FedEx contractor revolt?

[Thebrownblob]

FedEx Ground To Drop Sunday Deliveries In Certain Markets | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[bacha29]

Apparently he's big enough to help bring change. And you sit and stare with envy.

How could I be envious one of the saddest displays of sniveling hat in hand request for assistance from his Emperor? He was flat out begging. Nobody including Spencer Patton is going to tell Fat Freddy how to run his empire.

 

[yadig]

Apparently he's big enough to help bring change. And you sit and stare with envy.

I’ll believe that when I see it

 

[59 Dano]

Airborne Express/DHL domestic, contractors, failed.

I'm talking simply about revenue vs cost when comparing the two options, not what should or shouldn't happen.

 

[59 Dano]

I think most of us agree with you that it looks like the contractor model is what they're aiming for. I see FedEx becoming like UPS having both air and ground shipments on the same trucks, but they will be Ground trucks (relabeled as just "FedEx" and nothing else). They think they can save hundreds of millions of dollars each year farming out shipments to contractors.

Don't be surprised if hourly Express couriers deliver some Ground packages and contracted Ground drivers deliver Express packages.

Neither business model is practical for the entire package delivery components of the FedEx Corporation. The hourly employee model is cost prohibitive but allows the highest level of employee control and direction. The contractor model is waaaay more cost effective but doesn't allow for much control. There are locations and circumstances that would warrant more of one than the other.

Take Anytown, for example. It has a Ground facility, it has an Express station. The Anytown market consists of Anytown with a population of 100k (located within Anycounty, for a total population of 150k) and several surrounding counties that aren't very big. Theoretically, you could divert a significant amount of Ground freight to Express to further densify Anytown area and make the hourly employees more productive. Additionally you could divert a nice chunk of the Express rural freight to Ground to cut down on nonproductive units of hourly labor. What works in the Anytown market area might not work in the Othertown market area.

It makes sense to identify the scenarios where one can clearly supplement the other. I'm not saying that's what will or won't happen but Network 2.0 is designed to increase the flexibility of each opco and to guide a package to the truck that's best suited to service that address on that day.

 

[Gone fishin]

Don't be surprised if hourly Express couriers deliver some Ground packages and contracted Ground drivers deliver Express packages.

Neither business model is practical for the entire package delivery components of the FedEx Corporation. The hourly employee model is cost prohibitive but allows the highest level of employee control and direction. The contractor model is waaaay more cost effective but doesn't allow for much control. There are locations and circumstances that would warrant more of one than the other.

Take Anytown, for example. It has a Ground facility, it has an Express station. The Anytown market consists of Anytown with a population of 100k (located within Anycounty, for a total population of 150k) and several surrounding counties that aren't very big. Theoretically, you could divert a significant amount of Ground freight to Express to further densify Anytown area and make the hourly employees more productive. Additionally you could divert a nice chunk of the Express rural freight to Ground to cut down on nonproductive units of hourly labor. What works in the Anytown market area might not work in the Othertown market area.

It makes sense to identify the scenarios where one can clearly supplement the other. I'm not saying that's what will or won't happen but Network 2.0 is designed to increase the flexibility of each opco and to guide a package to the truck that's best suited to service that address on that day.

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

 

[bacha29]

Don't be surprised if hourly Express couriers deliver some Ground packages and contracted Ground drivers deliver Express packages.

Neither business model is practical for the entire package delivery components of the FedEx Corporation. The hourly employee model is cost prohibitive but allows the highest level of employee control and direction. The contractor model is waaaay more cost effective but doesn't allow for much control. There are locations and circumstances that would warrant more of one than the other.

Take Anytown, for example. It has a Ground facility, it has an Express station. The Anytown market consists of Anytown with a population of 100k (located within Anycounty, for a total population of 150k) and several surrounding counties that aren't very big. Theoretically, you could divert a significant amount of Ground freight to Express to further densify Anytown area and make the hourly employees more productive. Additionally you could divert a nice chunk of the Express rural freight to Ground to cut down on nonproductive units of hourly labor. What works in the Anytown market area might not work in the Othertown market area.

It makes sense to identify the scenarios where one can clearly supplement the other. I'm not saying that's what will or won't happen but Network 2.0 is designed to increase the flexibility of each opco and to guide a package to the truck that's best suited to service that address on that day.

That's the Bezos way of doing it. Take the easy intown stuff and let the USPS run their wheels off and their tanks dry running that 10 mile a stop RD boxes. No Ground contractor in the entire United States of America would take that deal. " Doesn't have much control" Just exactly what part of the Ground network does FDX NOT control? This is when you start. This is when you stop. This is what you drive. This is what you wear This is where you go.. This is how you do it . Etc. Etc. Etc. Oh, but you're an independent contractor.....Yeah right.

Now as Express and Ground continue to be blended it is likely to become much more evident that an ISP is really nothing more than a labor lessor and temporary staffing agency. If that were to happen then the US Department of Labor might require contractors to register as employment agencies and have to operate accordingly.

 

[59 Dano]

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

You can make whatever case you want for it, but it ain't happening. Do you realize that they've run the numbers on this up one side and down the other? The initial outlay to ditch all the contractors would be well into the billions. How long would it take to recoup that? The annual increased operational and administrative costs would be deep in the nine figure range.

You're arguing that they'll save money with a significant net increase in costs. Baffling.

 

[bbsam]

Don't be surprised if hourly Express couriers deliver some Ground packages and contracted Ground drivers deliver Express packages.

Neither business model is practical for the entire package delivery components of the FedEx Corporation. The hourly employee model is cost prohibitive but allows the highest level of employee control and direction. The contractor model is waaaay more cost effective but doesn't allow for much control. There are locations and circumstances that would warrant more of one than the other.

