From The Chairman: Fuel Prices

Discussion in 'FedEx Discussions' started by MrFedEx, Jan 24, 2015.

  1. MrFedEx

    MrFedEx Engorged Member

    Dear Team Members,

    As you know, fuel prices have dropped approximately 50% since 2013, and since our business is extremely fuel-intensive, this adds profit to our operation. And, as always, we will do what is right for our employees and reinvest most of this "bonus" profit back into our aircraft fleet, and the majority of the rest as dividends to our beloved stockholders. Since your upper management team is fully responsible for the world drop in fuel prices, we have decided to give ourselves raises, starting with myself, at 12%. Dave, Matt, and anyone else who matters will be receiving a similar hike in pay.

    Hourly employees, however, will receive no raise, and that's because lower fuel prices have also lowered your cost of living. In fact, we'll be implementing wage rollbacks because your are now severely overpaid. MT3 has been telling me that "Friday Pace" is now "Everyday Pace", and that's unacceptable. You will give me 110% effort every single day or you will be terminated...simple as that. It's only because I care so deeply that I'd do this.

    Consider all we do for you. FedEx has purchased thousands of new vehicles and dozens of new aircraft, all so we can build a solid future at the Express division. You get to experience FedEx pride every day whenever you drive a nice, new Sprinter or Nissan, or gaze up in the sky and see a new FedEx 777 streak past.

    With the precipitous drop in fuel prices, I'm making some bold moves.

    1. All of our "mothballed" MD10 and DC10 aircraft will be reactivated and take to the skies once again. Our new Boeings will be parked so we don't wear them out prematurely. We will lie and say that they all run on biofuels, when, in fact, they are huge polluters and fuel hogs. At todays fuel prices, screw the environment. We'll still be green on paper and in our ads.

    2. We will reduce your hourly wage by 10% effective 2-1-15 to adjust for your lowered cost of living.

    3. In addition, we will lower your wage another 5% and put those contributions into a FedEx Fuel program where you get to personally help pay for the fuel your FedEx vehicle uses.

    4. Your industry-leading benefits will have the deductibles doubled and co-pays tripled.

    5. The 401k match is cancelled effective immediately.

    6. FT minimum hours will be lowered to 30 and PT to 15.

    7. Code 43 wait time is eliminated.

    8. Customers will be charged an additional fuel surcharge to compensate me for all of the high fuel prices over the last several years.

    One of the advantages of being a weasel is that I have no conscience...I act strictly on the basis of my instinct to make money. I could care less about you or anyone else for that matter. It's all about me, and my ego. You see, at my level of wealth and power, it's all about getting more. There will never be enough for me. The world is my henhouse, and I'll take as many chickens as I please.

    The people I've killed? I don't care. The others who my employees have killed and/or injured through lack of safety or poor training? I don't care about them either. Even though Ground is about as safe as a Pakistani bus line, it makes me I don't care. I'll just buy myself more politicians, hire more attorneys, and tell more lies. It's my nature, and as the world's most powerful weasel, I'll continue to do what is best for me. I don't care about anyone but myself.

    So, if you were expecting anything from me following the fuel price reductions, you can forget about it.

    I despise all of you and would replace you with robots if I could.

    FedEx cares....bwhahahahahahahah!

    Your Lord and Master,

  2. FedExRookie

    FedExRookie Member

    Hate to be that guy, but it does not add to their profit.

    They have lowered the fuel surcharge as a result of the lower fuel prices. From an accounting standpoint this will drop revenue significantly. I believe FedEx earned 3% lower over peak compared to estimates as well.

    Don't be fooled, profits are still high and growing; however, revenue is down as a result of lower fuel prices.

    TL;DR Overall revenue is down, profits were are not affected.

    I bet during the next state of the station, good thing I left the company already, they will use the lower than expected revenue (which is just less money coming in for the fuel surcharge) to talk about how they need to cut back.
  3. MrFedEx

    MrFedEx Engorged Member

    Revenue is down? In fact, FedEx acknowledged in a Friday press release that they were enjoying a mild profit bump due to lower fuel prices. Where I live, gas is at 50% of what it was 2 years ago, and so is diesel. Jet-A is essentially a variation of diesel fuel, so they are saving huge money on fuel. FedEx probably has fuel options they purchased when prices were up, but now they can just buy on the open market. The fuel surcharge could never make-up a 50% drop.

    Read your Wall Street Journal.
  4. BigTex61

    BigTex61 Active Member

    I read also that all of the airlines will get a slight profit jump due to lower fuel costs. FedEx will certainly spin that somehow to mean cuts somewere.
  5. MrFedEx

    MrFedEx Engorged Member

    None of them are passing-on those lower costs to passengers. Fares will remain high. I always wondered how Fred got away with a fuel surcharge anyway. It isn't the customer's issue in the first place. imagine paying $125 to send a P1 box and then being tagged for a fuel surcharge on top of that. It's the nature of this type of business to burn lots of fuel.
  6. FedExRookie

    FedExRookie Member

    The fuel surcharge lags behind a few months, not sure how long off the top of my head, and I don't feel like searching.

    When fuel prices go back up, that small profit will be offset by the delay to raise the fuel surcharge. Will it balance out, most likely not, the profit may be even smaller or be a loss overall, depending on how fast fuel prices swing back up.

    Do you have a link to that particular WSJ article you are referencing?

    As for options, I am not sure on what hedges they have on fuel. I know SouthWest is eating money due to hedging, since the fuel has dropped.
  7. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Fuel surcharges are adjusted quarterly for the following quarter so, yes, there can be a revenue lag in the interim.
  8. Mr. 7

    Mr. 7 The monkey on the left.

    Doesn't matter. X and UPS just raised their rates approx. 5% across the board=more profit no matter what.
  9. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    We both expanded dimensional weight pricing which should really boost our respective bottom lines.
  10. STFXG

    STFXG Well-Known Member

    I can't wait for the huge raise I'll get when we start getting paid DIM weight for pickups and deliveries! :rolleyes:
  11. FedExRookie

    FedExRookie Member

    Mr. FedEx

    Revenue can be down while observing higher profits. ....

    Still waiting for that article you referenced.
  12. MrFedEx

    MrFedEx Engorged Member

    True. Express revenue is down, but profits are up, due to the lower fuel costs. It's unbelievable, but Fred is still charging customers the fuel surcharge.
  13. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    I thought the fuel surcharge could only be adjusted on a quarterly basis.