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A Decade Of Decline And Failure Must Come To An End
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<blockquote data-quote="oldrps" data-source="post: 1034666" data-attributes="member: 36765"><p>You are further from the truth in why FedEx had to buy RPS. In 1996, UPS started to bundle their discounts between their air and ground packages. This is something that neither FedEx nor RPS could do since they did not do both air and ground. I was with RPS during the time and we were growing at about 15 - 20% per year, that stopped in 1996, it went to about 4% growth. It was a very smart move on UPS as neither FedEx or RPS could compete with it.</p><p></p><p>I always felt that Airborne and RPS would have been a perfect match, both were run with contractors and were not known to have the highest standards. Kind of glad it never happened. RPS did not have the money to create or invest in an overnight air network, it had just completed 100% coverage in the US that year and was still putting it's money in growing the ground network. I am sure that FedEx realized it would take many billions of dollars and years to build a ground network. It was a quick way for both to battle UPS on this front and stop the erosion of customers leaving.</p><p></p><p>I was surprised when it was announced that FedEx was buying RPS, our image was lower than FedEx and would take years, maybe never to have an image as good as Express. I can't believe on how improved Ground's service has become since the FedEx purchase; and this happened with contractors! I left Ground because I always felt that FedEx would shut Ground down and combine it with Express, I got that wrong. I also thought that the contractor model could not get bigger, wrong again.</p><p></p><p>As much as the Express employees do no want to hear, Express has to get smaller. The shipping market has changed, shippers are using less Overnight/2 Day. They have realized they do not have to spend $50 - $60 to overnight a package when it can wait a day or two and ship it for $10 by Ground. Cutbacks at the shippers have them looking everywhere to save money and cutting back on Overnight/2nd day premium services is a no brainer. Luckily, FedEx has been investing in their Ground network for years and weren't caught with their pants down. If they hadn't, UPS would have taken a lot of Ground customers with them and any Express package that they ship. I doubt you will find any shippers that ship Ground by UPS and air with FedEx, those days are long gone. It's all (air and ground) or nothing with the shippers.</p><p></p><p>The Kinko's purchase never made sense, except it gave FedEx an immediate retail outlet to compete with the UPS Stores, unfortunately, they bought a company that was known for copies not shipping. The way they have moved Kinkos/Office around in their corporate financials has really hidden how much they are really losing each year.</p><p></p><p>I agree about the contractor and the future legal problems. It will be interesting in the next 10 - 20 years to see if it is what makes FedEx very profitable or become it's Achilles heel.</p></blockquote><p></p>
[QUOTE="oldrps, post: 1034666, member: 36765"] You are further from the truth in why FedEx had to buy RPS. In 1996, UPS started to bundle their discounts between their air and ground packages. This is something that neither FedEx nor RPS could do since they did not do both air and ground. I was with RPS during the time and we were growing at about 15 - 20% per year, that stopped in 1996, it went to about 4% growth. It was a very smart move on UPS as neither FedEx or RPS could compete with it. I always felt that Airborne and RPS would have been a perfect match, both were run with contractors and were not known to have the highest standards. Kind of glad it never happened. RPS did not have the money to create or invest in an overnight air network, it had just completed 100% coverage in the US that year and was still putting it's money in growing the ground network. I am sure that FedEx realized it would take many billions of dollars and years to build a ground network. It was a quick way for both to battle UPS on this front and stop the erosion of customers leaving. I was surprised when it was announced that FedEx was buying RPS, our image was lower than FedEx and would take years, maybe never to have an image as good as Express. I can't believe on how improved Ground's service has become since the FedEx purchase; and this happened with contractors! I left Ground because I always felt that FedEx would shut Ground down and combine it with Express, I got that wrong. I also thought that the contractor model could not get bigger, wrong again. As much as the Express employees do no want to hear, Express has to get smaller. The shipping market has changed, shippers are using less Overnight/2 Day. They have realized they do not have to spend $50 - $60 to overnight a package when it can wait a day or two and ship it for $10 by Ground. Cutbacks at the shippers have them looking everywhere to save money and cutting back on Overnight/2nd day premium services is a no brainer. Luckily, FedEx has been investing in their Ground network for years and weren't caught with their pants down. If they hadn't, UPS would have taken a lot of Ground customers with them and any Express package that they ship. I doubt you will find any shippers that ship Ground by UPS and air with FedEx, those days are long gone. It's all (air and ground) or nothing with the shippers. The Kinko's purchase never made sense, except it gave FedEx an immediate retail outlet to compete with the UPS Stores, unfortunately, they bought a company that was known for copies not shipping. The way they have moved Kinkos/Office around in their corporate financials has really hidden how much they are really losing each year. I agree about the contractor and the future legal problems. It will be interesting in the next 10 - 20 years to see if it is what makes FedEx very profitable or become it's Achilles heel. [/QUOTE]
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