Take Anytown, for example. It has a Ground facility, it has an Express station. The Anytown market consists of Anytown with a population of 100k (located within Anycounty, for a total population of 150k) and several surrounding counties that aren't very big. Theoretically, you could divert a significant amount of Ground freight to Express to further densify Anytown area and make the hourly employees more productive. Additionally you could divert a nice chunk of the Express rural freight to Ground to cut down on nonproductive units of hourly labor. What works in the Anytown market area might not work in the Othertown market area.

It makes sense to identify the scenarios where one can clearly supplement the other. I'm not saying that's what will or won't happen but Network 2.0 is designed to increase the flexibility of each opco and to guide a package to the truck that's best suited to service that address on that day.

That’s the kind of thinking that has completely FUBARRED Ground.

Engineers putting things together and then coming up with a time allowances and wage allowances. And it’s not a one time thing. Every year they preach efficiency but refuse to put out what model the have to support their theories.

Next thing you know you have contractors going bankrupt and Spencer Patton preaching to the papers.

And guess what? The company listens to the engineers because they are the ones telling the what they want to hear. I often wonder when engineers are called to defend their obvious miscalculations. I haven’t seen it happen but it’s obvious they don’t have it right.

 

[Gone fishin]

You can make whatever case you want for it, but it ain't happening. Do you realize that they've run the numbers on this up one side and down the other? The initial outlay to ditch all the contractors would be well into the billions. How long would it take to recoup that? The annual increased operational and administrative costs would be deep in the nine figure range.

You're arguing that they'll save money with a significant net increase in costs. Baffling.

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

 

[MAKAVELI]

Don't be surprised if hourly Express couriers deliver some Ground packages and contracted Ground drivers deliver Express packages.

Neither business model is practical for the entire package delivery components of the FedEx Corporation. The hourly employee model is cost prohibitive but allows the highest level of employee control and direction. The contractor model is waaaay more cost effective but doesn't allow for much control. There are locations and circumstances that would warrant more of one than the other.

Take Anytown, for example. It has a Ground facility, it has an Express station. The Anytown market consists of Anytown with a population of 100k (located within Anycounty, for a total population of 150k) and several surrounding counties that aren't very big. Theoretically, you could divert a significant amount of Ground freight to Express to further densify Anytown area and make the hourly employees more productive. Additionally you could divert a nice chunk of the Express rural freight to Ground to cut down on nonproductive units of hourly labor. What works in the Anytown market area might not work in the Othertown market area.

It makes sense to identify the scenarios where one can clearly supplement the other. I'm not saying that's what will or won't happen but Network 2.0 is designed to increase the flexibility of each opco and to guide a package to the truck that's best suited to service that address on that day.

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

 

[yadig]

Don't be surprised if hourly Express couriers deliver some Ground packages and contracted Ground drivers deliver Express packages.

Neither business model is practical for the entire package delivery components of the FedEx Corporation. The hourly employee model is cost prohibitive but allows the highest level of employee control and direction. The contractor model is waaaay more cost effective but doesn't allow for much control. There are locations and circumstances that would warrant more of one than the other.

Take Anytown, for example. It has a Ground facility, it has an Express station. The Anytown market consists of Anytown with a population of 100k (located within Anycounty, for a total population of 150k) and several surrounding counties that aren't very big. Theoretically, you could divert a significant amount of Ground freight to Express to further densify Anytown area and make the hourly employees more productive. Additionally you could divert a nice chunk of the Express rural freight to Ground to cut down on nonproductive units of hourly labor. What works in the Anytown market area might not work in the Othertown market area.

It makes sense to identify the scenarios where one can clearly supplement the other. I'm not saying that's what will or won't happen but Network 2.0 is designed to increase the flexibility of each opco and to guide a package to the truck that's best suited to service that address on that day.

That use to be the case for ground. Have you seen their profit margins lately? Wall Street has and haven’t liked it! I don’t see how paying contractors more money will help the bottom line.

 

[bbsam]

That use to be the case for ground. Have you seen their profit margins lately? Wall Street has and haven’t liked it! I don’t see how paying contractors more money will help the bottom line.

Possibly because they get to keep the customers they have and attract others. Word is they’ve been losing customers lately.

 

[MAKAVELI]

Possibly because they get to keep the customers they have and attract others. Word is they’ve been losing customers lately.

I think customers are realizing that UPS is more reliable and stable. Something FedEx hasn't yet realized by having separate OPCOs.

 

[bbsam]

I think customers are realizing that UPS is more reliable and stable. Something FedEx hasn't yet realized by having separate OPCOs.

Ground showed promise. They grew their customer base year after year.

But in the last few years their strategy has changed and I have no idea what the vision is but it isn’t going very well right now.

 

[Fred's Myth]

Ground showed promise. They grew their customer base year after year.

But in the last few years their strategy has changed and I have no idea what the vision is but it isn’t going very well right now.

DANOVISION!

 

[yadig]

Possibly because they get to keep the customers they have and attract others. Word is they’ve been losing customers lately.

 

[bbsam]

DANOVISION!

Could be! Raj probably needs to do something quickly though. Something that includes admitting “mistakes have been made”. Not sure he’s capable.

 

[yadig]

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!

 

[MAKAVELI]

Ground showed promise. They grew their customer base year after year.

But in the last few years their strategy has changed and I have no idea what the vision is but it isn’t going very well right now.

FedEx is very short sighted and hasn't adapted very well post COVID-19. The company is too top heavy with no real talent at the top to want to change. FedEx has enjoyed the profits from cheap labor for decades and now that time is coming to an end. Either they will adapt, do what's right and thrive or be stuck in their ways and die.