Amazon to use HD and Ground instead of Express
- Thread starter Doc Sorting Dude
- Start date
MAKAVELI
Well-Known Member
http://www.thefreedictionary.com/_/dict.aspx?rd=1&word=scam
Cactus
Just telling it like it is
Acccepted by who? You and Fred? You guys really like the term misclassification too.
All for chump change wages.
Cactus
Just telling it like it is
Sure I have. And then Fred went and paid off the right politicians. But whatever he does no matter how unethical it's A-OK with you.
Mr. 7
The monkey on the left.
Most of the Amazon pkgs. I see have this nifty blue tape telling the world that whoever ordered this box has Amazon Prime.
I don't see how GD and HD are gonna make 2 day commits all the time.
Maybe they'll shift over the non-two day shipping to GD and HD like the "super saver" shipping stuff?
I don't see how GD and HD are gonna make 2 day commits all the time.
Maybe they'll shift over the non-two day shipping to GD and HD like the "super saver" shipping stuff?
Ah. So we dive into ethical concerns.
Ricochet1a
Well-Known Member
Amazon is changing the method by which it warehouses and ships their product.
Amazon until recently, made a deliberate plan to keep from placing a physical presence in as many states as possible. This enabled them to NOT charge sales tax on orders placed in those states which didn't have a physical Amazon presence - giving them a small competitive advantage over "brick and mortar" retailers. The downside to this strategy was that shipping charges to Amazon were somewhat higher than if they had numerous centers throughout the US. This was mitigated to a large extent by the VERY large amount Amazon ships (volume gets the discount).
Amazon is in the process of building distribution centers in a number of states where they previously had no physical presence. Most of these centers are located in the mid-west, some are located in areas in the south and northeast. Amazon cut deals with the governments of the states in which they are building distribution centers, to either give them tax breaks on the physical locations (property tax), breaks on collecting sales tax on 'in state sales' for a period of time, and other tax incentives. Bezos read a chapter from the "Book of Fred"...
When a customer places an order with Amazon, a process much like the process of how an Express package is routed is undertaken by the Amazon computerized order fulfillment software. In Express, the powerpad automatically routes a shipment by a series of 'logic parameters', that steps through all available potential routing options. The initial potential routing chosen is if the shipment is intra-market (the ASTRA generates with the twin digit prefix that is unique to each of the Express market areas). Then if the shipment CANNOT be moved intra-market, then the next potential routing that involves only ground movement of volume (ramp to ramp, or ramp to hub via CTV). Everyone knows the ASTRA prefixes for these shipments, most often they are used on non overnight volume which is moving between large markets. The next routing alternative is whether the package can be moved through a regional hub. Finally, if all these alternatives are exhausted, routing through Memphis is done.
Amazon is going to use a similar system for filling its orders. When a customer places an order, their software will look at the customer's ZIP code and the shipping speed which the customer chose, then go through a series of logic parameters to determine if a distribution center near the customer can fulfill the order (and get it to the customer in the time parameter chosen). If the software determines that the order can be filled by a local distribution center (and meet the time parameter), the local center will pack and ship the order. If the local center doesn't have the particular item in stock, then the software will automatically look for the next nearest center and determine if the order can be shipped and arrive in the time parameter determined by the customer. This process of checking and verifying is continued until the order can be filled.
By building these regional distribution centers, Amazon will be able to use ground methods of shipping their products more and more, and STILL meet the 2 day time parameter of their "Amazon Prime" option. Their computerized inventory control determines what market demand for a particular product is, and whether it is cost efficient to have a particular product stocked in a regional distribution center, or whether to just keep it in one of the current 'mega' distribution centers. As market demand for a product fluctuates, where to warehouse inventory can be adjusted to be most cost efficient.
So yes, volume is going to be pulled off of Express, and placed onto Ground, BUT FedEx isn't the one doing the shifting, it is Amazon. The process will be gradual (with the completion and stocking of the regional distribution centers), but there will indeed be a slow, deliberate removal of volume off of Express and onto other more cost efficient methods of delivering.
The other kicker is that Amazon is already using regional delivery options (OnTrac is a common one in the western US)
OnTrac Shipping - Overnight Delivery for Less in CA, AZ, NV, OR, WA, UT, CO & ID
These services charge less than FedEx would even for ground service, and have acceptable on time performance. The Amazon software automatically prices shipping costs to their available shippers, and automatically chooses the cheapest alternative - thus why Amazon uses a variety of different shippers from a single location.
