First, volume (express saver), is not shifting according to Distmgr.
And you believed him? District and Senior Managers have been told to flat out LIE, if they are asked a question about impending operational changes which may, "Create undue alarm and distress among wage employees". The plan exists, it is just waiting for Express to put it in the line up of operational changes.
Many areas are just not logistically efficient to truck. We were told that this product would be able to compete with ground given the logistics and time involved.
Now I know he was lying to you. Express Saver CANNOT compete with Ground product. The only reason Express still has it is that shippers on the two coasts want the option of 3rd day delivery that Ground cannot possibly meet. That is the only reason it still exists. Express doesn't want to 'surrender' those customers to UPS by terminating Express Saver, but it also doesn't want to carry that volume given the revenue that 3rd day generates.
Here's a 'clip' from Dow Jones Newswire about the news today (BC doesn't want full article inclusions)
FedEx, which pioneered overnight air delivery in the early 1970s, acknowledged it has been carrying too many low-margin, deferred packages on its expensive-to-operate priority air network. It said Wednesday (that's today, March 20, 2013)
that it plans to ground some of its express flights and shift more nonpriority volume to lower-cost parts of its delivery network, such as FedEx Trade Networks, its unit that arranges third-party transportation for shippers, including using oceangoing freighters.
They didn't mention Ground here (because FedEx doesn't want to let the cat completely out of the bag), but the decision has been made -
shift more nonpriority volume to lower-cost parts of its delivery network....
The writing has been on the wall for a long time now. The Express Couriers need to snap out of their seemingly never ending state of denial and face what Express is being molded into.
they let out a huge stink bomb today..stock down almost 10%..analysts are crying in their beer..They blew it.they shouldve been more aggressive with the new reductions and I wouldnt be surprised if heads will roll ..look for express saver to go away soon if that is the plan..they cant let the investors down two qtrs in a row.way to go fred ..
I think it was closer to 7% drop, closing at just under $100/share.
No, a high turn over is not what they want. They would have nothing to gain by having a revolving door for its employees.
Oh how wrong you are.
It costs Express about $4000 to currently recruit, perform background checks and train a new Courier. It takes about 3 months for that Courier to get to a point where their productivity is acceptable, if not comparable to 'fully seasoned' Couriers.
If Express had to undergo a 'rush' recruitment of Couriers to replace striking Couriers, the cost would increase dramatically.
If that new Courier is making $5/hr less than the Courier they replaced, how long does it take for Express to hit the "break even point'? Let's assume that they are part-time to boot (fewer hours worked, so longer to hit that break even point).
It would take 800 hours to recoup the expense of recruitment, background checks and training. For the 3 months it takes this Courier to come up to an acceptable level of productivity (I'm going to throw out 75% of 'goal' as being acceptable - getting to the 100% point will take another couple of months - I'm being REAL generous in allowing this Courier to come up to speed SLOWLY), the 'loss' to Express in terms of productivity would be equivalent of about 5 hours a week for that 12 week period of time.
HOWEVER...
Since this Courier is being paid $5/hr LESS than the Courier they replaced, the actual 'cost' to Express for this lost productivity, is ZERO. If one hires a replacement that is only 75% as productive as their predecessor, BUT they are also paid only 75% as much - there is NO LOSS to the company 'working' the lower cost worker. But then when this 'replacement' Courier does get their productivity up to that of a 'seasoned Courier', the savings to Express in terms of labor costs are pure profit margin.
Look at what a low progression Courier now makes compare to a topped out Courier - and they are both held to the same standard of productivity. Express is making serious 'bank' on that low progression Courier.
So.... this leaves the only cost to recover as being the initial training expense - which is recouped with 800 hours of work - or about 10 months time for a part-time employee (it is half that time for a full-time employee).
Express just LOVES high turnover for Couriers. Internally, Express management has stated that they see the future of the Courier job position as "Something that someone holds for about 5 years then either progresses in the company or leaves".
They would have high costs in hiring and training, loss in revenue due to lower service levels and possible loss of business. It does not look good to customers and investors to have no longevity and loyalty in its workforce.
High costs in hiring and training - DISPROVED
Loss in revenue.... I think you have an inflated sense of just how important you are
as an individual to your employer.
Customer and Investors caring about 'longevity and loyalty"..... Investors DON'T CARE about wage employee loyalty - all they care about is PROFIT. If employees aren't 'loyal', the issue falls on company management to get productivity out of them regardless of what the employee may be thinking in their head.
The old days of Federal Express are long past. The old timers here know what that company was like and lament its passing. You are now working as part of FedEx Corporation - where the corporation is going to cash in on the brand of 'FedEx' and reel in the profits while the wage employees in particular take it in the shorts.
