FedEx To Actually Purchase New Vehicles

[MrFedEx]

This will probably drop a turd in bbsam's glass of Kool-Aid, but FedEx is actually going to buy some new trucks this coming year. The larger implication is that FedEx Express business won't be shifted over to Ground, at least any time soon. MT3 did also say that we were going to be doing a lot of leasing/rentals, so maybe Memphis is still hoping and praying they can kill-off the legal issues surrounding Ground.

 

[bbsam]

I think you've got my position wrong. I'm rather ambivalent on the subject of diverting Express packages to Ground. We're doing quite fine volume wise. My point is that if they start to do so, then so be it, I'll be happy to take that revenue as well.

 

[Myort]

I don't think they will ever actually shift the volume over per say. Think of it more like customers will use Ground over Express and Ground will be able to guarantee it there in 2 to 3 days much cheaper. A good section of the eastern U.S. can ship something and have it there in 2 days via ground.

From what I have heard, the smaller stations will be going to an all leased fleet of trucks. There trucks will be shifted to the larger stations. The company that provides the vehicles will also provide mx. on the vehicles. I was told that these stations that are going to this system already had to contract out mx.

 

[MrFedEx]

I don't think they will ever actually shift the volume over per say. Think of it more like customers will use Ground over Express and Ground will be able to guarantee it there in 2 to 3 days much cheaper. A good section of the eastern U.S. can ship something and have it there in 2 days via ground.

From what I have heard, the smaller stations will be going to an all leased fleet of trucks. There trucks will be shifted to the larger stations. The company that provides the vehicles will also provide mx. on the vehicles. I was told that these stations that are going to this system already had to contract out mx.

Interesting. That means that FedEx is essentially outsourcing vehicle mechanics in smaller stations by having all-rental fleets and maintenance. Wonder how the Vehicle Mechanics feel about this. The apologists will soon be on here saying that it "makes sense to consolidate" or some other garbage, but what FedEx has apparently done is to send FedEx work out to a Third Party. I wonder how long it will be until they outsource RTD's?

Contracted-out or not, I smell a trend.

 

[bbsam]

On the Ground side in the ISP transition negotiations I plan to negotiate 5 year leases on trucks and keep them coming every 5 years. Seriously, the cost of maintenance past 6 years simply isn't sustainable especially with the increases in parts and labor.

 

[vantexan]

We got 6 new Econolines about 6 weeks ago. I think the real news is the Sprinter is being phased out.

 

[MrFedEx]

We got 6 new Econolines about 6 weeks ago. I think the real news is the Sprinter is being phased out.

No loss there. Actually, I'm thinking that FedEx isn't going to be buying as many diesel vehicles because the 2011(diesel) models cost about $8,000 to $10,000 more than before due to stricter emission regs and expensive solutions. Gas-powered vehicles are making a comeback in the local delivery marketplace as a result. A stretch Econoline probably doesn't hold that much less than a Sprinter and probably won't break down nearly as often.

 

[vantexan]

No loss there. Actually, I'm thinking that FedEx isn't going to be buying as many diesel vehicles because the 2011(diesel) models cost about $8,000 to $10,000 more than before due to stricter emission regs and expensive solutions. Gas-powered vehicles are making a comeback in the local delivery marketplace as a result. A stretch Econoline probably doesn't hold that much less than a Sprinter and probably won't break down nearly as often.

If Ford puts their new Ecoboost V-6 in the Econoline it would get as good if not better mileage than the Sprinter. As is these new Econolines have great seats, even a right side armrest. But the Sprinter is easier to work out of.

 

[quadro]

Interesting. That means that FedEx is essentially outsourcing vehicle mechanics in smaller stations by having all-rental fleets and maintenance. Wonder how the Vehicle Mechanics feel about this. The apologists will soon be on here saying that it "makes sense to consolidate" or some other garbage, but what FedEx has apparently done is to send FedEx work out to a Third Party. I wonder how long it will be until they outsource RTD's?

Contracted-out or not, I smell a trend.

