Buyouts?

[TUT]

I can go to Fedex.com right now and get a new account and get Express discounts, 16% on all the standards. So a new customer who actually has a sales rep (a way to get better rates yet) couldn't get anything? Sure.:

(a) a 16% discount ("Discount") each off of the FedEx list prices in effect on the date of shipment, as published by FedEx from time to time, on shipments sent by Participants via eligible FedEx Express® services and processed through FedEx Ship Manager^® at fedex.com and FedEx Ship Manager^® Software. Eligible FedEx Express^® services ("Eligible Express Services") are: FedEx Priority Overnight^®, FedEx Standard Overnight^®, FedEx 2Day^®, FedEx Express Saver^®, FedEx International Priority^®, and FedEx International Economy^®. Only U.S. based payors may be Participants.

(b) a 7% discount ("Discount") each off of the FedEx list prices in effect on the date of shipment, as published by FedEx from time to time, on shipments sent by Participants via eligible FedEx Express services and processed through FedEx Ship Manager^® at fedex.com and FedEx Ship Manager^® Software. Eligible FedEx Express^® services ("Eligible Express Services") are: FedEx 1Day Freight^®, FedEx 2Day Freight^®, FedEx 3Day^®, FedEx International Priority^® Freight, and FedEx International Economy^® Freight. Only U.S. based payors may be Participants.

(c) an 8% discount ("Discount") each off of the FedEx list prices in effect on the date of shipment, as published by FedEx from time to time, on shipments sent by Participants via eligible FedEx Ground^® and FedEx Home Delivery^® services and processed through FedEx Ship Manager^® at fedex.com and FedEx Ship Manager^® Software. Eligible FedEx Ground^® and FedEx Home Delivery^® services ("Eligible FedEx Ground^® and FedEx Home Delivery^® Services") are: FedEx Ground^® and FedEx Home Delivery^® for shipments having an origin and destination solely within the United States. Minimum charges may apply for some FedEx Ground or FedEx Home Delivery shipments. The discount is only eligible in Zones 2,3,4,5,6,7, and 8. Only U.S. based payors may be Participants. Eligible FedEx Express^® Services and Eligible FedEx Ground^® and FedEx Home Delivery^® Services are collectively referred to as the “Eligible Services”.

[TUT]

I have a local and national sales rep, that just replied to me and said they have no idea what you guys are talking about. They are selling it like they have for years with discounts based on volumes the same as always. Awaiting to hear from national... They actually had to ask me again what I was asking because they assumed I worded something wrong.

[whenIgetthere]

Can only tell you what the customer told me, since I wasn't in the meeting.

[TUT]

Can only tell you what the customer told me, since I wasn't in the meeting.

Fair enough and I believe things can get misconstrued. This is also a reply to others stating I was having a hard time connecting imaginary dots. Out in shipper land we are getting no indication Express is closing up shop at all. Now are they always truthful and upfront, well maybe not always. But it's hard to imagine a Fedex without Express and an Express without discounts, only counter shippers would use it. It's already high with 55% off.

I mean face it the bigger boys are setting up warehouse strategically in the US, freighting inventory to the warehouses and shipping ground 1 or 2 day from there. That is what is going on. And some of these are logistics companies that offer the service to smaller shippers to get them in on the action. $$$ saved.

Update:
Local sales replied back a second time stating Express is having a large push right now for more volume and drivers are back to finding new leads for Express.

[Ricochet1a]

Let's get some things out there regarding how Express gives discounts to various customers.

Just for using a FedEx account, a shipper receives the "standard" 16% discount. NOBODY, NOBODY pays full over-the-counter rate if they have an account with FedEx.

As the volume a particular shipper increases, the discount that is offered increases. This is STANDARD INDUSTRY PRACTICE.

Most significant shippers get 30% off of published rates. As the volume goes up, so does the discount. The federal government gets a discount which makes the Express employee 75% discount look puny (and you thought you were getting a "special" deal...).

This is all industry standard (to give discounts off of PUBLISHED RATES) based upon the volume a shipper puts into Express.

What Express WON'T do, is offer shippers discounts ABOVE AND BEYOND what they consider industry standard for the volume being offered by a particular shipper. Most shippers, when they are looking at choosing a carrier, want a discount ABOVE that which is normally offered, to make a choice as to carrier to use. Express WON'T cut deals with shippers to grab business from UPS - they offer the standard discount based off of anticipated (and historical volume if they are a long term customer).

