fedex flat rate

Discussion in 'FedEx Discussions' started by hypo hanna, Jan 25, 2014.

  1. hypo hanna

    hypo hanna Well-Known Member

    Trying to make sense of this. The management continues to whine about us not making enough profit per package and now they want to flood the system with low value, high labor freight.
    Captain wavey hands says he is going after the occasional shipper. Grandma sending a sweater , eBay sellers etc. inexperienced shippers who need more coddling and who have more bad address type issues. More labor for the same low price. Brilliant!
  2. dezguy

    dezguy Well-Known Member

    I had a customer ask me about this a few weeks ago. I had no idea what she was talking about and figured she was talking about USPS. We haven't heard of anything like that here nor are there any rumblings about it happening.... Stupid idea.
  3. 1989

    1989 Well-Known Member

    Follow the USPS and watch the billions in losses pile up
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  4. Dex01

    Dex01 Banned

    Have you ever heard of the Postal Accountability and Enhancement Act of 2006? It forced the PO to prepay for nearly 21 BILLION in future benefits, which you must concede, would be very difficult for most businesses.
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  5. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Flat rate is a very smart business move.
  6. Mr. 7

    Mr. 7 The monkey on the left.

    What happens when Mr. or, Mrs. flat rate (grandma) sends a pkg., pays cash, and then we try to hit it with all sorts of bad address corrections?
  7. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    You can't hence the term flat rate.
  8. 1989

    1989 Well-Known Member

    Flat rate + + + (we'll send you the final bill)
  9. SmithBarney

    SmithBarney Well-Known Member

    We asked what the rate was on the "flat rate" boxes... we were told it depends on the shipper... "facepalm" so apparently it's not a flat rate at all...
  10. MrFedEx

    MrFedEx Engorged Member

    The USPS Flat Rate box is a good deal. If you wanted to ship lead bars and they fit within the box, it goes for the flat rate. I know several shippers that specifically take advantage of this and save themselves a ton of money.
  11. hypo hanna

    hypo hanna Well-Known Member

    OK, so in that scenario, where is the profit to fedex?
  12. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    The profit comes in to play when the shipper uses the flat rate box for documents rather than lead bars.
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  13. CJinx

    CJinx Well-Known Member

    They still have Grandma's name and address, I'm sure they'll send her a bill for any additional charges incurred en route.
  14. upschuck

    upschuck Well-Known Member

    Does it really cost that much more to ship lead bars, rather than documents in same box? Maybe a minute more of labor throughout the process. Just because FedEx and UPS ask for more cash for heavier boxes doesn't mean they cost much more to deliver.
  15. TUT

    TUT Well-Known Member

    I haven't done a deep analysis yet, but typically this benefits home shipper types, anyone of volume their negotiated rates will be cheaper, even if it is more difficult to understand the bottom line pricing will win 99 out of 100.

    But for home shippers, this should be a nice boost for Fedex, when someone walks up to the counter at Fedex Office they should notice a better rate if their stuff fits into the Fedex packaging which is required. Fedex/UPS lose a lot of biz to USPS imo as people get sticker shock when they are given the cost of shipping. That alone will take time for people to know about this and check out Fedex again as they normally just go to the Post Office today. I also believe this is an Express only option.
  16. FedExRookie

    FedExRookie Member

    I am disagreeing with you because I just used my account to get the shipping rates. They are 'losing money' even on docs going Express Saver.

    Edit: I'm going under the assumption people using flat rate want to save money and are in no rush, so they won't really be using anything other than XS.

    .5 LB DOC Fedex Envelope
    18.15 xs
    25.12 2day
    27.69 2day am
    35.10 SO
    36.46 PO
    70.25 FO

    20 Lb Large Box

    69.87 xs
    111.62 2day
    128.40 2day am
    163.23 so
    169.00 po
    202.79 fo

    ONE RATE BOX - Same Address

    13.75 XS
    38.00 2day
    46.50 2day am
    55.50 SO
    83.50 PO
    118.50 FO

    So they are making less of a profit, but they are getting more customers in. I remember my OPMA professor last semester said she went to FedEx and shipped with USPS flat rate in the end. The prices were insane, she would have used the ONE RATE boxes (i'm assuming) if it was there when she intended to ship via Fedex.
  17. TUT

    TUT Well-Known Member

    That's what I know. If you went to office and were just a Joe, you'd end up with ground because everything else is like "Get the F outta here!" rates. This is going to make it allowable, it is going to take some time for people to realize. I assume once you get the sticker shock, you don't go back. You walk out and think "Stay Away", like Jiffy Lube.

    The pricing for a Joe going up to the counter using One Rate is like them getting a decent negotiated rate. So it's now do we get more volume this way?

    Are these walk ups a huge part of the bottom line?
    Last edited: Jan 26, 2014
  18. MrFedEx

    MrFedEx Engorged Member

    A USPS Medium Flat Rate Box is $12.35 for Priority Mail, generally a 2-3 day service unless it is really close. Our rates are not competitive. I believe the rate on the large USPS Flat Rate Box is $15.35.
  19. TUT

    TUT Well-Known Member

    Not digging deep here, but it is stated above that 3 Day Fedex OneRate is $13.75 for a 20 lb large box.

    Even if it isn't equal, there is a huge difference between Retail Rates normally and USPS. With One Rate looking at some #'s here, that gap is greatly reduced.
  20. FedExRookie

    FedExRookie Member

    I'm not arguing if we're competitive in pricing. My post was in response to show documents using one rate aren't going to make fedex $$. one rate is made to keep customers that walk in the door and trust the FedEx name and increase overall profit and not profit per package.