculum topics that will help to meet
new technological and service requirements. Some training classes will be provided to trainees
not trained under the prior ETP Agreement. A large focus will be in the sales force training.
UPS intends to continue training after the ETP program ends and to continue to provide
opportunities for employees to pursue higher education as well as training programs that
prepare them for future and current jobs in the company.

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High Unemployment Area

Some trainees in Job Number 1 work in a High Unemployment Area (HUA), areas with
unemployment rate exceeding average 15%. Although the company has locations in an HUA, it
is not asking for a wage or retention modification.

RECOMMENDATION

For the reasons set forth above, staff recommends approval of this proposal.

PRIOR PROJECTS

The following table summarizes performance by UPS under an ETP Agreement that was
completed within the last five years:

Agreement No. Location (City) Term Approved Payment Earned
ET09-0275* Statewide Amount $%
10/27/08-
10/26/10 $1,334,869 $165,784 (12%)

*The company reports that the term of this Agreement was at the onset and peak of the economic
downturn; therefore, all training was put on hold because of cost containment procedures. Currently UPS
does not have the same cost containment issues.

The ETP program will be administered by UPS’ Regional Tax Department. This Department has
administered the contract in prior years (including prior contracts that earned over 1 million) and is familiar
with the program. The Department has a staff of three responsible for enrolling trainees, tracking,
coordination of training rosters, and meeting with ETP staff.

DEVELOPMENT SERVICES

N/A

ADMINISTRATIVE SERVICES

N/A

TRAINING VENDORS

To Be Determined

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Exhibit B: Menu Curriculum

Class/Lab Hours

24-200 Trainees may receive any of the following:

Business Skills
 Sales & Marketing Techniques for New Services

o Strategies for Sales

o Marketing Strategies

o International Services Sales Strategies

o Responding to Customer Needs

o Negotiation Strategies

o Conversion Selling Strategies

o Achieving Coaching Excellence

o Delivering Profitable Sales

o Focus Reinforcement Training

o Our Culture and Heritage Training
 Integrating Strategies
 Revenue Management and Cost Recovery
 Collection Techniques
 Collection Application
 New Billing System Training
 Project Management

o Developing Measurable Critical Success Factors

o Projecting Time, Cost & Quality Dimensions

o Project Scope Statements

o Work Breakdown Structure

o Financial Analysis
 Negotiation and Selling Skills (non-labor)
 Property Planning Concepts
 Problem Solving and Accountability
 Effective Presentations
 Building Relationships
 Package Flow Technology

Commercial Skills
 Driver Training Skills (Package/Feeder)

o Improving Customer Satisfaction

o Operational Performance Skills

o Familiarization of the New IVIS System

o Maintenance Procedures and Information
 New Vehicle Familiarization
 Compliance Training
 Component Testing and Diagnosis
 Record Keeping Requirements for Timecard Systems

o Global Timecard System

o IVIS
 Generating Reports for New System
 Creating and Implementing Quality Dispatch Plans
 Preload Planning

ETP 100 Exhibit B Menu Curriculum (02/13/12)

United Parcel Service, Inc. ET13-0238

 Operational Excellence Training
 Hub Planning
 New Dispatch Procedures
 Technology Training on New Systems

o Telematics
o NGSS
o Network Planning Tools
o ORION
 Mechanic Training for New Equipment
o Body and Paint Procedures
o Component Identification
o Troubleshooting and Failure Analysis
o Inspection Methods
o Preventive Maintenance & Installation Procedures
o Tire and Wheel Run-Out Training
o New Vehicle Familiarization

Management Skills (Managers/Supervisors Only)
 Key Elements to Support the Balanced Scorecard
 Preload Cornerstone Process
 Assessing Performance
 Improving Performance
 Strategies for Successful Supervision
 Environmental Audits
 Assessing Project Goals
 Effective Planning and Organization for New Managers
 Supporting the Package Operation Team
 Motivational Tools
 Managing Priorities
 Establishing Objectives
 Distributing New Information
 Communicating the Company Vision Training
 Global Leadership Development
 Executing Business Plans
 Leading the Future
 Building Your Team
 Networking & Collaboration

Safety Training cannot exceed 10% of total training hours per-trainee

CBT Hours
0-100

COMPUTER-BASED TRAINING (CBT)

There is a wide menu of CBT training courses in UPS Learning Center Systems.
The courses will include topics listed in the above class/lab curriculum and the
ETP analyst will be provided with an electronic file of course titles and
corresponding standard time per module.

ETP 100 Exhibit B Menu Curriculum (02/13/12) 2 of 3

United Parcel Service, Inc. ET13-0238

Note: Reimbursement for retraining is capped at 200 total training hours per
trainee, regardless of the method of delivery. CBT is capped at 50% of total
training hours, per trainee.

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