Big Issues in Small Packages

Perched atop packages stuffed with his company’s coffee brewers, Jack Lovely waited 20 minutes before it was his turn to see a clerk at a Santa Ana post office. Up until last week, those boxes would have been picked up by a United Parcel Service driver.

“It’s a nightmare. I’ve been turned into a highly paid delivery boy,” said Lovely, his company’s production manager. Lovely found himself flanked by a lobbyful of similar sufferers, including seven Calvary Chapel ministry workers waiting to mail 42 boxes of Christian books and tapes, four at a time--the limit at the post office.

Workers at millions of small companies nationwide find themselves handling unusual tasks in this, the second week of the Teamsters union strike against United Parcel Service of America Inc. With competitors such as Federal Express Corp. severely limiting new business in order to keep established clients happy, the challenges are formidable.

While large businesses were more likely to have backup plans and other shippers they can call upon, most small businesses like Lovely’s Aquabrew Thermo Express of Santa Ana, which employs 25 people, have had to struggle harder to find solutions.

Many companies have found other ways for moving goods--the U.S. Postal Service, trucking firms, couriers and mail service companies. And some said they may continue to make use of those alternatives when the strike ends.

“We found out you could put five boxes of 40 pounds each on a pallet and ship them together by truck,” said Matthew Hoscoe of Irvine-based TNR Technical Inc., which had been using UPS to distribute batteries to customers. “It takes longer, but you can do it.”

Companies with seasonal or perishable goods, from textbook publishers to lobster shippers, are under pressure. Russ Berrie & Co., a New Jersey manufacturer of novelty items, has been forced to lay off 80 East Coast warehouse workers and 20 more in Petaluma, Calif., just as it is gearing up for Christmas shipments.

Russ Berrie President Curts Cooke said truckers are handling about 25% of the company’s usual shipments of 5,000 cartons a day. But most of his customers pay the freight bills, and Cooke said there’s no good alternative to UPS because “it’s just the cheapest and most dependable service.”

In Southern California’s huge garment industry, fall shipments are piling up, especially those for small retailers that rely on UPS rather than trucking companies.

“We can’t get anything out,” said Vera Campbell, owner of junior sportswear maker Knit Works in Los Angeles, which needs to get its back-to-school merchandise into the stores. She said her employees are personally delivering goods to stores.

“There’s all kinds of ways to get around the problem, but it’s inconvenient and expensive,” said Ilse Metchek, executive director of the California Fashion Assn. in Los Angeles. “It will affect the companies’ fourth-quarter bottom line.”

Wearable Integrity Inc., which normally ships 100 to 300 boxes of Barbara Lesser dresses a day, has sent a few via FedEx, “but it’s astronomically expensive,” company executive Mark Lesser said.

As garments pile up in a Los Angeles warehouse, the firm has taken emergency steps such as hiring a truck to haul 140 boxes to the post office. Lesser said it took an employee half a day to mail them.

A few businesses that are totally dependent on UPS are shut down, or nearly so.

“We are dead in the water, and all the customers are furious,” said Kathryn Flint, whose family-run Flint River Ranch pet food business in Riverside is a UPS customer.

The food, which contains no chemical preservatives, had been sent directly to dog and cat owners via UPS, typically in 25- or 40-pound shipments. The Postal Service can’t handle the volume, the shipments are too small for trucking lines, and FedEx “is not even picking up any more from our place,” Flint said.

She and her husband, Jim, have furloughed half their 18 employees. They still have some office employees taking orders, but those can’t be filled until the strike ends, “and there’s no income coming in whatsoever,” Flint said.

Both she and Lovely want President Clinton to reconsider his position that he can’t order UPS’ Teamster members back to work because the strike has yet to cause a national emergency, a requirement for the president to invoke the 50-year-old Taft-Hartley Act.

“It is ludicrous to think that this is not an economic predicament,” Flint said.

Postal Service figures show just how much small businesses rely on UPS, said David Mazer, a Postal Service spokesman in Los Angeles. He cited the prevalence of such businesses in Orange County.

Nationally and elsewhere in Southern California, the post office’s Express Mail overnight service is up 70% since the UPS strike began, and in Orange County it has risen by 200%, Mazer said. And priority deliveries, which arrive within two or three days, are up 100% in the county, compared with 50% elsewhere.

The effect: Customers such as the Calvary Chapel workers, who for the first week of the strike had been allowed to drop off bulk postal shipments by appointment in Santa Ana, have been cut back this week to the four-packages-at-a-time limit.

Outside Orange County, most post offices were still allowing businesses to make bulk drop-offs by appointment, Mazer said.

Among the strike’s victims are businesses that had relied on products shipped via UPS by truck. Many of those shipments were reported to still be in warehouses while UPS managers handled high-priority deliveries.

For Mark Friedman of Blue Cross Beauty Products in Pacoima, the problem is nail polish, and lots of it. The company has 45 million bottles of nail polish a year that must reach stores across the country before the hip hues of the moment become passe.

About 1,000 boxes of the hottest colors, picked up for shipment by UPS a week before the strike, have yet to reach customers. Meanwhile, ads touting the products have been published in newspapers.

“Nobody could have imagined how disastrous this is,” Friedman said. “Everything we shipped to the East Coast the week before the strike has not arrived.”

Friedman and others are under pressure from clients to replace missing shipments using postal overnight delivery to replace the shipments stalled in the warehouses. Doing so actually doubles the amount of goods in transit right in the middle of the strike, pointed out Kathy Gibbons, general manager of Coastal Care Inc.

Coastal, a Brea company that provides products for respiratory therapy, made a second shipment of tracheal tubes via the Postal Service to hospitals in Northern California when a UPS shipment got hung up in a Ventura warehouse, Gibbons said.

“Luckily, most of our deliveries we do locally with our own trucks,” she said.

Apria Healthcare Group Inc. in Costa Mesa, which uses UPS for some home deliveries of medical equipment, stepped up use of its own trucks. Local delivery services have also stepped in to help, Apria spokeswoman Sheree Aronson said.

“In some of the markets, we may keep relying on the local couriers after the strike is over,” Aronson said. “It sort of speaks to an entrepreneurial spirit, where the little guy sees an opportunity.”

The little guys include some of the office service and mailbox franchises of AIM Mail Center of Mission Viejo. AIM Chief Executive Michael Sawitz said business this week is up as much as 50% at some of the stores, which have accounts with many shippers other than UPS and generally can find alternatives for small businesses.

“American business will always find a way,” Sawitz said.

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More UPS Coverage:

Talks to resume as the strain of the strike becomes more obvious. A1.