A small nugget of what is sure to be many changes in the coming weeks

vantexan

Well-Known Member
bbsam makes a valid point. Corporations exist to make money. If you want morals watch PBS.

The Ground business model makes a lot of sense from a strictly business point of view.

So if a corporation lies, cheats, and steals it's ok as long as they make money? If a corporation dumps toxic chemicals that leech into the local water supply, it's ok that people get cancer and babies are stillborn as long as the corporation is making money(as long as they don't get caught) because meeting EPA regs is just too dang expensive?
 

STFXG

Well-Known Member
People work to live. Corporations live to work. The sole purpose of a corporation is profits. If they need to lie cheat and steal to profit then it has no moral obligation. There's no soul or guilt In a corporation.

It's all about risk management. If the risk of a catastrophic failure or environmental effects are low then the corporation will take the chance. Any adverse effects of those "bets" are just the cost of doing business.
 

UpstateNYUPSer(Ret)

Well-Known Member
So if a corporation lies, cheats, and steals it's ok as long as they make money? If a corporation dumps toxic chemicals that leech into the local water supply, it's ok that people get cancer and babies are stillborn as long as the corporation is making money(as long as they don't get caught) because meeting EPA regs is just too dang expensive?

My comments were limited to the conversion of Express to a part-time delivery service.
 

bbsam

Moderator
Staff member
So if a corporation lies, cheats, and steals it's ok as long as they make money? If a corporation dumps toxic chemicals that leech into the local water supply, it's ok that people get cancer and babies are stillborn as long as the corporation is making money(as long as they don't get caught) because meeting EPA regs is just too dang expensive?

Remember this the next time you vote republican with there "regulate nothing" attitude. For them the implicit answer to all your questions is "yes".
 

bbsam

Moderator
Staff member

What do you think they mean when their answer to the economic mess is to "cut regulation"? If the Wall Street debacle has proven anything, it is that companies will not "self regulate" when profits are threatened. Fedex does everything in it's power to keep Express under the RLA. Why? Because the regulations are far more lax for their defending against a union presence. But can you imagine Fred's glee if all such labor regulaion was either abolished or had their funding slashed or commissioners who didn't persue claims? T
 

55+

Well-Known Member
People work to live. Corporations live to work. The sole purpose of a corporation is profits. If they need to lie cheat and steal to profit then it has no moral obligation. There's no soul or guilt In a corporation.

Remember...Corporations are now people..The Supreme Court said so:obeyhypnosmiley:
 

Ricochet1a

Well-Known Member
Another sign of major changes in the works for Express.

FedEx Retires 24 Jets to Cut Costs as U.S. Shipments Fall - Bloomberg

Here is the key paragraph from that article:

“Along with the decisions to retire these 50 aircraft, we are also developing detailed operating and cost structure plans to further improve our efficiency,” Express Chief Executive Officer David Bronczek said in the statement. “We expect to provide additional information on these plans in the fall.”

Readers will notice that I've been talking about "business planning" having been done some time ago but operational planning was still needed (up until recently). Well... here Bronczek admits that operational planning is in the works. Doesn't spill the beans as to what that planning will end up producing - but admits that operational planning in is the works which will "further improve our efficiency"

They've already make it public that they're retiring older aircraft and shrinking line haul capability within Express. They've already made it public that they're acquiring Sprinter type vehicles as fast as they can (right-sizing).

So the "shoe" regarding capital equipment has been dropped already.

What is the other shoe to be dropped this fall???

If you've read this list for more than a few months, you know what that other shoe will be.
 

Ricochet1a

Well-Known Member
Our domestic air volume is down as well---the recession has changed the mindset of our major shippers who have realized that their packages don't always have to be there by 1030.

The global economic condition has changed the mindset of shippers that they need to have shipments "there" within 2 days, forget about overnight.

Combined with the efficiency improvements in moving volume over the road - the mindset of shippers thinking that their shipments need to be delivered by air is also changing.

Express is going to shrink its line haul capacity to a level about equal to 2000 year levels - and this isn't a knee jerk reaction to a temporary blip in the economy, it is long range planning.
 

Rhoderunner

Well-Known Member
OK so we are all pretty aware of the "operating plans" but what could the "cost structure plan" entail ? Is this where the possible buyouts and workforce reductions fall under ?
 

Ricochet1a

Well-Known Member
OK so we are all pretty aware of the "operating plans" but what could the "cost structure plan" entail ? Is this where the possible buyouts and workforce reductions fall under ?

Bingo! You get the prize.

The expenses Express incurs can be divided into two broad categories:

1. Capital equipment purchase, maintenance (replacement parts, etc.) and operation (mainly fuel expense)

2. Labor

Express has already made public its intentions in relation to the first broad category. They will reduce the size of the line haul capacity (in reaction to a view of a long-term contraction of air cargo demand), by reducing the number of jets in service (taking the older most fuel inefficient aircraft out of service and not replacing that capacity entirely with new aircraft).

They will also rapidly convert their ground vehicle fleet away from the large W700s as being standard, to smaller, more fuel efficient Sprinter type vehicles. This is all in anticipation of reductions in volume that will be going through Express - BOTH due to lower customer demand for air cargo service AND a shift in the method of delivering air cargo once it arrives at the destination ramps.

