Home
Forums
New posts
Search forums
What's new
New posts
Latest activity
Members
Current visitors
Log in
Register
What's new
Search
Search
Search titles only
By:
New posts
Search forums
Menu
Log in
Register
Install the app
Install
Home
Forums
The Competition
FedEx Discussions
FedEx 3Q earnings tumble 75%
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="Ricochet1a" data-source="post: 547159" data-attributes="member: 22880"><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">When it comes to jets, FedEx operates 352 aircraft, and UPS operates 208 aircraft. The specific numbers are as follows (excluding props operated by contractors):</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">UPS ..................FedEx</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">747-400: 8....... MD11: 57</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">747-400BCF: 2 .MD10: 64</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">MD11: 38......... A300: 63</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">767: 32 ............A310: 66</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">A300: 53.......... 757: 22</span></span></p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">757: 75............ 727: 80</span></span></p><p> </p><p><span style="font-size: 12px"><span style="font-family: 'Calibri'">With the exception of the FedEx 727’s, the fleets are comparable in capability and efficiency in fuel use per cargo ton/mile. The last time I checked (been awhile) the typical cargo aircraft flew just under 80 hours a week, or about 4,000 hours a year. Operating cost per flight hour does vary, but falls between $7,000/hr to $10,000/hr (fuel, maintenance, depreciation, crew). That places the annual operating cost of a cargo aircraft in the ballpark of $30-40 million a year, not $100,000,000. The 747’s may approach $100 million a year in operating costs, but I think the real figure for them is between the $40 million and the $100 million you state (closer to $40 than $100 M). </span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">The 727s are inefficient, but I have to assume that they are a fully depreciated asset, reducing the cost to operate to: fuel, maintenance and aircrew costs. The variance between FedEx and UPS on this is most likely really small, since this is the MAJOR cost incurred by both companies for “air” cargo. I have no familiarity with the UPS air routing system, but I’d have to assume that UPS has to have a greater number of aircraft service two ramps before going to the hub. FedEx does have aircraft make two ramp “stops” before hitting the regional hubs, but this is limited to the greatest extent possible. When you state that UPS uses fewer planes to cover more volume, those fewer numbers have to make more landings on route back to the hub. Every landing costs money. The majority of FedEx aircraft serve a single ramp, they fly to the hubs without making stops en route for additional cargo (majority, not all). </span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">UPS has 2,908 pilots for 208 aircraft, or just under 7 crews for each aircraft. FedEx has 4,678 pilots for 352 aircraft, or 6.6 crews per aircraft. This data is current as of today. </span></span></p><p> </p><p><span style="font-family: 'Calibri'"><span style="font-size: 12px">If UPS had a significant advantage in the line haul system for air cargo, FedEx would be out of business in short order. I’m going to go out on a limb and state that the costs per ton/mile for UPS and FedEx are within a few percentage points of each other. FedEx makes it profit on the margin on International air (just under 50% of total revenues). The margin on docs (UPS flats) is also very good for FedEx. Combined with the contract with the USPS, FedEx is able to keep its aircraft operating without any voided positions in the aircraft in most flights. </span></span></p><p> </p><p><span style="font-family: 'Calibri'">If one were to compare UPS Air rates to Express rates for similar services, the variation is extremely small. Where FedEx gets its advantage is through its lower labor costs.</span></p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 547159, member: 22880"] [FONT=Calibri][SIZE=3]When it comes to jets, FedEx operates 352 aircraft, and UPS operates 208 aircraft. The specific numbers are as follows (excluding props operated by contractors):[/SIZE][/FONT] [FONT=Calibri][SIZE=3]UPS ..................FedEx[/SIZE][/FONT] [FONT=Calibri][SIZE=3]747-400: 8....... MD11: 57[/SIZE][/FONT] [FONT=Calibri][SIZE=3]747-400BCF: 2 .MD10: 64[/SIZE][/FONT] [FONT=Calibri][SIZE=3]MD11: 38......... A300: 63[/SIZE][/FONT] [FONT=Calibri][SIZE=3]767: 32 ............A310: 66[/SIZE][/FONT] [FONT=Calibri][SIZE=3]A300: 53.......... 757: 22[/SIZE][/FONT] [FONT=Calibri][SIZE=3]757: 75............ 727: 80[/SIZE][/FONT] [SIZE=3][FONT=Calibri]With the exception of the FedEx 727’s, the fleets are comparable in capability and efficiency in fuel use per cargo ton/mile. The last time I checked (been awhile) the typical cargo aircraft flew just under 80 hours a week, or about 4,000 hours a year. Operating cost per flight hour does vary, but falls between $7,000/hr to $10,000/hr (fuel, maintenance, depreciation, crew). That places the annual operating cost of a cargo aircraft in the ballpark of $30-40 million a year, not $100,000,000. The 747’s may approach $100 million a year in operating costs, but I think the real figure for them is between the $40 million and the $100 million you state (closer to $40 than $100 M). [/FONT][/SIZE] [FONT=Calibri][SIZE=3]The 727s are inefficient, but I have to assume that they are a fully depreciated asset, reducing the cost to operate to: fuel, maintenance and aircrew costs. The variance between FedEx and UPS on this is most likely really small, since this is the MAJOR cost incurred by both companies for “air” cargo. I have no familiarity with the UPS air routing system, but I’d have to assume that UPS has to have a greater number of aircraft service two ramps before going to the hub. FedEx does have aircraft make two ramp “stops” before hitting the regional hubs, but this is limited to the greatest extent possible. When you state that UPS uses fewer planes to cover more volume, those fewer numbers have to make more landings on route back to the hub. Every landing costs money. The majority of FedEx aircraft serve a single ramp, they fly to the hubs without making stops en route for additional cargo (majority, not all). [/SIZE][/FONT] [FONT=Calibri][SIZE=3]UPS has 2,908 pilots for 208 aircraft, or just under 7 crews for each aircraft. FedEx has 4,678 pilots for 352 aircraft, or 6.6 crews per aircraft. This data is current as of today. [/SIZE][/FONT] [FONT=Calibri][SIZE=3]If UPS had a significant advantage in the line haul system for air cargo, FedEx would be out of business in short order. I’m going to go out on a limb and state that the costs per ton/mile for UPS and FedEx are within a few percentage points of each other. FedEx makes it profit on the margin on International air (just under 50% of total revenues). The margin on docs (UPS flats) is also very good for FedEx. Combined with the contract with the USPS, FedEx is able to keep its aircraft operating without any voided positions in the aircraft in most flights. [/SIZE][/FONT] [FONT=Calibri]If one were to compare UPS Air rates to Express rates for similar services, the variation is extremely small. Where FedEx gets its advantage is through its lower labor costs.[/FONT] [/QUOTE]
Insert quotes…
Verification
Post reply
Home
Forums
The Competition
FedEx Discussions
FedEx 3Q earnings tumble 75%
Top