Amazon to use HD and Ground instead of Express
- Thread starter Doc Sorting Dude
- Start date
MaineGroundDriver
Well-Known Member
Seems half of Smartpost is already Amazon .. and it confuses the heck out of customers ..
I've read some pretty bad reviews of OnTrac online. Whatever else FedEx is it's service reliability is still tops. It's brand name gives it a leg up on the OnTracs of the world. To say we can't compete with UPS is pretty silly. If our service is comparable, if not better, and our pricing is lower then how can we not compete?
You are using If's there. Price wise it can go either way, neither is always cheaper than the other, very competitive there. Service is close, there are dings on both sides in different areas but comes in pretty close at the end. Probably UPS's main win is pickup flexibility vs Fedex. As for Regionals it becomes a price thing, if either UPS or Fedex stay in the ballpark then they will own it, if they can't compete on price and the alternatives are only a notch worse in service, then they look long an hard at a regional. Could they invest and buy up regionals long term?
FedEx Ground is clearly cheaper than UPS with comparable service. You are used to FedEx keeping pricing close as they build up the infrastructure. Due to the much lower cost of labor Ground is in a position to lower prices that I don't believe UPS will be able to match. If the regionals are consistently worse in service the customers who try them will come back to us. They don't want to tarnish their brand with bad service.
The ground rates between both companies are extremely comparable and fedex doesn't always outbid ups, far from that. Where ground drivers are cheaper, it's not all about drivers, there are plenty of other people behind them where wages are much more comparable. But lets say Fedex saves X vs UPS on drivers, UPS makes it back because they have higher package volume. It doesn't take a lot of packages more to pay for a ups driver over any fedex driver. Perhaps we get caught up with that math a bit too much. As for regionals and brand that is correct, but some regionals are improving and keeping customers, not all and not sure how many. But it is there, perhaps someday Amazon will tap into those investing big and brand them Amazon.
Simple math...UPS pays more than twice what an average Ground guy makes so FedEx can charge less with more leeway if they choose to go after big UPS shippers. That reduces UPS volume and makes it more difficult to lower prices to compete as they are contractually bound to pay not only higher wages but very good benefits too, which Ground doesn't offer. Ground takes away enough volume with aggressive price structuring and UPS starts hurting. FedEx Ground is the Empire's Death Star.
MrFedEx
Engorged Member
Whenever I see an OnTrac driver, they are invariably lost, driving a dented-up piece of crap truck, and generally unprofessional looking. And his truck is full of nothing but Amazon. That said, Amazon is run by a skinflint in Mr. Bezos. He is well-known for running sweatshop-type distribution warehouses and paying low wages for some very hard work. Like FedEx, the execs at Amazon do very nicely, thank you. I'm just saying that Amazon strikes me as a company that will usually go for the lowest price, not necessarily quality.
MrFedEx
Engorged Member
Yep. This is why UPS should have snuffed-out Ground when they could have and why they need to fight like Hell now (instead of being happy little dandelions) to challenge the bogus Ground ISP model. Eventually, UPS is going to lose a bunch of business, but I guess their top people cannot figure that out.
Brown287
Im not the Mail Man!
What you fail miserably to realize is a thing called anti-trust laws. The question has come up before in regards to why UPS doesn't just price competition out of business. It always comes down to that. UPS has to operate with different rules due to its size. The rules never benefit the big dog.
whenIgetthere
Well-Known Member
One look at how many of Amazon's shipments are packed (though lack of packaging would be a more apt description), will confirm this.
STFXG
Well-Known Member
All the ontrac trucks i see are new Nissan nv2500s...
Brown287
Im not the Mail Man!
The OnTrac in Gilroy is one beat up sprinter and one really ran down Chevy van. Heck the van was down for god only knows what and the guy had the building spare. I tell you I've never seen a delivery vehicle in such disrepair. It had bald tires and a rear bumper held on by wire. It's actually kind of funny how ground gets out scammed by these regional carriers. Also side note, there seems to be a new driver each month. Probably gets his first check and says "what the #*^%!"
Cactus
Just telling it like it is
No kidding!
Brown287
Im not the Mail Man!
OnTrac makes us all look great! It's almost funny how far they leave packages from the door. It's like they play a game with themselves to see just how far they can get from the door before a complaint. Thanks to them I now have a handful of stops that come with special instructions printed on label. The FedEx express lady and I get a good chuckle over it though.
But the thing is UPS is still putting more in a truck on avg and that amount equates to more than the difference between just the driver. UPS profits 3 to 4x more than Fedex, even with paying drivers twice as much. There are reasons why this happens. I get it that you would think it hurts UPS when Fedex takes business but their profits have never been higher, so somehow they have a working plan even if they lose jobs here or there.
CJinx
Well-Known Member
The ones with the blue tape on them seem to be packed reasonably well, but everything else is a crapshoot; especially if the product is something large like a bag of dog food. I can use various company cardboard boxes to construct a better/tighter fit box than the huge boxes they use for oddly shaped/sized items.
God that last sentence sounded incredibly dirty.
giggity
MrFedEx
Engorged Member
Ground needs an OnTrac to make it look good. Kind of like a wife-beater bringing an axe murderer to court with them as a character witness.
But you are thinking in terms of the past, I'm pointing out how FedEx is positioning itself to take business away from UPS. The billions they make in profit are a fraction of their total payroll and benefits costs. It will take time but UPS just doesn't have the leeway that Ground does to lower prices, even more so as Ground takes business with lower prices.