With the high cost of air cargo (due to fuel expense), more and more distributors of physical product are going to a regional (and some even state by state) method of inventory warehousing and distribution which can have orders shipped by ground methods of transportation. There is no sign of fuel costs going down (wrote about this a month or so ago), so corporations are adjusting to meet the 'new normal' in shipping expense. With the cost of fuel what it is, it is more cost effective for companies to have distribution centers 'spread out' across the US, instead of relying on less than a handful of centers to meet all market demand (utilizing air cargo to get product delivered to more distant locations on time).
There is a 'synergy' of forces combining to reduce utilization of air cargo - those who don't realize this fact at this date are either deluded or naive. You'd best be served in planning a line of work recognizing the changes which are afoot.
Amazon until recently, made a deliberate plan to keep from placing a physical presence in as many states as possible. This enabled them to NOT charge sales tax on orders placed in those states which didn't have a physical Amazon presence - giving them a small competitive advantage over "brick and mortar" retailers. The downside to this strategy was that shipping charges to Amazon were somewhat higher than if they had numerous centers throughout the US. This was mitigated to a large extent by the VERY large amount Amazon ships (volume gets the discount).
Amazon is in the process of building distribution centers in a number of states where they previously had no physical presence. Most of these centers are located in the mid-west, some are located in areas in the south and northeast. Amazon cut deals with the governments of the states in which they are building distribution centers, to either give them tax breaks on the physical locations (property tax), breaks on collecting sales tax on 'in state sales' for a period of time, and other tax incentives. Bezos read a chapter from the "Book of Fred"...
When a customer places an order with Amazon, a process much like the process of how an Express package is routed is undertaken by the Amazon computerized order fulfillment software. In Express, the powerpad automatically routes a shipment by a series of 'logic parameters', that steps through all available potential routing options. The initial potential routing chosen is if the shipment is intra-market (the ASTRA generates with the twin digit prefix that is unique to each of the Express market areas). Then if the shipment CANNOT be moved intra-market, then the next potential routing that involves only ground movement of volume (ramp to ramp, or ramp to hub via CTV). Everyone knows the ASTRA prefixes for these shipments, most often they are used on non overnight volume which is moving between large markets. The next routing alternative is whether the package can be moved through a regional hub. Finally, if all these alternatives are exhausted, routing through Memphis is done.
Amazon is going to use a similar system for filling its orders. When a customer places an order, their software will look at the customer's ZIP code and the shipping speed which the customer chose, then go through a series of logic parameters to determine if a distribution center near the customer can fulfill the order (and get it to the customer in the time parameter chosen). If the software determines that the order can be filled by a local distribution center (and meet the time parameter), the local center will pack and ship the order. If the local center doesn't have the particular item in stock, then the software will automatically look for the next nearest center and determine if the order can be shipped and arrive in the time parameter determined by the customer. This process of checking and verifying is continued until the order can be filled.
By building these regional distribution centers, Amazon will be able to use ground methods of shipping their products more and more, and STILL meet the 2 day time parameter of their "Amazon Prime" option. Their computerized inventory control determines what market demand for a particular product is, and whether it is cost efficient to have a particular product stocked in a regional distribution center, or whether to just keep it in one of the current 'mega' distribution centers. As market demand for a product fluctuates, where to warehouse inventory can be adjusted to be most cost efficient.
So yes, volume is going to be pulled off of Express, and placed onto Ground, BUT FedEx isn't the one doing the shifting, it is Amazon. The process will be gradual (with the completion and stocking of the regional distribution centers), but there will indeed be a slow, deliberate removal of volume off of Express and onto other more cost efficient methods of delivering.
The other kicker is that Amazon is already using regional delivery options (OnTrac is a common one in the western US)
OnTrac Shipping - Overnight Delivery for Less in CA, AZ, NV, OR, WA, UT, CO & ID
These services charge less than FedEx would even for ground service, and have acceptable on time performance. The Amazon software automatically prices shipping costs to their available shippers, and automatically chooses the cheapest alternative - thus why Amazon uses a variety of different shippers from a single location.
With the high cost of air cargo (due to fuel expense), more and more distributors of physical product are going to a regional (and some even state by state) method of inventory warehousing and distribution which can have orders shipped by ground methods of transportation. There is no sign of fuel costs going down (wrote about this a month or so ago), so corporations are adjusting to meet the 'new normal' in shipping expense. With the cost of fuel what it is, it is more cost effective for companies to have distribution centers 'spread out' across the US, instead of relying on less than a handful of centers to meet all market demand (utilizing air cargo to get product delivered to more distant locations on time).
There is a 'synergy' of forces combining to reduce utilization of air cargo - those who don't realize this fact at this date are either deluded or naive. You'd best be served in planning a line of work recognizing the changes which are afoot.
