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<blockquote data-quote="Ricochet1a" data-source="post: 1008770" data-attributes="member: 22880"><p>It isn't just plausible, it IS the business plan of Ground for the next 10-15 years. Fred S literally plans on eating your lunch. Fred isn't just gunning for the Express Couriers anymore, he's got UPS lined up in his sights.</p><p></p><p></p><p></p><p>Yes... Ground is expanding rapidly. bbsam can attest to just how rapidly Ground is expanding. He gave a heads-up reagarding a meeting that is supposed to be taking place this Thursday. No indication as to what the topic will be, but I have a couple of guesses.</p><p></p><p></p><p></p><p>Again, bbsam can comment.... short answer will be yes.</p><p></p><p></p><p></p><p>They may complain. But when their shipping costs fall by between 10 and 20%, they won't complain too much.</p><p></p><p>Everyone likes to fall back on "great service" for a defense against "low cost" providers. There is a bit of merit to that argument - but in the current environment, low cost is winning out over great service time and time again. Look at the airlines, big box retailers, cell phone providers, FedEx Ground... you name it. Low cost is winning out over great service an overwhelming majority of the time. FedEx is even DOWNSIZING Express right now - they are calling it "rightsizing", all out of the euphemism machine of media relations. The "great service" company is downsizing right now, not expanding. The low cost "arm" of FedEx is doing all of the expanding right now. </p><p></p><p>Most of the wage employees of Express are in complete denial about what is happening in Express right now (and what is lined up for them in the next couple of years). "Head in the sand" doesn't even begin to describe the situation among the wage employees of Express right now. </p><p></p><p>A substantial portion of Express volume is going to be shifted over to Ground (the "low cost" alternative) - all to improve margins. Will the move "stick" - I think so. The actual people receiving the volume may complain, but when the "bean counters" of the companies come back with, "We're paying 20% less than we were before, the minor issues are well worth the savings" - that will be the end of the argument in a cost control oriented world. </p><p></p><p><u>Fred S is shaping up to be for package shipping, what Sam Walton was for consumer item retailing</u>. I can't stress this enough. Think of retailing back 30 years ago (for those old enough to remember), and look at today. Look back at how retailing was done in the 50's and 60's, and look at today. Complete and radical transformation of methods of getting goods and services into the hands of consumers. A radical transformation is underway right now in how packages and freight are moved from point to point. The consumers will lose a bit of service but will gain lower cost of moving their volume. The employees of the shipping companies (primarily the wage employees) are going to get tossed under the bus in this transformative environment. </p><p></p><p>UPS won't be immune to this change. UPS has tried to ignore what has been happening in FedEx for a few years now. In the next few years, UPS simply won't be able to keep on ignoring what is happening. When their market share keeps on getting poached by Fred and company, they will have to take steps to maintain their margins. The only way to do that (with a unionized workforce), is to gain concession after concession from that workforce to maintain profits for the company (which they will do - TRUST me). The other method is to get FedEx's business model to be declared to be illegal somehow, and remove the cost advantage FedEx possesses over UPS (UPS tried it back in 2009 with their support of having the RLA status removed from Express and lobbying to get litigation and legislation that would stop the Ground business model). Didn't work. Since method #2 didn't work, that leaves getting increasing concessions out of the wage employees of UPS. You don't think for a minute that the executive management is going to slash their compensation to the bone, do you?</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 1008770, member: 22880"] It isn't just plausible, it IS the business plan of Ground for the next 10-15 years. Fred S literally plans on eating your lunch. Fred isn't just gunning for the Express Couriers anymore, he's got UPS lined up in his sights. Yes... Ground is expanding rapidly. bbsam can attest to just how rapidly Ground is expanding. He gave a heads-up reagarding a meeting that is supposed to be taking place this Thursday. No indication as to what the topic will be, but I have a couple of guesses. Again, bbsam can comment.... short answer will be yes. They may complain. But when their shipping costs fall by between 10 and 20%, they won't complain too much. Everyone likes to fall back on "great service" for a defense against "low cost" providers. There is a bit of merit to that argument - but in the current environment, low cost is winning out over great service time and time again. Look at the airlines, big box retailers, cell phone providers, FedEx Ground... you name it. Low cost is winning out over great service an overwhelming majority of the time. FedEx is even DOWNSIZING Express right now - they are calling it "rightsizing", all out of the euphemism machine of media relations. The "great service" company is downsizing right now, not expanding. The low cost "arm" of FedEx is doing all of the expanding right now. Most of the wage employees of Express are in complete denial about what is happening in Express right now (and what is lined up for them in the next couple of years). "Head in the sand" doesn't even begin to describe the situation among the wage employees of Express right now. A substantial portion of Express volume is going to be shifted over to Ground (the "low cost" alternative) - all to improve margins. Will the move "stick" - I think so. The actual people receiving the volume may complain, but when the "bean counters" of the companies come back with, "We're paying 20% less than we were before, the minor issues are well worth the savings" - that will be the end of the argument in a cost control oriented world. [U]Fred S is shaping up to be for package shipping, what Sam Walton was for consumer item retailing[/U]. I can't stress this enough. Think of retailing back 30 years ago (for those old enough to remember), and look at today. Look back at how retailing was done in the 50's and 60's, and look at today. Complete and radical transformation of methods of getting goods and services into the hands of consumers. A radical transformation is underway right now in how packages and freight are moved from point to point. The consumers will lose a bit of service but will gain lower cost of moving their volume. The employees of the shipping companies (primarily the wage employees) are going to get tossed under the bus in this transformative environment. UPS won't be immune to this change. UPS has tried to ignore what has been happening in FedEx for a few years now. In the next few years, UPS simply won't be able to keep on ignoring what is happening. When their market share keeps on getting poached by Fred and company, they will have to take steps to maintain their margins. The only way to do that (with a unionized workforce), is to gain concession after concession from that workforce to maintain profits for the company (which they will do - TRUST me). The other method is to get FedEx's business model to be declared to be illegal somehow, and remove the cost advantage FedEx possesses over UPS (UPS tried it back in 2009 with their support of having the RLA status removed from Express and lobbying to get litigation and legislation that would stop the Ground business model). Didn't work. Since method #2 didn't work, that leaves getting increasing concessions out of the wage employees of UPS. You don't think for a minute that the executive management is going to slash their compensation to the bone, do you? [/QUOTE]
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