Conversely, UPS sales WILL offer discounts above and beyond industry standard, to grab volume. When it comes time to renew these contracts, UPS sales will then gradually cut the discount offered (ratchet up the price), until they are near "industry standard". When this occurs, the account will often bounce back and forth between UPS and Express - or you'll see a situation where a shipper will use BOTH (choosing which carrier to use based off historical pricing levels to particular markets).

Express WON'T compete on the basis of price with UPS for overnight volume - this is why a significant portion of Express volume with low volume shippers has been "poached" by UPS over the past few years. When I was a Courier, I witnessed first hand how UPS would come in and offer cut rates on next and 2nd day shipping, and grab accounts from Express. Express sales would make NO MOVE to attempt to get these accounts back - they'd offer the same discount from published rates and sit on their hands.

This attempt to get sales leads from Couriers is a joke - and sales KNOWS it. Customers know what their options are regarding shipping options and will contact both UPS and FedEx (and the USPS) for a rate - discount from published over the counter rates. Just think about it, how many shippers (businesses that have volume that need to be moved from one location to another) DON'T know that FedEx is in the business of moving volume from one location to another? DHL had that problem when it made a run at the US domestic market, but FedEx certainly DOESN'T have that problem (lack of awareness among business types).

All sales has to do (to find new business start-ups) is to look through an index of business licenses listed in a particular area, then make cold calls to those businesses which aren't in their existing database. Its basic marketing (what they are paid to do).

Couriers on the delivery side are more often than not making their deliveries to locations which don't ship out volume of their own (they are on the receiving side only), OR are making deliveries to businesses which already have an Express account. On the flip side, pickup Couriers are obviously making their stops at locations which already have an Express account, but they don't have time to walk into a random business and give a sales pitch. Most businesses out there have a no solicitation policy, just to prevent having their time wasted with such antics.

There are a few small businesses which start up which may slip through the cracks (sales doesn't have them listed in their index), but the actual volume offered by these businesses is PUNY. The whole smoke screen of getting Couriers out there to generate sales leads is merely an attempt to get them to try to pick up the remaining scraps that sales may have missed. It does work on occasion - but does anyone seriously think that FedEx sales is that incompetent when it comes to finding new businesses which are in need of shipping their product?

When it comes to the Express product offered by FedEx, FedEx WON'T compete on the basis of price. With the large volume shippers they do offer substantial discounts from published rates - BUT SO DOES UPS. FedEx sales WON'T offer cut rate pricing in order to grab market share for Express - they will do so however for Ground, and increasingly Freight too. FedEx sales does this with Ground, since Ground has such large margins, that they can indeed offer cut rate pricing in order to grab market share from UPS - and STILL make a profit while doing so.

[59 Dano]

All sales has to do (to find new business start-ups) is to look through an index of business licenses listed in a particular area, then make cold calls to those businesses which aren't in their existing database. Its basic marketing (what they are paid to do).

Couriers on the delivery side are more often than not making their deliveries to locations which don't ship out volume of their own (they are on the receiving side only), OR are making deliveries to businesses which already have an Express account. On the flip side, pickup Couriers are obviously making their stops at locations which already have an Express account, but they don't have time to walk into a random business and give a sales pitch. Most businesses out there have a no solicitation policy, just to prevent having their time wasted with such antics.

They don't want salesmen wasting much time cold calling. The more effective way is to get decent leads from couriers and pay the couriers well when the leads pan out. They need some work on compensating the couriers for that. I've long since forgotten the most accurate estimate, but it was that around 2% of all cold calls resulted in the closing of a sale. As far as new businesses go, they're more willing to establish a rapport and spend a few minutes talking to a courier about their shipping needs than they are a cold calling guy in a tie.

[MrFedEx]

They don't want salesmen wasting much time cold calling. The more effective way is to get decent leads from couriers and pay the couriers well when the leads pan out. They need some work on compensating the couriers for that. I've long since forgotten the most accurate estimate, but it was that around 2% of all cold calls resulted in the closing of a sale. As far as new businesses go, they're more willing to establish a rapport and spend a few minutes talking to a courier about their shipping needs than they are a cold calling guy in a tie.

BS. You ignore his overall point, which is that they are selling alternatives to Express, not Express. Obfuscate away my man!!

[59 Dano]

How hard they'll push Express depends on the salesman. Some push it hard, others don't. I responded to the part I responded to because it was silly and I rarely read an entire post of his.

[TUT]

Let's get some things out there regarding how Express gives discounts to various customers.

Just for using a FedEx account, a shipper receives the "standard" 16% discount. NOBODY, NOBODY pays full over-the-counter rate if they have an account with FedEx.