All part of Amazon's master plan and it's not done yet.
As mentioned regional carriers will have a lot to say in this long-term, they are even cheaper than Fedex Ground in all ways. I suppose another scam. I guess somewhere the difference between a good job and bad job is no longer just that, but it must be a scam to be that way.
As mentioned regional carriers will have a lot to say in this long-term, they are even cheaper than Fedex Ground in all ways. I suppose another scam. I guess somewhere the difference between a good job and bad job is no longer just that, but it must be a scam to be that way.
Now, now don't get too excited, most ISPs/ICs/drivers don's want to hear this but most amazon is going in smart post. no extra stops(to ISPs/ICs stops are king). This sucks for us in management as well, we want more packages and stops too. It's a pain to move one bag that's got 8 packages, and only get counted as one package.
Doc Sorting Dude
Well-Known Member
R1A, you mentioned you left Express some time ago. Your input is amazingly current' not just this thread but many others. You don't sound like any crr's here; but your explanation on Express operations and product knowledge is mind boggling. Just how high up the ladder were you at onetime? I don't know the whole story why you left....voluntary buyout?
I think Amazon is not going to be happy with Smartpost.
MrFedEx
Engorged Member
Amazon also uses the smaller low-ball carriers like OnTrac, which is at least one level below Ground, which puts it about mid-drop to the pile at the bottom of the outhouse.
Ricochet1a
Well-Known Member
Left in 2010 when I found a 'job' using the advanced degree I obtained while working part-time as a Courier. I considered that to be a 'starter' job for my career (looked at it as being a quasi-paid internship), and have moved to another job that pays very well and uses the skills I have to the utmost.
LMAO!!!! No, I don't 'sound' a lot like any of the other Couriers here... When I hired into Express (went into AGFS ramp location), Fred got a hell of a lot more than he bargained for. My original intent way back then, was to quickly move into management, then (ahem...), become what I have since referred to as a "Memphoid" (didn't have a clue as to the reality of FedEx Express at that time). I knew people professionally who were with Express for a number of years before I hired on, and they encouraged me (knowing my skill set), to come in, learn the operation and move on up the chain (they were in Memphis).
This was in the mid part of the last decade and their (the people I already knew in Express/Memphis) insight as to the conditions in operations (especially in AGFS) was a bit off. Things had changed. Their experience in wage level operations was in the late 80's to mid 90's, and they hadn't really kept up with the changes in conditions OR in pay progression. Things were going well for them, so they assumed that things were no different for the wage employees (which many of them had been at one time). Ignorance can be bliss...
When I told them what I was experiencing, they initially thought I was exaggerating a bit - I wasn't. They knew me along with my physical capability, and quickly came to learn about how the company they hired into (Federal Express), was transforming into something they didn't quite recognize (FedEx Express). When the Defined Benefit Pension Plan was pulled back in 2008, that is when they had their "eyes opened" (it affected them in a BIG way), and thus started their and my futile (it has been a learning process) campaign to try to get the Couriers to organize to prevent the downslide of Express as a CAREER. Their 'motivated self interest' was if the Couriers got organized and restored the DBPP for themselves, then Express would have to do the same for the salaried employees or face a real problem.
I transferred into a station before the DBPP was pulled - knowing that there was no way in hell I was going to make a career with Express. I was in a situation where I needed the insurance, so having a 'bushel of lemons' in front of me (working for Express), I decided to head back to get my Graduate Degree, and work as a part-time Courier (went ahead and made some lemonade). While doing this, I made more and more contacts with people, all of whom recognized that Express was changing (deliberately) and it wasn't for the benefit of the employees. When the DBPP was yanked, that is when 'it all started' as far as my (and others) attempt to get the Couriers to organize in an effort to put a halt to the crap which was rolling down. I stumbled onto the Examiner website then this one in early 2009 and started posting.
Information was given to me about the direction of Express as far as BUSINESS plans (not necessarily translating into OPERATIONAL plans), and I revealed as much as I could. The only variance between what was given to me as far as business plans and what has actually transpired in the past 4 years operationally, is the PACE at which the change is being conducted. FedEx is taking it real SLOW. Looking back, this was and is the best move for FedEx (from a corporation's standpoint), since the change has been so gradual (yet very deliberate), that most don't recognize what is going on around them. If FedEx moved at the pace which I and others believed would happen back in 2009 - the employees may have just pulled their heads out of their asses and done something.
