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Lead On... to the death of Expres...
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<blockquote data-quote="Ricochet1a" data-source="post: 990611" data-attributes="member: 22880"><p>Did some asking around among those who I KNOW are VERY familiar with rates between UPS and Ground - they've worked in FedEx Sales in the past. I was directed to the following two documents...</p><p></p><p>The current FedEx Ground rate Chart</p><p></p><p>The current UPS "Ground" rate chart </p><p></p><p>Spend just a few seconds comparing between the two (pull them up in separate tabs) - you will VERY QUICKLY notice there is absolutely NO VARIATION between the two. They are mirror images of each other. I couldn't find any difference between the two whatsoever - they are exact to the penny.</p><p></p><p>What FedEx Sales does, is to ask the potential customer: "What is the discount you are receiving for your UPS shipments?"</p><p></p><p>With that information in hand, all they have to do, is to knock off 10% from that, and give a quote that is less than UPS. Both UPS and FedEx obviously offer discounts from their ("THE") standard rate chart. FedEx will go the extra step and ask customers what discount they are receiving from UPS, then underbid that.</p><p></p><p>Everyone knows that FedEx Ground's cost structure is significantly lower from UPS's - YET they have the exact same published rate chart. This means that out of the gate, FedEx Ground is able to garner a higher margin on a particular shipment than UPS.</p><p></p><p>Because Ground has a lower cost structure (and identical rate chart to UPS), all FedEx has to do is find out the discount off of published rate that a customer is receiving from UPS, then offer an additional 10% off of that. If the customer isn't too picky about service levels (and other things), the lower EFFECTIVE rate quote of Ground will usually get the business. FedEx Ground is able to pick off the customers it really wants, by using this strategy.</p><p></p><p>Anyone in FedEx sales who states something to the contrary, is simply blowing smoke. This is how FedEx Ground is growing - and why Express is pushing its management to get the Couriers out there to beat the bushes for additional business - for GROUND. FedEx is in a situation of "absolute" competitive advantage. When this situation exists, companies make a dash to grab as much market share as they can, to increase the cash flow coming in (and profits).</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 990611, member: 22880"] Did some asking around among those who I KNOW are VERY familiar with rates between UPS and Ground - they've worked in FedEx Sales in the past. I was directed to the following two documents... The current FedEx Ground rate Chart The current UPS "Ground" rate chart Spend just a few seconds comparing between the two (pull them up in separate tabs) - you will VERY QUICKLY notice there is absolutely NO VARIATION between the two. They are mirror images of each other. I couldn't find any difference between the two whatsoever - they are exact to the penny. What FedEx Sales does, is to ask the potential customer: "What is the discount you are receiving for your UPS shipments?" With that information in hand, all they have to do, is to knock off 10% from that, and give a quote that is less than UPS. Both UPS and FedEx obviously offer discounts from their ("THE") standard rate chart. FedEx will go the extra step and ask customers what discount they are receiving from UPS, then underbid that. Everyone knows that FedEx Ground's cost structure is significantly lower from UPS's - YET they have the exact same published rate chart. This means that out of the gate, FedEx Ground is able to garner a higher margin on a particular shipment than UPS. Because Ground has a lower cost structure (and identical rate chart to UPS), all FedEx has to do is find out the discount off of published rate that a customer is receiving from UPS, then offer an additional 10% off of that. If the customer isn't too picky about service levels (and other things), the lower EFFECTIVE rate quote of Ground will usually get the business. FedEx Ground is able to pick off the customers it really wants, by using this strategy. Anyone in FedEx sales who states something to the contrary, is simply blowing smoke. This is how FedEx Ground is growing - and why Express is pushing its management to get the Couriers out there to beat the bushes for additional business - for GROUND. FedEx is in a situation of "absolute" competitive advantage. When this situation exists, companies make a dash to grab as much market share as they can, to increase the cash flow coming in (and profits). [/QUOTE]
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