What if the Ground ISP Model Fails?
- Thread starter MrFedEx
- Start date
You don't expect Express to fly all of those packages for free, do you?
No, but a billion dollars saved is a billion dollars earned, no?
MrFedEx
Engorged Member
I suggest you learn to read. I've repeatedly said that FedEx already has an air network and that the freight that would go to Ground ALREADY moves on FedEx aircraft. That's the whole point. Is your head made of concrete?
MrFedEx
Engorged Member
You don't understand -- "Fred" is evil and he can overcome all of that by the force of his will, which is the evilest evil that ever eviled!!
But in all seriousness, it only takes a look at the data to see what a silly theory this whole thing is. MFE ignored it, but in FY10 the domestic 2D/ES revenue alone paid for almost 98% of the fuel for the entire Express company. Shifting SO, 2D, and ES to ground would wipe out around half (give or take) of Express' domestic revenue. There's no way Express could cut enough expenses to compensate for that, even with the reduction in paid hours of labor.
That's not an opinion, it's a fact that can be substantiated with only three letters: D H L.
It's great when you attempt to mock me, and then make a fool of yourself in the process. That's "genius" at work.
MrFedEx
Engorged Member
I'll discuss this with you because you're rational, unlike other particpants here. As we've both said before, all Fred has to do is take the E2 and SOS from the Express ramp to the Ground facility in a highly technical scenario called a roller-bed truck. You install as scissor-lift and some ballmat decking, and Ground magically has the ability to run Express packages through it's sort facility. I believe that it's already been pointed-out by others that the computer systems are being set-up so that drivers can process both Ground and Express packages. Wonder why that is? I would imagine that sort facilities are doing the same thing. As I also mentioned in a previous post, Express is getting rid of it's larger vehicles and moving back to smaller vans in many locations. Highly suspicious.
Also, even if it's incestuous and possibly illegal, what if Ground "pays" Express to move the E2 and SOS that are already moving via Express aircraft? Who knows, perhaps our new leadership in the House of Representatives will arrange for things to go Fred's way. It isn't like it's never happened before.
59 Dano and quadro. Please contact HQ right away and ask Maury how to confuse this issue and send the discussion of in another direction.
You don't expect Express to fly all of those packages for free, do you?
I think you may be missing a big point: Ground and Express aren't 2 different companies. They are 2 divisions of the same company. There's only one stock(although there may be preferred stock, etc.), and that stock is for the Federal Express Corporation. If Ground pays Express it all ends up on the corporate balance sheet. But the upshot is FedEx deletes costly regular employees. You say Ground won't deliver Express type service without Express style pay. But Express is doing everything possible to hold our pay down. There's not that much difference in pay between Ground drivers and many mid-range Express couriers. I think SO service will stay with Express, but as Mr FedEx pointed out wouldn't require much to move 2 day freight from Express to Ground terminals. If the freight isn't due until the next day you wouldn't have to have drivers waiting for it to arrive. If Express was strictly an overnight service they could keep FTer's to 35 hrs a week, might even call FT 32 hrs like Walmart does. Think of the OT cost savings. One more thing, that cash balance retirement plan would require less funding if they hold our hours down. Many reasons to consider restructuring, and all it takes is a compliant gov't helping us to "save" our vital overnight delivery in this troubled economy to make it happen with any possible regulatory matters.
MrFedEx
Engorged Member
Thank you. Maybe SO will stay with us, maybe not. What is for sure is that they're out to cut costs wherever they can, and a shift is in the works. As usual, we are expendable in the process.
If I make it to 55 I'll be surprised. But if the rumor to top us out faster turns out to be true I'll act like a saint, work like a dog, and try to make up for many years of lousy pay. They want productive, happy couriers they could get that tomorrow with much better pay.
Both of you are missing an extremely vital point. You cannot simply move SOS and E2 (or just E2 for that matter) to Ground. Physically it is as simple as MFE points out but the logistics of it isn't the issue. If you are going to have Ground deliver the product then you have to charge Ground prices. Even if Ground pays Express (which I'm sure they do anyway with whatever Express moves for them to Alaska), Express won't take in the same revenue as it does now for those packages. Without that revenue, you cannot support the aircraft (or the vehicle) fleet that you still have to run because your still moving the same packages. The business model that the two of you suggest cannot support itself because, once again, it costs more to move a package by air than it does by truck.
Are you certain they couldn't continue to charge the same rates? The customer is paying for 2 or 3 day service. I don't think they'll care who delivers it as long as it's on time. If they want cheap, they can go with regular Ground, but the faster service requires higher prices.
I think this is correct. Not all UPS NDA travels by plane, so what's the difference?
MrFedEx
Engorged Member
The customer could care less about what color truck brings it. Most of them cannot really distinguish between the different operating divisions anyway. You could easily charge the same rates for SOS and E2.
MrFedEx
Engorged Member
Enlighten us. I'd love to have Express keep E2 and SO. Hey, here's a new product idea! FedEx should buy thousands of FAX machines and then place them next to our existing drop boxes. Whenever a customer needs to ship an urgent FAX, dispatch tells the courier to drop whatever they're doing, pick-up the urgent FAX and then head to our FAX location next to the drop box 10 miles away. We'll call it CrapMail, and spend hundreds of millions of dollars on it.
Shhh. Keep it quiet. For now, it's called "Project Gemini".
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MrFedEx
Engorged Member
Project Condor. Perhaps they are going to save endangered condors and have them deliver pkgs to remote mountain areas. They'll call it BirdMail.
So then why do you and others keep telling us how poorly the Ground drivers represent FedEx if the customer cannot tell the difference? Not the best of analogies but when you buy a Caddy, you don't accept a Chevy just because the dealer tells you "hey, it'll get you there at the same speed".