As a side note, many of the business plans (I saw) were drawn up anticipating Express losing their RLA status and subsequently having the IBT enter in a BIG WAY in 2010. This is why FedEx fought SO HARD to keep its RLA status (spent at least $40 million in lobbying alone, would've spent MUCH more if they had to). It is also why Express had the contingency plans of shifting volume over to Ground should Express organize (to prevent having work done by higher compensated Express wage employees). Those plans still exist, FedEx is just taking their time in implementing them. For those who can remember, the performance of the Ground contractors wasn't quite stellar in the last half of the last decade and the shifting of volume should the Couriers have organized was seen as the best option from a variety of 'poor options' (from FedEx's standpoint).
This (contractors' performance) has CHANGED (Fred dropped the hammer). Right now, volume shifting is already going on, the customers are the ones doing the shifting right now. Since the profit margin on this volume is HIGHER for FedEx with it moving through Ground as opposed to Express, FedEx likes it a lot. So much in fact that eventually the delivery of ALL non-overnight volume will be shifted over to Ground. FedEx is reorganizing from the 'top-down' right now (spending big bucks on getting rid of salaried employees which will no longer be needed in the 'new' Express). The whole 'key' to the final transformation of Express on the operational side is DRA - that is going to be the game changer and the death knell of the 'career Courier' (the career Courier ended about 10 years ago - any hired in during the past 10 years are barely above entry level wage).
Strictly as a wage employee, although I knew and know MANY that are in salaried positions in Memphis along with a handful of people in operations (Sr. Managers and engineers), who recognized the transformation of Express as being something THEY didn't want to happen (they were like-minded as I). They are who fed me much of the information I posted (they knew I posted here, they read my postings to make sure I wasn't 'outing' them in some way).
I spent a very short amount of time as a handler (kicked my butt), took a DG position when it opened, was talked into taking a Team Leader position by a VERY good individual who was an operational manager at the time (he hired in during the 80's, damn good guy). He got fed up with Express and left soon afterward (he was fed up with the direction things were taking, so he completed his bachelors degree and hit the door).
I became a Ramp Agent, then realizing that everything I saw and was being told about Express was NOT favorable, I made the decision to go ahead and get my Graduate Degree (I was really hesitant to do so, I didn't look forward to splitting my time between having to work part-time to maintain insurance and going to school) and took a Courier position that 'fit' the needs of my going to school while working. During the process, I made more and more contacts with people (including organized labor) and did what I could at station level to get rep cards out.
I had this crazy hope that enough Couriers would either do likewise (all acting independently of each other), or establish a network to get Courier organizers in enough stations to overcome the RLA obstacle and pull off organizing the Couriers - as we all know, didn't and won't happen. I continued to post on and off (getting ready to quit though, it is obvious that nothing is going to happen at this stage), after I left Express to try to get some semblance of organization among the Couriers out there who happen across this forum, to get them to organize - primarily, organize THEMSELVES into a network which could overcome the RLA.
There is no organization out there (grassroots) to my knowledge - if there was a real grassroots organization out there which could pull off getting Courier organizers in 400+ stations, I would know about it. There are posters here which state that they have made attempts to get rep cards out in the stations which they work, I congratulate them on their efforts. Under NLRA rules, this would be a viable start;. under RLA rules, it is pissing in the wind.
Given the fact that the IBT has taken the Couriers to be DOA, there won't be any organizing happening until and unless the Couriers who post and lurk this forum realize that they will need to become part of a network, work on their own time to recruit Couriers in nearby stations (to where they work), and have the process continue until that critical mass of 400+ Courier organizers (all in separate stations), is working to get out rep cards. THEN, there may be a real chance of getting the IBT to change its assessment on the Express Couriers, and start doing something. I don't see that happening at this point.
If everything that has happened in the past 4 years hasn't motivated enough Couriers to do something (and especially in the last 2 months), virtually nothing will short of Fred coming out and actually shifting the delivery of all non-overnight volume over to Ground. This would get the complacent full-time Courier to finally realize that the game is up, and they had better do something. However knowing Fred's actions, he won't pull something like that until his "Ace" is ready to pull out of his sleeve - DRA....
At that point, it will be checkmate (or time to 'fold' if the Ace analogy is used) for the full-time Couriers and Fred will have realized his master plan.
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Ricochet1a
Well-Known Member
For their shipments to non-Amazon Prime members, they are quite happy with it.
For Amazon Prime members, they use FedEx Express or Ground or UPS, or if they can get away with it, a regional carrier.
Right, which is what is pulling all of Fedex down. You have UPS as the Cadillac, they are bound to their union, but they also become much more efficient and they had the volume which makes it all work out. It's now a fight at the bottom and you are being pulled into it. Fedex in someway saying, they can't compete at the top-end they have to compete with the regionals.
