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The FedEx Ground Threat

Discussion in 'UPS Discussions' started by MrFedEx, Dec 30, 2012.

  1. MrFedEx

    MrFedEx Well-Known Member

    I really think UPS needs to wake-up and challenge FedEx Ground, because they are steadily eroding your market share. Short-term, that doesn't mean a great deal, but long-term, UPS cannot compete with the low-cost structure of FedEx. For those of you who aren't aware of what a FedEx Ground driver makes, let me inform you. Try $500-$750 per week salary, or $11-$14 per hour, with zero benefits. Factor-in that FedEx passes-off most vehicle expenses to the contractor, and all the corporation really has a huge stake in is it's facilities, which they are constructing at a rapid pace.

    I've posted about this before, but was largely ignored. Now, the transportation media is starting to take notice of the UPS loss in market share, as is the general media. Simply put, UPS will never be able to compete with Ground on price due to the built-advantages of the Ground business model, which provides Fred Smith a huge pool of subsidized cheap labor. Let me explain how this works. First, with zero benefits, the health care costs of a Ground driver fall to the taxpayer, who will pay the Emergency Room bill when the Ground employee or his family get sick. Second, Ground pay is low enough where drivers actually qualify for public assistance. Guess who pays for that? You do. Fred Smith has successfully passed these costs onto the taxpayer, just like WalMart does.

    UPS has stood-by and just watched Ground take away their business. Is Ground as good as UPS Brown? No, but it's getting there, and the cost advantages of Ground are huge. There will soon be a price point at which many shippers will shift to Ground, even if the service isn't quite as good. Yes, the Ground driver is generally unprofessional in conduct and appearance, and he's the one who takes two dock spots instead of one and then blocks you in the alley for 30 minutes later on for no good reason. Guess what? That's good enough for FedEx, and probably for a lot of customers as well.

    In fact, Ground is so profitable that Fred Smith is doing everything he can to gut his Express division and divert their business over to Ground. Fred makes a much higher percentage of profit off a Ground package in comparison to the Express overnight product. He's slashing benefits, raising premium costs on remaining benefits, and cutting hours over at Express because Ground is his cash cow.

    Few of you care if FedEx drivers get a raw deal or not because you have an excellent deal...for now. That's why you and your company need to take action NOW against FedEx Ground. Mr. Smith is extremely well-connected politically, and he's been able to squash organization efforts at FedEx Ground hubs, where workers are employees, and not "non-employee" drivers who work for a contractor.

    FedEx Ground is a scam, but until someone with enough money and clout (read UPS) takes action, Fred Smith is going to keep whittling-away at your company and your job security...and he has a big knife.

    You can write me off as a disgruntled Express employee if you'd like, but that would be unwise, because what I have just written is the absolute truth, and I strongly suggest you start taking a closer look at the FedEx Ground threat to your career. Withing the next 5-6 years, Ground has the potential to kill your union and force UPS into a muti-tiered payscale, reduced benefits...or both.

    Good luck.
  2. upsguy72

    upsguy72 The Berkshires

    sooner or later that cheap labor isn't going to be cheap anymore.
  3. Ms.PacMan

    Ms.PacMan Active Member

    What exactly should we do?
  4. MrFedEx

    MrFedEx Well-Known Member

    Get your company concerned enough to do something about it. As employees, you can start telling customers the truth about how FedEx makes them (as taxpayers) foot the bill for Ground workers just so Fred Smith can have cheap labor. A lot of people won't shop at WalMart because of their employment practices, and Fedex is just as bad.

    UPS needs to start playing hardball with Smith in the political arena, an area where they have failed to see the light. As Smith's power grows, it will get even harder to stop him. Mr. Hoffa needs to get going too. He's done very little, which doesn't surprose me at all. Not a fan of Jim Jr....he's worthless.
  5. Limper

    Limper Out For Delivery

    I don't think UPS cares about market-share erosion. They know they have a competitiveness problem. Their focus now
    is "profitability". We're force-fed accident and injury prevention...........not a mention in months about growing the business. Heck, I don't even know what my Business Development Rep looks like. So keep taking our market share........the robots we work for don't care.
  6. Paycheck

    Paycheck New Member

    UPS cares about what is profitable and thats it. It used to be we would keep a account even if we broke even, now no profit no account. I am sure since its a contract year the management at FedEx is blowning smoke to their employees in hopes of a labor dispute or strike. I mean the day that contract negotiations started FedEx drivers both ground and express were tellnig custome they need to set up a alternated account with Fedex in case of a strike. Pretty low blow if you ask me.
  7. Tony Oliva

