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What if the Ground ISP Model Fails?
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<blockquote data-quote="59 Dano" data-source="post: 784105" data-attributes="member: 23516"><p>As half-baked as that idea is, it needs lots of ifs!</p><p> </p><p>Express can't just pass freight to Ground for delivery. They operate as separate companies under the FedEx Corp parent company. The scenario, as MFE presents it, would cause "Fred" all sorts of legal problems. In particular, the SEC would rip "Fred" 48 new ones for using the assets of one company to generate revenue for another company as it has been presented here, and people could end up in jail. That's above and beyond the civil penalties that FDX Corp would be subject to.</p><p> </p><p>On the other hand, Express can pay Ground 90 cents (or whatever amount they come up with) on the dollar to take on the extra freight. Not that it makes any sense to do that, as the Ground network isn't designed to be compatible with Express', nor is it integrated with air ops. But... it's (more or less) legal.</p><p> </p><p>Then there's yet another fact that our resident investment guru who doesn't really need the FX money, but he sticks around takes the abuse anyway should be aware of. Shifting the freight legally would have only a negligible effect on FDX stock, and that's assuming that it went as planned, and the cost of bringing the Ground network to parity with the Express network is incalculable at this time. </p><p> </p><p>I wish people would think things through.</p></blockquote><p></p>
[QUOTE="59 Dano, post: 784105, member: 23516"] As half-baked as that idea is, it needs lots of ifs! Express can't just pass freight to Ground for delivery. They operate as separate companies under the FedEx Corp parent company. The scenario, as MFE presents it, would cause "Fred" all sorts of legal problems. In particular, the SEC would rip "Fred" 48 new ones for using the assets of one company to generate revenue for another company as it has been presented here, and people could end up in jail. That's above and beyond the civil penalties that FDX Corp would be subject to. On the other hand, Express can pay Ground 90 cents (or whatever amount they come up with) on the dollar to take on the extra freight. Not that it makes any sense to do that, as the Ground network isn't designed to be compatible with Express', nor is it integrated with air ops. But... it's (more or less) legal. Then there's yet another fact that our resident investment guru who doesn't really need the FX money, but he sticks around takes the abuse anyway should be aware of. Shifting the freight legally would have only a negligible effect on FDX stock, and that's assuming that it went as planned, and the cost of bringing the Ground network to parity with the Express network is incalculable at this time. I wish people would think things through. [/QUOTE]
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