FedEx contractor revolt?

[thedownhillEXPRESS]

We’ve got to quit comparing Amazon and the ground model. I know they both are contracting out deliveries and it’s somewhat been working. Amazon is delivering a product they house. We are delivering a service and failing at it miserably!

Very smart observation .

 

[One day at a time]

Once again , they’re moving to the UPS. Model. One truck , one area. Density is a delivery companies best friend. Contractors make no sense anymore , the landscape has changed. 125 stops , some pickups ,better pay , less gas and wear and tear on vehicle, quality drivers , better service and no contractor headaches.
Like it or not , it’s coming. It’s the future and it’s survival for the company

Not any more we have late air every day. So some one has to bring it to us,then we get to re run our entire route again.

 

[59 Dano]

Not happening overnight , but it’s happening. No other way

As stated earlier, it adds an exponential increase in expenses (plus upfront costs) that isn't offset by anything else or any combinations of anything else. It's spending dollars to save quarters.

 

[59 Dano]

Bye bye RLA.. it's been nice knowing ya.

Still holding onto that pipe dream that Express isn't an airline?

 

[Nolimitz]

It's spending dollars to save quarters.

And this would be new to FedEx?

DRA failure
Step program failure
LMO failure
employee retention/hiring referral bonus failure
EStar the next failure
Network 2.0 whatever that is TBD

 

[Gone fishin]

As stated earlier, it adds an exponential increase in expenses (plus upfront costs) that isn't offset by anything else or any combinations of anything else. It's spending dollars to save quarters.

Yep , it’ll get worse before it gets better. Companies have to adapt to the changes in the world.

 

[59 Dano]

Yep , it’ll get worse before it gets better. Companies have to adapt to the changes in the world.

It still makes no sense, but I've seen worse here.

We were about to lose RLA status a million times.
Amazon was going to buy us out a half million times.
Amazon was going to start a regular P&D operation like ours and run us out of business.
Several others that I've long forgotten.
What's one more?

 

[Gone fishin]

And posters to message boards have to realize that they aren't going to save money on something by drastically paying more for it.

The company is falling apart, you don’t think this calls for change.

 

[It will be fine]

The company is falling apart, you don’t think this calls for change.

The current problems with Ground are entirely self inflicted by FedEx. They’ve raised their shipping charges, they dramatically raised their fuel surcharge. They’ve just chosen to keep all that revenue and cut the rates they pay contractors. That’s a choice, they could make a different choice tomorrow if service gets bad enough.

 

[59 Dano]

The company is falling apart, you don’t think this calls for change.

"The company is falling apart and my solution is to increase costs when doing so won't fix anything."

 

[Gone fishin]

"The company is falling apart and my solution is to increase costs when doing so won't fix anything."

One truck , one area. Problem solved. UPS pays 40 an hour and profits. It’s provin

 

[59 Dano]

One truck , one area. Problem solved. UPS pays 40 an hour and profits. It’s provin

Looks like you've put a lot of thought into this. If you can iron out the math you might be on to something.

I'd love to see the math of how this works based on actual FedEx data. It doesn't have to be exact, just reasonable ballpark figures. Sure you wouldn't plant your flag here without having done that.

 

[fatboy33]

One truck , one area. Problem solved. UPS pays 40 an hour and profits. It’s provin

It's interesting how UPS can pay 40HR but the "one Truck one Area" only makes sense if we all drive W900s. I see 3 different ground drivers in the area I cover and some of the stuff they pull out of their trucks should be tied to a pallet. Fdx would have to shrink our areas for that to happen and add more drivers which won't happen.

 

[compscigrad]

Looks like you've put a lot of thought into this. If you can iron out the math you might be on to something.

I'd love to see the math of how this works based on actual FedEx data. It doesn't have to be exact, just reasonable ballpark figures. Sure you wouldn't plant your flag here without having done that.

Even better, here's a source with analyst comments: Highly Paid Union Workers Give UPS a Surprise Win in Delivery Wars

Here's a gem:

"Yet, while Smith has been able to hold union organizers at bay by relying on contractors, FedEx Ground’s savings on labor lately hasn’t filtered down to the bottom line. That’s because its 5,600 contractors are mom and pop outfits, many with fewer than 10 employees. They face the same elevated costs inherent to small businesses. They pay full price for vehicles, tires, oil, parts, maintenance, and other items that UPS buys at scale. Each contractor has the same back-office work and often farms it out to third parties, adding to expenses."

and there are many more in the article.

Or I suppose this is one of those bigwig decisions that us common folk are too stupid to understand. Spending dollars to save quarters and all.

 

[MAKAVELI]

Still holding onto that pipe dream that Express isn't an airline?

Express can be an Airline for eternity. The drivers just won't be. Combining the two OPCOs will have the driver statue challenged.

 

[59 Dano]

Even better, here's a source with analyst comments: Highly Paid Union Workers Give UPS a Surprise Win in Delivery Wars

Here's a gem:

"Yet, while Smith has been able to hold union organizers at bay by relying on contractors, FedEx Ground’s savings on labor lately hasn’t filtered down to the bottom line. That’s because its 5,600 contractors are mom and pop outfits, many with fewer than 10 employees. They face the same elevated costs inherent to small businesses. They pay full price for vehicles, tires, oil, parts, maintenance, and other items that UPS buys at scale. Each contractor has the same back-office work and often farms it out to third parties, adding to expenses."

and there are many more in the article.

Or I suppose this is one of those bigwig decisions that us common folk are too stupid to understand. Spending dollars to save quarters and all.

Far be it from me to point out that the paragraph is comparing the costs faced by CONTRACTORS and not by FEDEX.

 

[59 Dano]

Express can be an Airline for eternity. The drivers just won't be. Combining the two OPCOs will have the driver statue challenged.

I'm sure there's as much to this claim of yours as to the rest.

 

[59 Dano]

It's interesting how UPS can pay 40HR but the "one Truck one Area" only makes sense if we all drive W900s. I see 3 different ground drivers in the area I cover and some of the stuff they pull out of their trucks should be tied to a pallet. Fdx would have to shrink our areas for that to happen and add more drivers which won't happen.

But haven't you heard? If FedEx will pay significantly more to get the same result, it means they'll make more profit!! They can't lose!

 

[compscigrad]

Far be it from me to point out that the paragraph is comparing the costs faced by CONTRACTORS and not by FEDEX.

KOOL! I didn't know the rate Fedex paid to contractors wasn't tied to the contractors operating costs! Imagine if "contractors" had the benefits of economies of scale! They could reduce operating costs and be more profitable, or GASP, they maintain the same profitability while "billing" Fedex for less! gimme your boss's number you ing suck at your job.

 

[It will be fine]

KOOL! I didn't know the rate Fedex paid to contractors wasn't tied to the contractors operating costs! Imagine if "contractors" had the benefits of economies of scale! They could reduce operating costs and be more profitable, or GASP, they maintain the same profitability while "billing" Fedex for less! gimme your boss's number you ing suck at your job.

Rates are only loosely tied to operating costs. That’s the problem right now and the reason many contractors are going bankrupt. Rates aren’t adjusting upwards to offset the cost increases. FedEx profits more and insulates themselves from the cost increases.