As a former shipping manager, if I shipped something thinking it was being carried by Express, then it was delivered by ground, I would expect a heck of a lot bigger discount on that package! With most ground employees making much less than most Express, grounds prices would have to drop substantially on XS/2D packages to justify the cost of XS/2D. It's up to us to make customers aware of this in the event of the big shift. I have one large customer who recieves about 40 Express a day, and about 10 ground. They hate ground and would switch to UPS in a heartbeat should that happen.
Do you think customers really care if the individual delivering a package is driving a truck that states in little letters under the huge FedEx.... Express? Come on....
What difference does it make to a customer whoever steps out of a truck that says FedEx on the side of it to deliver their package, as long as it gets delivered by the time that was specified when it was shipped? I'll address the exception below...
Who delivers the package makes no difference in the price charged. When customers pay for Express, they are paying to have it at its location by a time certain not by a Courier/driver specific. How it gets there is irrelevant. When they pay for Ground, they pay to get it there, but whether it is a day before or a day after the expected delivery date isn't important.
The only real issue for customers is the issue of tag alongs. Customers that receive regular priority overnight volume are used to getting their non-overnight volume delivered as part of that one early AM stop - thus tag alongs. If FedEx decides to eventually "outsource" the delivery of non-overnight volume, then customers will be receiving two separate deliveries each day (assuming they have a mixture of overnight and non-overnight incoming volume each day). This will tick off a lot of customers (who are used to receiving non-overnight volume in the early AM along with their few pieces of priority volume).
I think this, more than anything, is what is holding up FedEx from pulling the trigger - high volume customers are used to getting EVERYTHING delivered in the early AM. When I was doing it, I pissed off quite a few customers who were used to jacking me around with waiting to sign for shipments. I then only offered up the overnight volume for them to sign for in the AM, and stated that I'll be back in the afternoon to get off the non-overnight volume for them to sign for - since I didn't have the time to wait around for them to make up their minds when they are going to sign and let me get out of there. It pissed them off, but they got the message - and I was able to make my P1 committment and not cool my heels for 10 minutes waiting for a damn signature at 10AM.
The fear for FedEx becomes one of having irate shipping managers calling FedEx asking, "Where are my shipments, they were usually delivered in the morning with the rest of my "Express" incoming volume?". That is what might be a tad difficult to explain to people who have been used to getting their 2nd day volume delivered at 10AM instead of delivered separately at 2PM. It can be done (it was done in my case to prove a point), but FedEx doesn't like getting high revenue customers upset.
However, all of this must be taken into context when the business plan first came to prominence - 2009.
When it looked like FedEx was going to lose its RLA status in 2009, FedEx went into major panic mode. They were literally panicing in Memphis over the prospect of losing the RLA status, and having one-third of the stations having certification votes and subsequently certifying union representation. This is when FedEx went into major cost cutting mode for those that can remember back 2.5 years ago. Even with having gutted the defined benefit pension plan a year earlier, FedEx would've been placed into a serious cash flow crunch if they had to agree to sign labor contracts at a significant number of stations or be forced into the position of having regional lockouts and trying to lure the Ground "contractors" to cross picket lines to move Express volume.
This is when the business plan came to prominence - shift the delivery of non-overnight volume directly to Ground. If Express could do this, then implementing lockouts at the stations that were attempting to collectively bargain would've been much easier. You don't have drivers cross a picket line, you don't bring the volume - at least the non-overnight volume - across a picket line to begin with (you take it directly to a ground terminal for delivery). From a purely business perspective, it was brilliant.
If FedEx would've lost its RLA status in 2009, FedEx would've pulled the trigger and immediately eliminated (or at least tried) the majority of full-time Courier positions and gone to a part-time Courier force whose only deliveriers would've been overnight volume (easily accomplished by a part-time force). It would've gotten ugly, Couriers at a significant number of stations having voted to certify union representation under NLRA rules (local level certification), and FedEx dealing with the negative PR of striking Couriers and RTDs while trying to reassure their customers, "All is well".
Fast forward to February 2012. There is still cost advantages to shifting the delivery of non-overnight volume over to Ground, but the threat of unionization within Express is now completely eliminated. I haven't pulled up the legislation to read myself, but the indications are that the change in the requirements to hold a certification election from 35% of craft to 50% of craft having signed rep cards has eliminated ANY possibility of even a vote being held. You'd need to have a majority of Couriers right now - nationwide - ready to strike no matter what, to even begin to have a chance for a certification election. On a nationwide basis, most Couriers complain like heck about their compensation, but they aren't willing to do anything about it - they complain, they dream, they even make occasional threats, but they won't sign union representation cards - they chow down on that turd sandwich with a look of disgust, but they still chow down.
FedEx may indeed decide to shift the delivery over to Ground - but now, the real impetus to do so has been eliminated. Fred is secure in the fact that not only does he still have RLA classification, but now it will take 50% of craft to sign rep cards to even have an election - not the previous 35%.
When the economy does improve, FedEx will indeed have to sweeten the compensation for Ground drivers to keep turn over there within managable levels (and service issues related to high turnover minimized). This will start to narrow the gap between Express and Ground compensation (in the end, you all will most likely be compensated rather closely, with Express wage stagnation an established fact and Ground gradually raising their compensation levels to keep turnover down).
So if you are worried about losing your full time job as a Courier at Express, actually those fears now (given the recent legislative victories by Express) are misplaced. You are a wage slave - and will always be so (for those with less than 12 years in). The Walmart-ization of America continues. Your only real solution is to get out of Express.
