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What if the Ground ISP Model Fails?
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<blockquote data-quote="MrFedEx" data-source="post: 784127" data-attributes="member: 12508"><p>Welcome back. I missed your "critical" input. From what I've heard, Fred is already experimenting with Ground delivering Express in test markets. How is that passing the legal test of separation? He's also moving Ground freight every day on Express aircraft. I've provided many examples of markets where this is happening and my other resident critic (quadro) backs me up on it. So he's already using the assets of one company to generate revenue for the other. Perhaps a long letter to the SEC with appropriate evidence would get Fred's hand slapped for making such a big "mistake". Maybe a E2 and SOS shift isn't happening right away, but many of us think that's where he's headed <em>if </em>he can preserve the low-cost structure of Ground and also improve service levels. The legal question is a big one, and the "degree of control" aspect of it is the critical point of contention.</p><p> </p><p>I'm just curious how <em>you</em> know that shifting the freight would have a neglible effect on FDX stock? The logical mind would assume stock prices would go up reflecting the reduced costs of the Ground structure and the elimination of Express positions. I disagree that the costs of bringing the Ground network to parity with Express are "incalculable". FedEx has been headed down this path for quite awhile, and they most likely have cost projections in place that take into account several different possible scenarios.</p><p> </p><p>So, as usual, you're just plain wrong.</p></blockquote><p></p>
[QUOTE="MrFedEx, post: 784127, member: 12508"] Welcome back. I missed your "critical" input. From what I've heard, Fred is already experimenting with Ground delivering Express in test markets. How is that passing the legal test of separation? He's also moving Ground freight every day on Express aircraft. I've provided many examples of markets where this is happening and my other resident critic (quadro) backs me up on it. So he's already using the assets of one company to generate revenue for the other. Perhaps a long letter to the SEC with appropriate evidence would get Fred's hand slapped for making such a big "mistake". Maybe a E2 and SOS shift isn't happening right away, but many of us think that's where he's headed [I]if [/I]he can preserve the low-cost structure of Ground and also improve service levels. The legal question is a big one, and the "degree of control" aspect of it is the critical point of contention. I'm just curious how [I]you[/I] know that shifting the freight would have a neglible effect on FDX stock? The logical mind would assume stock prices would go up reflecting the reduced costs of the Ground structure and the elimination of Express positions. I disagree that the costs of bringing the Ground network to parity with Express are "incalculable". FedEx has been headed down this path for quite awhile, and they most likely have cost projections in place that take into account several different possible scenarios. So, as usual, you're just plain wrong. [/QUOTE]
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