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FedEx Allocating Entire Advertising Budget On FXO
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<blockquote data-quote="Ricochet1a" data-source="post: 1015717" data-attributes="member: 22880"><p>Well... what you might not be considering, is that Office has BIG plans in the future of FedEx.</p><p></p><p>With the downsizing of Express, Office is going to take an ever increasing role in providing over-the-counter sales of both Ground and Express product - along with providing a location where FedEx (notice I didn't say Express only), customers can pick up their packages that Express and Ground have exhausted their delivery attempts upon.</p><p></p><p>Express is currently consolidating MANY of its stations into large "mega-stations" in an attempt to eliminate duplication of effort, simplify ramp sorts, enable consolidation of routes and minimize need for CSA staffing. The "slack" is to be taken up by Office employees. </p><p></p><p>Put simply, an Office employee costs FedEx about half as much as an Express CSA. Having Express shift customers over to Office for package drop-off and pickup (Express locations have their CSAs processing outbound Express AND Ground packages right now), will save FedEx quite a lot, and increase margin on Ground shipments even more. Combined with the currently being tested "2 strikes and you're out" delivery attempts for signature required packages, Office will become the MAIN location for non-commercial customers of FedEx to conduct their transactions, both inbound and outbound. </p><p></p><p>In addition, with the current testing of the "Cheetah" system for Office, Office will expand to offer same-day service within metro areas for shipments. </p><p></p><p>Given the "big picture" of FedEx (at least the plans of FedEx), the advertising of Office makes PERFECT sense. I have no doubt that further locations will be closed in the coming year or two (roughly 30 or so were closed early this year, solely do to location unprofitability). </p><p></p><p>From what I understand, Office will adopt a quasi- "hub and spoke" model for its locations. The "hub" locations will have full capability print services in addition to full shipment capability. The "spoke" locations will have minimal print capability, but be primary locations for customers to tender and pickup shipments. What will occur, is that "job shifting" will occur for print jobs. The "hub" locations will receive requests for more detailed or large print jobs from the "spoke" locations (via electronic means), run those jobs in a "production line" method, then run the completed jobs out to the location where the customer placed the order. The outlying locations can be maintained with minimal staffing, the central locations will be fully staffed to run continuous print jobs. Print jobs will even be shifted around locations, if one particular location is "swamped", while another has its employees not doing anything.</p><p></p><p>Combined with the Cheetah program, Office will have a "crew" of drivers running same day deliveries (along with a capablity of running print jobs out in fast order to customers) - which is anticipated to gain market share from shops which cater solely to large print customers (leaving the small orders for FedEx to grab up - ironically, by offering "superior service"). </p><p></p><p>FedEx does realize that "service" can create profits - but it has also come to the conclusion that service within the existing structure of Express isn't profitable enough for them. So as Express contracts (and its employees are shoved incrementally under the bus), Ground and Office will expand to take up the "void" - provide some measure of service (ahem...) and do so at a greatly reduced cost than is currently being realized within Express. </p><p></p><p>FedEx is deliberately on track to becoming the "Walmart of package shipping". The "Neiman Marcus" model wasn't as profitable (with the capital investment required) as a Walmart model could be (while maintaining the same level of capital investment). Quite simply, FedEx can make more by making it $0.25 at a time multiplied by a few million times a day, than making it $2 at a time, 250,000 times a day. This is what the Express employees are up against and most don't realize the implications thereof.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 1015717, member: 22880"] Well... what you might not be considering, is that Office has BIG plans in the future of FedEx. With the downsizing of Express, Office is going to take an ever increasing role in providing over-the-counter sales of both Ground and Express product - along with providing a location where FedEx (notice I didn't say Express only), customers can pick up their packages that Express and Ground have exhausted their delivery attempts upon. Express is currently consolidating MANY of its stations into large "mega-stations" in an attempt to eliminate duplication of effort, simplify ramp sorts, enable consolidation of routes and minimize need for CSA staffing. The "slack" is to be taken up by Office employees. Put simply, an Office employee costs FedEx about half as much as an Express CSA. Having Express shift customers over to Office for package drop-off and pickup (Express locations have their CSAs processing outbound Express AND Ground packages right now), will save FedEx quite a lot, and increase margin on Ground shipments even more. Combined with the currently being tested "2 strikes and you're out" delivery attempts for signature required packages, Office will become the MAIN location for non-commercial customers of FedEx to conduct their transactions, both inbound and outbound. In addition, with the current testing of the "Cheetah" system for Office, Office will expand to offer same-day service within metro areas for shipments. Given the "big picture" of FedEx (at least the plans of FedEx), the advertising of Office makes PERFECT sense. I have no doubt that further locations will be closed in the coming year or two (roughly 30 or so were closed early this year, solely do to location unprofitability). From what I understand, Office will adopt a quasi- "hub and spoke" model for its locations. The "hub" locations will have full capability print services in addition to full shipment capability. The "spoke" locations will have minimal print capability, but be primary locations for customers to tender and pickup shipments. What will occur, is that "job shifting" will occur for print jobs. The "hub" locations will receive requests for more detailed or large print jobs from the "spoke" locations (via electronic means), run those jobs in a "production line" method, then run the completed jobs out to the location where the customer placed the order. The outlying locations can be maintained with minimal staffing, the central locations will be fully staffed to run continuous print jobs. Print jobs will even be shifted around locations, if one particular location is "swamped", while another has its employees not doing anything. Combined with the Cheetah program, Office will have a "crew" of drivers running same day deliveries (along with a capablity of running print jobs out in fast order to customers) - which is anticipated to gain market share from shops which cater solely to large print customers (leaving the small orders for FedEx to grab up - ironically, by offering "superior service"). FedEx does realize that "service" can create profits - but it has also come to the conclusion that service within the existing structure of Express isn't profitable enough for them. So as Express contracts (and its employees are shoved incrementally under the bus), Ground and Office will expand to take up the "void" - provide some measure of service (ahem...) and do so at a greatly reduced cost than is currently being realized within Express. FedEx is deliberately on track to becoming the "Walmart of package shipping". The "Neiman Marcus" model wasn't as profitable (with the capital investment required) as a Walmart model could be (while maintaining the same level of capital investment). Quite simply, FedEx can make more by making it $0.25 at a time multiplied by a few million times a day, than making it $2 at a time, 250,000 times a day. This is what the Express employees are up against and most don't realize the implications thereof. [/QUOTE]
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