UPS strike snags resellers' IT deliveries

Just as the federal government was gearing up for the peak buying season the United Parcel Service (UPS) strike disrupted the flow of information technology products governmentwide and promises to cause more delivery problems if the work stoppage continues.

The strike which involves 185 000 UPS employees represented by the Teamsters union began Aug. 4 and has forced business to a near stand-still at UPS. The delivery firm normally handles 80 percent of the country's package delivery traffic. As of late last week negotiations between the Teamsters and UPS management were continuing.

In the federal market the greatest impact of the strike thus far has been on resellers who receive goods from product vendors and market them to agency buyers. A number of reseller executives described a range of logistical headaches caused by the strike.

William Davis Sr. chief executive officer of Pulsar Data Systems Inc. said the strike is having a "significant impact" on his company which is a General Services Administration reseller. Under normal circumstances UPS handles 15 percent to 20 percent of the company's deliveries and about 30 percent to 40 percent as the buying season reaches its peak in August and September.

Pulsar is shifting its delivery workload to other entities including the U.S. Postal Service Davis said. Still deliveries that Pulsar usually handles within 48 hours will take about three to five days he said. That schedule is well within the 30-day delivery time frame stipulated in schedule contracts but federal customers have come to expect much faster turnaround Davis said.

The difficulty however is not strictly with shipping products to customers. The process of receiving products from suppliers has also become a problem."We are waiting on computers and we can't get them " said Debbie Gordon president of GCG Computers Inc. a reseller in Columbia Md. which has one of the National Institutes of Health's Electronic Computer Store contracts. "We're not receiving any inventory right now at all."

GCG for example was expecting to receive a laptop from Gateway 2000 Inc. that was bound for the Naval Post-Graduate School in Monterey Calif. The Navy installation needed the product overnight. But no Gateway laptop could arrive in time so GCG shipped out the laptop of one of its executives.

Direct-marketing product manufacturers such as Dell Computer Corp. and Gateway however maintain they have experienced no problems in making deliveries and large government contracting authorities reported minimal impact at this point.

"We've had no feedback on problems at this time " said Tom Leahy a product leader with the Army's Small Computer Program Ft. Monmouth N.J. The Small Computer Program manages such buys as PC-2 and Portable-2. The story is similar at the Air Force's Standard Systems Group which manages the Desktop V contract. "As far as we know there haven't been any problems " a spokeswoman for SSG said.

No Promises

Still companies were experiencing problems as they turned to alternative delivery sources which were swamped with parcels that normally would have gone to UPS. Services such as as Federal Express Corp. and Airborne Express have suspended their on-time service guarantees.

"We are not in a position to tell the customer `Yes you will absolutely have it tomorrow ' " said Alan Bechara vice president of federal sales at Comark Federal Systems a Chantilly Va. reseller. "[The strike] couldn't have happened at a worse time."

Bechara said the company is handling bulk shipments as it typically does through freight services. Smaller orders have been routed through Federal Express which charges more than UPS. Bechara said UPS' two-day service for small items is $11.95 vs. $17.95 at Federal Express.

At GE Capital Information Technology Solutions' Federal Systems unit the greatest impact of the strike has been on small orders that typically have shipped via UPS ground said Gilbert Gautereaux vice president of Federal Systems. He said his company as turned to such options as Federal Express and courier services. "It's a challenge " he said.

However Dendy Young chief executive officer at Government Technology Services Inc. said the strike has not adversely affected the company. "We've had no problems receiving or shipping product " he said. He said Federal Express has stepped up to the challenge of handling the overflow.

Other reseller executives said the delivery problems likely will worsen if the strike drags on. "If this continues we're going to be in a world of hurt " one executive said.