    Tony Oliva Guest

    Come on brother. Do you actually think big brown and the Teamster don't have something under their sleeve. Talk to me in August. If there is one thing we do is survive. Watch
  8. bbsam

    bbsam Moderator Staff Member

    Little old us? We're a threat to nobody. Any business we take will be running back to UPS in a month with horror stories of missed pickups, tatted up druggie drivers and baby killing truck accidents! Hell, I'm surprised we're still in business!
  9. MrFedEx

    MrFedEx Well-Known Member

    From what I've seen of Mr. Hoffa, I expect very little.
  10. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    Please explain the price advantage. Since everytime I see prices they are exactly the same and we both up our prices 4-6% every year.
  11. STFXG

    STFXG Well-Known Member

    If they undercut too much they will have more volume than their infrastructure can handle. It's a long term build with no reason to undercut until capacity is there.
  12. Cementups

    Cementups Box Monkey

    This is pretty much some of what I see happening.

    On my area I have already lost a few national customers to FedEx because FedEx has promised $5 shipping to them any where in the lower 48. If I remember correctly DHL tried that crap and remind me where they are now. These same customers have also voiced concerns to me that FedEx is never consistent with their pickup times. Every day is different depending on what the drivers out of work plans are. Whereas the could set their watch by me.

    In the end, SERVICE will always win out.
  13. STFXG

    STFXG Well-Known Member

    The customer sets the pickup window. And drivers rarely miss windows. It costs us a lot of bonus money for every missed pick up window.
  14. Tony Oliva

    Tony Oliva Guest

    Then you are stupid. I've met him a bunch. He is a smart f...er. He was a corporate attorney bro. He also hates Fred smith. So does ups while we are at it. We are going to win. Ups always does. Until we are beatin we are the best and everyone else will lose.

    God bless
  15. barnyard

    barnyard KTM rider Staff Member

    I really do not know what you expect us to do.

    UPS has a lobbying arm that has lobbied heavily to change the RLA so that FE would no longer be able to be called an airline. That failed, in spite of the fact that BOTH UPS and the union lobbied for the change.

    UPS lawyers have been accused of writing briefs for prosecutors in employee misclassification cases (specifically in Ohio and it would not surprise me if there were others.)

    UPS and the Teamsters have not won in either of these battles.

    Maybe it is time the FE employees do something for themselves. If you sit back and wait for others to change things for you, you will be sitting for a long time.

    UPS' most profitable item right now are air products and international products. There is very little profit in ground and even less with UPS' cost structure. We (UPS) is doing everything we can to improve productivity to keep out costs down.

    We are keeping up our end of the competitive bargain. It is time the FE employees start to carry their weight.
  16. Maple85

    Maple85 Member

    Mr FedEx does have some good points. One thing you have to factor in though is their operating costs are a little higher then they first appear. Yeah the driver may only be making 10 to 15 bucks an hour with no benefits but don't forget the contractor in the middle. Some of those guys make bank. I bet the driver gets about half the gross pay while the contractor collects the other half plus daily van availability, sweet bonuses and gas reimbursement. You also have to remember Fedex has to pay for 3 trucks to enter each neighborhood and overlap each other (express, ground and HD). That's a lot of extra baggage and liability driving around.

    With that said though UPS provides a far superior service and their efficiency to get the job done is 2nd to none. Ground is an area we will definitely have to maintain are dominance in and will so with the hard work of the teamsters. All you brown guys keep submitting those sales leads and hopefully make some extra cash doing it:happy-very:
    • Like Like x 1
  17. IVE GOTTA PACKAGE 4U

    IVE GOTTA PACKAGE 4U like Iit or not...we are family

    why get a sales lead? They will still cut a route no matter how much work you have
  18. Cementups

    Cementups Box Monkey

    My one customer has a set 6pm pickup with FedEx ground. I see, with my own two eyes, the driver making pickup attempts at 4:30 when I am there. I've asked the customer if that is when he is usually there and they informed me of the 6pm pickup but have seen him there as early as 3pm wanting to make his daily pickup attempt. This isn't just once. It's 2-3 times per week.
  19. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    This is the key. Why do fed ex employees settle for such crap wages and benefits.
  20. IVE GOTTA PACKAGE 4U

    IVE GOTTA PACKAGE 4U like Iit or not...we are family

    fedex is giving them a bargain price...you only get what u pay for!!!I dont blame the fedex guys...I wouldnt stand around waiting for a package if I wasnt getting paid!! Would you?
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