MrFedEx
Engorged Member
Someone mentioned the FedEx Business Model in another thread and it got me thinking about how the "model" has changed and evolved over the years. Federal Express (not FedEx) was highly progressive and placed a high value on frontline employees. The emphasis on providing great service was almost a religion at the company because it was widely accepted and permeated the entire organization. The payoff was huge because customers were willing to pay a hefty premium for an outstanding experience and a virtual guarantee that it absolutely, positively would be there overnight and on time. If Federal Express screwed-up, we took responsibility and made it right, even if it took expediting the package at a net loss. Mr. Smith went to Washington, but he focused on changing regulations that allowed the company to grow, like removing the size restriction on aircraft used for the air express business. Even though we were non-union, the company was actually pro-employee, and though we never equaled UPS on pay and benefits, we were always close. The company maintained high standards of integrity and ethics, sometimes to the point of excess.
The new FedEx business model is the total opposite. Frontline employees are a necessary evil these days, and not much else. We used to be assets, but now we are simply units of production. Like widgets in a machine, we can be replaced at will. Great service? Gone. Now we provide "acceptable" service, and customers have to live with it. If the vital part that can fix a broken-down assembly line got mis-sorted, it's just too bad for the customer. The package is going to sit until the next day. We will do nothing for the customer but offer lame excuses or outright lies.
Now, Mr. Smith lives in Washington most of the time, and his main focus is on preserving the anti-union, anti-employee culture that has arisen at Express. He's also there to "invest" in the Ground franchise, buying all the politicians he can so the ISP model is protected right along with the almighty RLA. FedEx does everything it can to ensure that it operates on the fringes of the law, breaking it when they can, and paying-off token lawsuits when they cannot. Fred wants the lowest cost structure he can possibly have, and he wants it by taking away as much as he can legally from the hourly workforce. Besides all of the benefits we have lost, the RLA also gives Smith the opportunity to contract-out whatver he can. Over the years, Fred has outsourced whatever he could.
It's really mostly smoke and mirrors today. FedEx is a parasite that lives-off the dead "host" that was Federal Express. For some reason, the public still thinks that FedEx is out there striving for 100% service and 100% customer satisfaction and that it's a "great" place to work. None of this is true. If someone doesn't get their vital package, nobody really cares any more. There is no reason for employees to go the extra mile...so they don't. Over time, this attitude has permeated throughout the company to the point that few want to take responsibility and even fewer want to make the effort to straighten it out. There's simply no payoff, so why do it?
The new model works, but only on an subsistence level. Express is flat mostly from changing domestic and global economies, but has lost market share substantially from not delivering on it's false promise of superior service. We still charge premium prices, but we don't give premium service. I know so many customers that have been burned over and over by FedEx, so they only use us when they have to and seek-out the lowest cost alternative. In an industry dominated by "acceptable" service levels, FedEx Express no longer stands out. For the customer, it's whoever is cheapest, not the best. For a lot of companies it is absolutely worth it to pay a premium for superb service. It makes their product look better and allows them to sell more of it to their satisfied customer. It doesn't do a shipper much good when the vital medical item or machine part that was supposed to be there at 0730 via FO doesn't get there until 1030 or later. The same for the package that missed the plane at the origin station. Nobody at FedEx cares if the customer is pissed. They'll just offer excuses instead of a solution.
FedEx, where low costs equal mediocre service and a crap customer experience. You get what you pay for, Fred.
The new FedEx business model is the total opposite. Frontline employees are a necessary evil these days, and not much else. We used to be assets, but now we are simply units of production. Like widgets in a machine, we can be replaced at will. Great service? Gone. Now we provide "acceptable" service, and customers have to live with it. If the vital part that can fix a broken-down assembly line got mis-sorted, it's just too bad for the customer. The package is going to sit until the next day. We will do nothing for the customer but offer lame excuses or outright lies.
Now, Mr. Smith lives in Washington most of the time, and his main focus is on preserving the anti-union, anti-employee culture that has arisen at Express. He's also there to "invest" in the Ground franchise, buying all the politicians he can so the ISP model is protected right along with the almighty RLA. FedEx does everything it can to ensure that it operates on the fringes of the law, breaking it when they can, and paying-off token lawsuits when they cannot. Fred wants the lowest cost structure he can possibly have, and he wants it by taking away as much as he can legally from the hourly workforce. Besides all of the benefits we have lost, the RLA also gives Smith the opportunity to contract-out whatver he can. Over the years, Fred has outsourced whatever he could.
It's really mostly smoke and mirrors today. FedEx is a parasite that lives-off the dead "host" that was Federal Express. For some reason, the public still thinks that FedEx is out there striving for 100% service and 100% customer satisfaction and that it's a "great" place to work. None of this is true. If someone doesn't get their vital package, nobody really cares any more. There is no reason for employees to go the extra mile...so they don't. Over time, this attitude has permeated throughout the company to the point that few want to take responsibility and even fewer want to make the effort to straighten it out. There's simply no payoff, so why do it?
The new model works, but only on an subsistence level. Express is flat mostly from changing domestic and global economies, but has lost market share substantially from not delivering on it's false promise of superior service. We still charge premium prices, but we don't give premium service. I know so many customers that have been burned over and over by FedEx, so they only use us when they have to and seek-out the lowest cost alternative. In an industry dominated by "acceptable" service levels, FedEx Express no longer stands out. For the customer, it's whoever is cheapest, not the best. For a lot of companies it is absolutely worth it to pay a premium for superb service. It makes their product look better and allows them to sell more of it to their satisfied customer. It doesn't do a shipper much good when the vital medical item or machine part that was supposed to be there at 0730 via FO doesn't get there until 1030 or later. The same for the package that missed the plane at the origin station. Nobody at FedEx cares if the customer is pissed. They'll just offer excuses instead of a solution.
FedEx, where low costs equal mediocre service and a crap customer experience. You get what you pay for, Fred.