Vehicle maintenance at many small stations has been outsourced for years. The first small station I was at 20 years ago didn't have a vehicle mechanic so this is nothing new. Just to clarify, though, when I say small station, I'm talking about stations that are not in a major metro area and are many miles from the next FedEx station. Also, from what I heard, similar to what Myort said, not all vehicles are being replaced with leases at small locations. I heard that it was being done to minimize rentals at large locations and have FedEx vehicles moved from small (where they aren't worked on by FedEx mechanics anyway) to the large stations.

 

[FedEx2000]

Outsourced vehicle maintenance is nothing new, in small locations that don't have enough vehicles to keep a mechanic busy they have been outsourced since before I started working here. Used to deliver the parts to the vendor that did the repairs. Also, in regards to the original post, yes we are purchasing 1,700 new vehicles this year at a cost of $100M, about $58k each. Next few years the plan is to spend about $300M-$400M each year on new trucks, depending on the economy/volume levels.

 

[MrFedEx]

Outsourced vehicle maintenance is nothing new, in small locations that don't have enough vehicles to keep a mechanic busy they have been outsourced since before I started working here. Used to deliver the parts to the vendor that did the repairs. Also, in regards to the original post, yes we are purchasing 1,700 new vehicles this year at a cost of $100M, about $58k each. Next few years the plan is to spend about $300M-$400M each year on new trucks, depending on the economy/volume levels.

I've seen outsourcing too, even at medium-size locations where they couldn't find a mechanic. My concern is that FedEx will start outsourcing more functions.

 

[bbsam]

If it's cheaper with satisfactory results, yes

 

[MrFedEx]

If it's cheaper with satisfactory results, yes

Sorry, but no. If it's cheaper to outsource your contract to an operator headquartered in Mumbai who has Indian nationals as drivers (with green cards) and there are satisfactory results, is that OK? You speak very good Mercenary, an obscure language with which Fred S is very familiar.

Here's my main point. Listen up, apologistas. FedEx and Fred S don't give a crap about you, your health, your family, or anything else about you....except your labor. It's all about the money, and if they can get a trained chimp to do your job for less, you are gone. If you get hurt, your worth is also zero.

Please continue to worship and revere both the company and the man. In short, continue being stupid.

 

[bbsam]

Welcome to capitalism.

 

[MrFedEx]

Welcome to capitalism.

Is that unrestrained laissez faire capitalism or capitalism with a modicum of responsibility? I guess that means that Mr. Mumbai can take away your contract when Fred throws you under the bus to save a few rupees, because I figure your choice is "no restraints". The "Free Market" is a fallacy. Just look at all of the special deals cut for big industry. Is that the free market at work when ADM gets to purchase corn for less than the cost of production due to subsidies?

 

[bbsam]

Again with the "under the bus" scare rhetoric?

 

[MrFedEx]

Again with the "under the bus" scare rhetoric?

Whatever on the rhetoric. Answer the question about the "free market", because it isn't free by any means. Fred's exemption is just one of the many reasons it's not. Another is the farm subsidies I mentioned. Could you or I enter the "free market" and have the same chance of success as a Smith, a Monsanto, or ADM? No, because the market is rigged for those who already have the money and power. That would be the Smiths of the world.

 

[bbsam]

I have said nothing of a "free market". My post was "Welcome to capitalism." I don't say it's fair. I don't say it's not rigged. Simply that it "is". I understand that you would like things to be different, but they aren't. History shows that money and power rule no matter what the political structure. Democracies, kingdoms, feudalist societies, communists; all of them are truly ruled by money and power and all of those in power strive to stay in power. I understand that western democracies are supposed to be different. I just don't think that they are that different.

 

[MrFedEx]

I have said nothing of a "free market". My post was "Welcome to capitalism." I don't say it's fair. I don't say it's not rigged. Simply that it "is". I understand that you would like things to be different, but they aren't. History shows that money and power rule no matter what the political structure. Democracies, kingdoms, feudalist societies, communists; all of them are truly ruled by money and power and all of those in power strive to stay in power. I understand that western democracies are supposed to be different. I just don't think that they are that different.

OK, then you agree with me that Fred is a beneficiary of a system rigged in his favor. Thank you.

 

[UpstateNYUPSer(Ret)]

OK, then you agree with me that Fred is a beneficiary of a system rigged in his favor. Thank you.

It may be more accurate to say that Fred knows how to play (or pay) the system.