Softening Us Up?

Discussion in 'FedEx Discussions' started by vantexan, Jun 5, 2012.

  1. vantexan

    vantexan Well-Known Member

    We had a meeting this morning concerning the Lead On program. Our salesman was there and they played a video. What was interesting is the video went to great length to explain how the pkg industry has changed since 2001. MT3 introduced an exec who explained how we were not getting as many as pkgs from the finance, insurance, and real estate industries due to electronic signature capture, as well as major shippers having locations around the country, instead of just one location, to take advantage of Ground's cheaper rates.

    The salesman even pointed out that an Express courier gave him a lead that resulted in $100,000 in new GROUND business. By the way, our salesmen are no longer just Express salesmen. They represent all our services(integration?).

    Our senior then pointed out how much our various services cost to ship a 1 pound pkg to the next state over from our town and how much cheaper Ground was than both Express and UPS. He emphasized the differences and by the end of the meeting I had to wonder if this was truly about sales leads or are they starting to work on us, demonstrating why it will be necessary to make major changes.
     
  2. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    Absolutely propaganda for what's coming....
     
  3. DS

    DS Fenderbender

    I may be wrong but,it seems to me that this meeting was not about sales leads,
    it's about how the near future may require a consolidation between express and ground.
    It would not surprise me at all if they went the way we do it at UPS.
    Air and ground all at once.I do up to 30 10:30/12:00 commits and doing both at once,
    by noon I've delivered up to 175 pkgs.The rest of the day is pickups and ground resi's mostly.
    It's the only real way of getting production (profit) up .
    I'm not sure if they can just hire all the contractors as employees,but it could be possible.
    I'm just speculating here,straighten me out if I'm way off.
     
  4. vantexan

    vantexan Well-Known Member

    FedEx has to keep it's divisions separate to maintain Express's status under the Railroad Labor Act. It's what gives Ground a competitive advantage as non-employees earning less, as well as keeping a union out of Express. Which is what's leading to all the twists and turns we're about to experience.
     
  5. Ricochet1a

    Ricochet1a New Member

    You're partly right, partly wrong.

    Express and Ground will NEVER fully integrate the way UPS is. Part of the business model of Fedex is to take advantage of existing labor law to minimize labor costs. Thus why the RLA for Express and IC/ISP for Ground. Express and Ground will ALWAYS remain as separate opcos within FedEx. The operations will become "more integrated" between the two, but the companies will exist separately to enable FedEx to get the best of both worlds (RLA and IC/ISP).

    Not knowing exactly what this meeting was about, it does sound more like a buildup to the impending change in business operations.

    FedEx has demonstrated a tactic of gradually turning up the heat on the hourlies to bring about change. Any sudden "change in temperature" would bring massive discontent among the hourlies. By gradually unveiling the impending change, FedEx is betting that they can gradually acclimate the hourlies to the impedning change, thus letting them become used to it over a period of time, rather than over a single weekend.

    Sort of using a proverbial "relief valve" rather than risking the boiler exploding due to rapid heating.

    And this change isn't like anything they've done in the past. Change in the past was more "evolutionary" in nature for Express. This change is going to be "revolutionary" and it will cause a radical shift in how Express is staffed (composition of its hourly labor force) and the level of competency needed among its hourly employees (hand a new Courier a powerpad with a delivery manifest, and have them start delivering packages).
     
  6. Ricochet1a

    Ricochet1a New Member

    Sales has been under FedEx Services for quite awhile. Look for more Express employees to be moved under the FedEx Services "banner".

    Its all about margins, what I've been saying here for quite sometime.

    They were correct about the dispersion of warehouses across the country. Take Amazon as an example, they don't use a single location, they use multiple locations. When an order is received, their computer system automatically checks the inventory of the closest warehouse to the ordering ZIP code - and fills the order as much as possible from that location. Then it checks the next closest warehouses for inventory to fill the order if the closest cannot. This is why a single multiple item order from Amazon may ship from two or more warehouses.
     
  7. TUT

    TUT Well-Known Member

    I know all this sucks but what was said is true, propoganda? I look at that as really stretching truths, that was pretty truthful. Fedex Salesmen have been selling combined Express/Ground for a decade, so that is far from new. Now they have freight to sell as well I see.
     
  8. TUT

    TUT Well-Known Member

    Believe me I've seen even bigger locks fall. In time it could change and even though it may cost them quite a bit more on one end, there are savings and other large gains to be had if they were Fedex employees.
     
  9. TUT

    TUT Well-Known Member

    I've always said, give it another 100 years and Lincoln Nebraska will be the mecca of the US. Right dab in the center to maximize dollars. St. Louis is big because of it, with the slight favor towards the more populated east. There are a ton of companies doing this, it's not even close to being exclusive to companies the size of Amazon. It's smart business on their behalf.
     
  10. vantexan

    vantexan Well-Known Member

    The point I'm making is that they are pointing out the many reasons the package industry has changed. Began to wonder if they were laying the groundwork, no pun intended, for what's coming soon. The video said that there is 1.7 million pkgs less per day industry wide than in 2001. And how companies were moving to Ground and taking advantage of Ground prices by opening up regional distribution centers. Sounded more like an argument for Ground than actually finding leads for Express.
     