As the volume a particular shipper increases, the discount that is offered increases. This is STANDARD INDUSTRY PRACTICE.

Most significant shippers get 30% off of published rates. As the volume goes up, so does the discount. The federal government gets a discount which makes the Express employee 75% discount look puny (and you thought you were getting a "special" deal...).

This is all industry standard (to give discounts off of PUBLISHED RATES) based upon the volume a shipper puts into Express.

What Express WON'T do, is offer shippers discounts ABOVE AND BEYOND what they consider industry standard for the volume being offered by a particular shipper. Most shippers, when they are looking at choosing a carrier, want a discount ABOVE that which is normally offered, to make a choice as to carrier to use. Express WON'T cut deals with shippers to grab business from UPS - they offer the standard discount based off of anticipated (and historical volume if they are a long term customer).

Conversely, UPS sales WILL offer discounts above and beyond industry standard, to grab volume. When it comes time to renew these contracts, UPS sales will then gradually cut the discount offered (ratchet up the price), until they are near "industry standard". When this occurs, the account will often bounce back and forth between UPS and Express - or you'll see a situation where a shipper will use BOTH (choosing which carrier to use based off historical pricing levels to particular markets).

Express WON'T compete on the basis of price with UPS for overnight volume - this is why a significant portion of Express volume with low volume shippers has been "poached" by UPS over the past few years. When I was a Courier, I witnessed first hand how UPS would come in and offer cut rates on next and 2nd day shipping, and grab accounts from Express. Express sales would make NO MOVE to attempt to get these accounts back - they'd offer the same discount from published rates and sit on their hands.

This attempt to get sales leads from Couriers is a joke - and sales KNOWS it. Customers know what their options are regarding shipping options and will contact both UPS and FedEx (and the USPS) for a rate - discount from published over the counter rates. Just think about it, how many shippers (businesses that have volume that need to be moved from one location to another) DON'T know that FedEx is in the business of moving volume from one location to another? DHL had that problem when it made a run at the US domestic market, but FedEx certainly DOESN'T have that problem (lack of awareness among business types).

All sales has to do (to find new business start-ups) is to look through an index of business licenses listed in a particular area, then make cold calls to those businesses which aren't in their existing database. Its basic marketing (what they are paid to do).

Couriers on the delivery side are more often than not making their deliveries to locations which don't ship out volume of their own (they are on the receiving side only), OR are making deliveries to businesses which already have an Express account. On the flip side, pickup Couriers are obviously making their stops at locations which already have an Express account, but they don't have time to walk into a random business and give a sales pitch. Most businesses out there have a no solicitation policy, just to prevent having their time wasted with such antics.

There are a few small businesses which start up which may slip through the cracks (sales doesn't have them listed in their index), but the actual volume offered by these businesses is PUNY. The whole smoke screen of getting Couriers out there to generate sales leads is merely an attempt to get them to try to pick up the remaining scraps that sales may have missed. It does work on occasion - but does anyone seriously think that FedEx sales is that incompetent when it comes to finding new businesses which are in need of shipping their product?

When it comes to the Express product offered by FedEx, FedEx WON'T compete on the basis of price. With the large volume shippers they do offer substantial discounts from published rates - BUT SO DOES UPS. FedEx sales WON'T offer cut rate pricing in order to grab market share for Express - they will do so however for Ground, and increasingly Freight too. FedEx sales does this with Ground, since Ground has such large margins, that they can indeed offer cut rate pricing in order to grab market share from UPS - and STILL make a profit while doing so.

From what I see that is pretty much right on. Fedex can wheel and deal, but it's rare. UPS also has shown the ability to buy contracts, giving straight up jack to a customer if they want the business bad enough. I have never heard of Fedex doing that. There is another strong push to get more Express, really. It will be interesting if they will step down a bit from their "take it or leave it" attitude as that is the only chance to gain real volume for them.

[TUT]

BS. You ignore his overall point, which is that they are selling alternatives to Express, not Express. Obfuscate away my man!!

They are selling express I am 101% certain and I'm rarely that certain, our second national rep got back to me and says the whole "not selling Express" being stated here couldn't be farther from the truth. However wanting to and landing a contract are two different things. They are being pushed as hard as ever right now and driver leads are back on and they have to follow up with each of those in very short order. Now some here would say, "yeah they have to follow up in short order to shut those people up and sell them ground". lolz Rico's post is on the mark with what I can see in actuality. Perhaps they need to start offering deeper discounts.