You answered your own question. If it were cheaper to combine the two and make the company bigger profits then they'd do it in a heartbeat. They aren't keeping them separate on principal, the only thing that matters to them is profit.
Economics
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You answered your own question. If it were cheaper to combine the two and make the company bigger profits then they'd do it in a heartbeat. They aren't keeping them separate on principal, the only thing that matters to them is profit.
Every bit of Express freight is trucked at some point but most of it ends up on a plane.
MAKAVELI
Well-Known Member
Exactly the advantage of the cheap labor force at ground is greater than the savings of combining the two operating companies.
Ricochet1a
Well-Known Member
It costs 3-4 times as much to move package volume by air freight as it does via overland truck (distances 500+ miles..., anything shorter than that, air freight becomes ENORMOUSLY cost inefficient).
http://siteresources.worldbank.org/...5680661-1253555418746/tp-26-Air_Cargo_Ch4.pdf
Go to page 5....
An MD-11 costs about $15,000 an hour to operate. It can carry the equivalent of 6 full length trailers. In an hour of operation, that MD-11 can travel approximately 500 miles, give or take depending on time spent in pattern, climb out, etc. Half of that operating cost of an MD-11 is fuel expense. The remainder is depreciation, maintenance, aircrew expense and other cost factors.
So, to move the equivalent of a a single full length trailer's volume in packages 500 miles by MD-11, it costs $2500, or put another way, $5 per mile per full trailer's worth of packages in a MD-11.
To move a tractor trailer full of packages, it costs in the neighborhood of $1.50 per mile traveled. This cost includes fuel, maintenance, wages and depreciation for the equipment.
Infographic shows ‘the real cost of trucking’ | A Trucking Journal
It breaks down the costs of fuel ($70,000 a year), driver pay (36 cents per mile), purchase costs for the tractor ($100,000) and trailer ($50,000), repairs and maintenance (12 cents per mile), insurance (5 cents per mile), tires (3 cents per mile), permits, tolls and licensing (2 cents per mile). All totaled, a single tractor-trailer rig costs a average of $1.38 a mile or a total of $180,000 a year to operate.
So it costs 3-4 times as much to move a volume of packages by air freight over distance, than it does to move the same volume by tractor trailer. If the tractor trailer were to be 'doubles', the cost for tractor trailer would fall by at least 33% to potentially 40% compared to moving a single trailer.
Express moves as much by tractor-trailer as it can. This EXCLUDES the obviously necessary movement between stations and ramps. The hubs have their sort operations specialized to enable freight which can be moved by tractor-trailer and still make commitment, to have that movement completed with overland movement.
A portion of deferred volume in Express NEVER goes onto an aircraft. It is loaded onto tractor-trailer (roller bed) at ramps, moved to either to hubs or in some cases directly to another ramp if there is sufficient volume to justify the route, sorted, then moved again via overland tractor-trailer to the destination ramp.
Another portion of deferred volume is moved on one segment by air, then after arriving at a hub, is sorted and departs on tractor-trailer routes (if the receiving ramp is close enough to enable the volume to meet ramp sort times to make commitment).
http://siteresources.worldbank.org/...5680661-1253555418746/tp-26-Air_Cargo_Ch4.pdf
Go to page 5....
An MD-11 costs about $15,000 an hour to operate. It can carry the equivalent of 6 full length trailers. In an hour of operation, that MD-11 can travel approximately 500 miles, give or take depending on time spent in pattern, climb out, etc. Half of that operating cost of an MD-11 is fuel expense. The remainder is depreciation, maintenance, aircrew expense and other cost factors.
So, to move the equivalent of a a single full length trailer's volume in packages 500 miles by MD-11, it costs $2500, or put another way, $5 per mile per full trailer's worth of packages in a MD-11.
To move a tractor trailer full of packages, it costs in the neighborhood of $1.50 per mile traveled. This cost includes fuel, maintenance, wages and depreciation for the equipment.
Infographic shows ‘the real cost of trucking’ | A Trucking Journal
It breaks down the costs of fuel ($70,000 a year), driver pay (36 cents per mile), purchase costs for the tractor ($100,000) and trailer ($50,000), repairs and maintenance (12 cents per mile), insurance (5 cents per mile), tires (3 cents per mile), permits, tolls and licensing (2 cents per mile). All totaled, a single tractor-trailer rig costs a average of $1.38 a mile or a total of $180,000 a year to operate.
So it costs 3-4 times as much to move a volume of packages by air freight over distance, than it does to move the same volume by tractor trailer. If the tractor trailer were to be 'doubles', the cost for tractor trailer would fall by at least 33% to potentially 40% compared to moving a single trailer.
Express moves as much by tractor-trailer as it can. This EXCLUDES the obviously necessary movement between stations and ramps. The hubs have their sort operations specialized to enable freight which can be moved by tractor-trailer and still make commitment, to have that movement completed with overland movement.
A portion of deferred volume in Express NEVER goes onto an aircraft. It is loaded onto tractor-trailer (roller bed) at ramps, moved to either to hubs or in some cases directly to another ramp if there is sufficient volume to justify the route, sorted, then moved again via overland tractor-trailer to the destination ramp.
Another portion of deferred volume is moved on one segment by air, then after arriving at a hub, is sorted and departs on tractor-trailer routes (if the receiving ramp is close enough to enable the volume to meet ramp sort times to make commitment).
MAKAVELI
Well-Known Member
It's what makes that 17 percent profit margin buddy. Low wages and no benefits equals more pure profit per package plain and simple. FedEx can charge the same or even a little less than the competition and still make more money per package. It's not rocket science.
There actually is, if it's within a 1 day delivery range, it is guaranteed, guarantee means shipping cost reimbursed.
The reason Express Overnight is needed is it can go from end to end in the country overnight, where ground is a small radius.
Actually as you know Express service is down, esp on 2-Day. I see better % success with ground vs 2 day at this time. Your overnight is still looking solid though.
Kevinmevin
Active Member
Is that why I rarely see Express Trailers even though I am close to an express hub. I see custom critical more then express trailers believe it or not.
MrFedEx
Engorged Member
Most trucking is contracted-out.
northbound
Well-Known Member
Most Express trucking is contracted out? If so wouldn't the trailers still be owned by FedEx and say so on the side? I haul Ground trailers but still put FedEx Ground on my truck
thedownhillEXPRESS
Well-Known Member
They aren't "Express owner operator contractors.". Not yet at least.
Cactus
Just telling it like it is
Pipedream Express
MrFedEx
Engorged Member
PRIME, US Express, Swift. You know, all the contract carriers that bounced FedEx RTDs out of positions.
northbound
Well-Known Member
Wow Prime says it all
MAKAVELI
Well-Known Member
Optimus Prime.
MrFedEx
Engorged Member
There is apparently a lot you don't know about Express operations.
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