  11. DS

    DS Fenderbender

    Thanks for all that info,but in my eyes,regardless of the taking advantage of labor laws,
    it simply makes more sense to pay one driver instead of two to deliver to the same address.
    You must admit the absurdity of the logic must elude a customer that wants to send a ground
    package with the express driver or vice versa.Maybe I'm missing something as far as how much
    money Fred is saving doing it his way.Maybe I'm underestimating the profit he's getting from using contractors.
    It would be great for business to see FedEx under one banner,that creep with the chisel in the tv add would
    actually be credible.In my eyes fedex express has excellent qualifications that probably rank # one in the world for dependable overnight shipping.Someone has to wake Fred up.The possibilities are enormous.
    If UPS bought fedex....you guys would actually have to work! jk :tantrumsmiley:
     
  12. franknitty

    franknitty Member

    Just prepare for more changes, and please don't give the standard BS line "They can't do that" !
     
  13. They can't do that!! Ive got 20 years seniority!! The people manual says they cant do that!!!
     
    Last edited: Jun 5, 2012
  14. Ricochet1a

    Ricochet1a New Member

    FedEx has run the numbers, and having dual coverage of areas (Ground and Express trucks) IS much cheaper. Very soon, they will have THREE drivers potentially delivering to the same address (Ground, Express, Office). They've run the numbers, labor is the major cost, NOT the running of multiple vehicles. Without the RLA for Express and the inappropriate use of the IC model for Ground, FedEx would've been forced into complete integration as UPS has. By paying for one advantageous labor rules and defending the use of the other, FedEx has obtained the lowest cost labor possible while meeting its service goals.

    Just as the current Express wage employees are looking at the impending change and not able to comprehend what is about to happen, looking at how UPS runs its business and attempting to rationalize how FedEx can efficiently runs its by comparison is faulty thinking. If UPS could somehow get rid of the Teamsters and adopt a model like FedEx currently has and will further modify in the coming years, UPS would do it in a heartbeat.

    In one of those trucks, FedEx is paying about $12/hr with no benefits to the operator. In the other, FedEx currently pays about $27/hr on average INCLUDING benefits. UPS pays on average about $40/hr to the operators of their trucks - including benefits. In addition, since UPS has increased density of volume (a single truck covers a small area compared to a Express truck), the efficiency of getting the volume out of an UPS truck is higher.

    With the gradual change to a part-time force with Express and the shifting of delivery to Ground of non-overnight volume, the cost advantages of FedEx will increase even more. The typical Courier pay will drop to about $22/hr (assuming they keep the same pay rates). If Express is able to being in more "Courier-handlers" to drive the routes which will become predominantly Sprinter type vehicles (not requiring DOT certification), then costs can be reduced even further. Express has already held back starting pay for Couriers (they used to bump starting pay up each year with the pay actions). The writing is on the wall.
     
  15. Ricochet1a

    Ricochet1a New Member

    Read your employee handbook. FedEx reserves the right to change any personnel policy at any time without notice. You don't work on contract, you are an at-will employee with NO contract. PEOPLE is in a constant state of change, so much so that it is revised constantly and hardcopies are destroyed upon revision.

    How much input did you have regarding the loss of your defined benefit pension plan. Express just up and took it and replaced it with a "pension" that was worth about 30-40% of the DBPP (depending on age of the employee). You took about a 10% hit to your total compensation when the DBPP was pulled - did the "sheep of Express" do anything about it?

    More that anything, I think this one action by Express was a test to see if they could get away with further change. Look at the past 4 or so years and you have your answer.
     
  16. STFXG

    STFXG Well-Known Member

    R1a, I've yet to meet a ground contractor making 12 an hour... So how is FedEx paying their contractors 12 an hour? Just because that's what a driver for a contractor is making doesn't make it the amount FedEx is paying...

    Do you have any idea what an average PSA pays to a contractor?
     
  17. Ricochet1a

    Ricochet1a New Member

    It is a calculation of their salary divided by hours worked, taken on a national basis. In some areas, it is slightly below $10/hr, in others it works out to be about $15/hr. When talking about FedEx as a whole, one cannot use local conditions to generalize to the whole, nationwide averages MUST be used when making comparisons.
     
  18. franknitty

    franknitty Member

    None of the managers at my station keep a hard copy of the PEOPLE MANUAL out in the open in their offices. I recall an edition of Frontline where MT3 said there was suppose to be a computer available where the employees could access PEOPLE MANUAL Online. That has yet to happen at our station. As a matter of fact if you ask a manager can you view PEOPLE, he or she will invite you into their office, then ask you if there's a problem you'd like to talk to he or she about. So much for a hard copy or online access.
     
  19. STFXG

    STFXG Well-Known Member

    You didn't answer my question. What's the national average per PSA? 15 an hour is also low. Unless you are only considering what a contractor takes as a salary and not what they pay themselves in dividends.

    Are you factoring in effective tax rate? How much in taxes are ups and express drivers paying? I bet you it's a whole lot more than a contractor... Since we are going on national average that is.

    Where did you pull "below 10 an hour to 15" from?
     
  20. vantexan

    vantexan Well-Known Member

    He's actually talking about drivers for contractors compared to Express couriers. No one in their right mind would buy a rt for only $12hr compensation.