The "cost structure plan" in relation to the first broad category has already been made public (mainly to help boost stock price, showing the market that FedEx Corp does indeed intend to boost profit margins in the near future).

The cost structure plan in relation to the second broad category has already been decided upon - just NOT made pubic as of yet... for the simple reason that they need to make preparations to ensure no issues develop with labor getting pissed off about what is going to happen to them.

Aircraft tend not to complain too much if they are "taken out of service". Labor on the other hand does tend to complain if they are taken out of service and can cause problems.

The "fall announcement" has everything to do with the rolling out of delivery manifesting (I believe the operational term is "Dynamic ROADS").

Delivery manifesting is due for a September roll out (this fall....).

This will make the need for experienced Couriers a thing of the past. Look at Ground of today, you will see the Express of the near future (in terms of what they do, not talking in terms of IC model and other stuff).

Once delivery manifesting is fully implemented, then FedEx will absolutely no fear whatsoever of Express unionizing. Not that the capability makes unionizing impossible, but it makes the need to negotiate with a potential union absent.

For the Ground contractors... how long does it take you to get a new hire trained and reasonably proficient in running a route you throw them? (This is not a rhetorical question, the current Express Couriers will be a bit shocked to learn how quickly someone off the street can start working with a fair degree of proficiency).

Then as part of the second shoe dropping (shifting of delivery of 2nd Day volume over to Ground), the need for full-time employees within Express DGO will virtually disappear (they'll still need full-timers to act as Swing Couriers and Couriers for extended area routes).

The way a labor force is "taken out of service" and replaced with "more cost efficient methods" is to buy out or offer early retirement to the "inefficient" labor force (inefficient in terms of cost to operate), and replace that labor force with a force that is much less costly (less costly in terms of actual compensation, and less costly in terms of potential to unionize).
 

UpstateNYUPSer(Ret)

Well-Known Member
R1a, depending upon the ability of the trainee, it can take anywhere from a week to a month to get a new driver proficient on a route. A solid DOL (delivery order listing) and ability to master the DIAD will be key. For example, I was on vacation last week and, due to a staffing shortage, my mgt team was forced to put a 22.3 employee on my area on Friday. He struggled and had to have some work taken off and pickups covered but he got through the route primarily because the DOL is set up nearly stop for stop. Give him a week on that route and he would be just fine. 22.3's make about $8/hr less than FT drivers.

ROADS or PAS/EDD cannot replace area knowledge; however, the use of these routing technologies makes it much, much easier to hire new drivers and get them up to speed and can lead to substantial savings in personnel costs.
 

vantexan

Well-Known Member
Even extended area couriers should be greatly affected. No more 4x10's, and the 4x10 cover drivers will have to be worked into the mix with their own 5 day rt. I know the State of Texas calls 30 hrs or more fulltime. They will probably have to drop the 35hr guarantee, since many, if not most, couriers won't get a full 35.
 

vantexan

Well-Known Member
What do you think they mean when their answer to the economic mess is to "cut regulation"? If the Wall Street debacle has proven anything, it is that companies will not "self regulate" when profits are threatened. Fedex does everything in it's power to keep Express under the RLA. Why? Because the regulations are far more lax for their defending against a union presence. But can you imagine Fred's glee if all such labor regulaion was either abolished or had their funding slashed or commissioners who didn't persue claims? T

On average it's the Republican businessmen that provide most of the jobs. And on average it's those same Republican businessmen who exploit people with those jobs. But it's a huge leap from taking advantage of everything available under the law and committing criminal acts. The ones who make that leap usually get caught. I want to see people back to work, not pie-in-the-sky liberal theories about the way things ought to be. Alot of regulations that businessmen chafe at were thrown on them by the current administration. Take oil drilling. Obama claims more drilling is happening under his administration than ever before. He conveniently leaves out that all this new drilling is on private land. He stopped all drilling on Federal lands shortly after taking office. He has also attacked coal mining and stood in the way of new refineries, pipelines, and nuclear reactors. We need a business friendly government and I'd gladly take a Democrat one if we could find one that doesn't gather votes by promising goodies to ever constituency and spends like maniacs. The single biggest threat to our Social Security is spending so much that it all comes crashing down.
 

bbsam

Moderator
Staff member
On average it's the Republican businessmen that provide most of the jobs. And on average it's those same Republican businessmen who exploit people with those jobs. But it's a huge leap from taking advantage of everything available under the law and committing criminal acts. The ones who make that leap usually get caught. I want to see people back to work, not pie-in-the-sky liberal theories about the way things ought to be. Alot of regulations that businessmen chafe at were thrown on them by the current administration. Take oil drilling. Obama claims more drilling is happening under his administration than ever before. He conveniently leaves out that all this new drilling is on private land. He stopped all drilling on Federal lands shortly after taking office. He has also attacked coal mining and stood in the way of new refineries, pipelines, and nuclear reactors. We need a business friendly government and I'd gladly take a Democrat one if we could find one that doesn't gather votes by promising goodies to ever constituency and spends like maniacs. The single biggest threat to our Social Security is spending so much that it all comes crashing down.
And if you eliminate the regulations the business community can push further without being "criminal". Exactly what I am saying. But this "job creator" is just a 21st century way of saying "trickle down". We've seen 30 years of it and Fedex has been shaped with it as well. Like what you got? Not gonna get any better down the road.
 
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