And even more rampant speculation

Discussion in 'FedEx Discussions' started by 59 Dano, May 29, 2012.

  1. 59 Dano

    59 Dano Well-Known Member

    Stock analysts expect big changes at Express, including but not limited to:

    *changes in air feet size and composition
    *reducing headcount via attrition and voluntary severance (read: buyouts)

    The goal is to boost Express profit margins up to 10% from just over 5%. The big mystery is the "rationalization of the Express network" that the analyst refers to. Hmmm. Pulling out of any areas, perhaps?

    If they can achieve and maintain 10% margins in this economic climate, they will be rolling in the money when the economy eventually recovers.

    The full story: Analysts: Expect FedEx Express to restructure its business by this fall The Commercial Appeal
     
  2. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Couldn't "rationalization of the Express market" also mean using the improved transit times of your Ground network to move Express work or to shift work over to Ground?
     
  3. gman042

    gman042 Been around the block a few times

    That would mean that Fedex would have to change it labor classification from RLA to NLRA. Since they are treated as an airline by the government, even though the majority of their volume moves by ground, they would lose their edge over companies that do the same kind of work(UPS). If somehow packages that are moved through the air by plane make it onto a truck that supposedly only carries ground that would void their agreement with the government.
     
  4. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Then please explain their plan to move P2 over to Ground.
     
  5. Rhoderunner

    Rhoderunner Active Member

    Void their agreement ???? Fred has bought and paid for his exemptions and classifications.
     
  6. bbsam

    bbsam Moderator Staff Member

    Certain Express areas could be covered by contract labor. Nothing illegal about that.
     
  7. Ricochet1a

    Ricochet1a New Member

    Depends on how the "contract labor" is done. Express just can't use the same model as FedEx uses for Ground - staying under the RLA wouldn't pass the laugh test if they started contracting out delivery and pickup operations. If they utilize a cartage agent model, then they can get away with virtually anything.

    There is indeed a massive change brewing at this moment. It does appear that the "rampant speculation" possibly had some basis in fact. From what is coming through to me, a great big "I told you so" is shaping up by late September of this year. In addition, they are pushing HARD to get ROADS brought up to full potential with delivery manifesting by September.

    The dots are beginning to align themselves.
     
  8. bbsam

    bbsam Moderator Staff Member

    I must say, for the most part they have been able to keep it pretty damn quiet.
     
  9. Mr. 7

    Mr. 7 The monkey on the left.

    C'mon BB,
    No updated info. on the supposed 28% increase in volume for Ground on July 1?
     
  10. bbsam

    bbsam Moderator Staff Member

    Nope. We have been busier than past year at this time but nowhere near 28% and every time I ask about it I get very short answers saying, "haven't heard any more."
     
  11. vantexan

    vantexan Well-Known Member

    I wonder if FedEx might stop Express delivery to very rural, low population areas. Shipper looks on website, sees options of either Ground delivery only for that Zip Code, plus location of nearest hold-at-location for pickup for overnight service.
     
  12. 59 Dano

    59 Dano Well-Known Member

    The latest scuttlebutt is that some stations may be eliminated. No word on if they'll be consolidated as they have been in the past or if the areas that they presently serve will undergo some radical changes. Another theory is that the actions taken by FedEx will be similar to those taken by UPS in 2009.
     
  13. Mr. 7

    Mr. 7 The monkey on the left.

    That sounds reasonable to me. I used to del. to a rural area and talked to the UPS driver in that area. (Everyone can correct with what I'm about to say) but, he mentioned that UPS will deliver some USPS products to really rural areas and vice-versa?
     
  14. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    This is untrue. USPS does our last leg deliveries on our SurePost and Basic packages in rural areas. We do not deliver USPS packages.
     
  15. SmithBarney

    SmithBarney Well-Known Member

    I doubt FedEx Express would want to pull out of areas, in fact they are opening up more rural areas to FO(first overnight service) just because
    customers are willing to pay $$ to get shipments delivered before 4pm(current commit time for Priority Overnight)
    So the last thing FedEx will want to do is pull out of areas, and "contractors" or Cartage agents for Express are no bargain.
     
  16. vantexan

    vantexan Well-Known Member

    Good point, had forgotten about rural FO. There are areas out west that are extremely remote with low populations. Was wondering about those. Most people in those areas would be fine with Ground service, if they even use us.
     
  17. whenIgetthere

    whenIgetthere Well-Known Member

    I wonder what percentage of customers who are using FO service are doing so reluctantly. I am sure more than a few have checked off the FO box on the new AB's, thinking it is like the old AB"s, where Priority is listed first in the left column, while FO is listed in the right column as a special service! Someone in Memphis either screwed up on that design, or did so with the intention of fooling customers who don't read the AB closely enough. If I pick up a package from a regular or on call, and FO is checked, I always ask now to make sure that's what they wanted. But the customers who leave them in the drop boxes, that's a different situation!
     
  18. I know that my station delivers what I assume is mostly overnight volume at least 200 miles away to a very low pop area. there's a few sprinter's worth of volume every day. people who live in big houses in the middle of nowhere like shipping overnight I guess.