Fedex getting "grounded"?

[Pasaholic]

I was talking to the Fedex groud guy today and he told me there volume is way down, also I have noticed less fedex ground packages laying around at stops lately. Also have noticed some pu accounts that were mainly using Fedex are now using us again, seems like there may be trouble at Fedex ground.

 

[FAVREFAN]

I was talking to the Fedex groud guy today and he told me there volume is way down, also I have noticed less fedex ground packages laying around at stops lately. Also have noticed some pu accounts that were mainly using Fedex are now using us again, seems like there may be trouble at Fedex ground.

It's the economy. We'll be lucky to flat line our ground this quarter. FDX ground volume is in the same boat. The I.R.S. is their new problem.

 

[toeknee2gx]

^^

zactly, UPS and FDX volume are good indicators of the economy...

 

[UpstateNYUPSer(Ret)]

Although the economy can indeed be blamed for a portion of their decline, I have heard a lot of complaints from my customers about service issues with FedEx Ground. The Express part is just fine and I rarely hear of service issues with them. I pick up from a MBE store and they urge their customers to use us rather than FedEx Ground due to some of the service issues, including time in transit.

There was an earlier thread which dealt with the concept of service and, as was discussed, that is the one commodity that we can sell that will not cost us anything and may reap huge rewards, especially in this economic turndown (UPS still will not recognize that we are in a recession.) Do the little extras and we will keep our volume.

 

[dannyboy]

NY

Thing is, some people and companies do great during a recession when compared to others.. And this might be the case for UPS/FDX

d

 

[paganpink]

According to the recent yearly feedback meeting we have been beating big purple like a drum as far as taking volume from them. A graph of the last few years shows mirror opposite trends with their volume plummeting and ours spiking upward for at least the last year and a half. Plus, we are both taking volume from DHL who appaers to be on its last legs after losing about $900 million or so in the US market. Perhaps they thought that they could run it like they do their monopoly class mail in Germany where they charge about .65 cents for a letter in a country the size of Texas. And their prices aren't the worst of their problems at DHL- their service is. They had an on time record in the 70% range a few years ago! That's a level that even our post office beats handily with the plodding improvements they have made, not the least of which is using multi billion dollar contracts with UPS and FDX to transport the mail for them before they break it out and deliver it. We are in an industry where even the ground packages are well over 99% on time with the industry leaders, and the next day air sector is 99.9% plus (depending mainly on weather) as UPS and FDX compete to become better and better. Much of the last small percentage point of reliability improved quickly after we started guaranteeing our on time deliveries forcing us to "get better or get gone". A stroke of genius on UPS 's part I believe. Once the ground was offered the same thing it also had an impact on reliability even though there were people saying that we would lose our rear ends if we dared to put guarantees on such a lowly thing as a ground parcel! In both cases UPS led the way with Fedex following soon after. FDX ( their ticker symbol) is still less reliable with ground with a major factor being coverage for drivers that are sick or "go down" on area and can't finish their routes. Although FDX has brought much needed improvement over the old RPS policies which oftentimes saw loads sitting all day if a driver was sick (since it was mainly considered the drivers responsibility to get his area covered) they had still better hope their workforce doesn't continue organizing, as some of their buildings have voted to do recently, because their cost advantage is the only thing making them competitive. No matter how a UPS person feels about how they are treated they are paid much better and have many things such as overtime after 8/day rather than 40/week that ensure even greater money than a comparable FDX air driver. FDX ground by contrast doesn't pay squat, and you have 0 benefits including having to pay for your own social security and not even being covered by workers compensation as a so called subcontractor.

 

[feeder53]

I agree with NY, it is the service and the little extras that keep us up there. I will not choose Fedex to ship due to some issues with delivery to my HOR.

 

[FAVREFAN]

As much as everyone thinks the sky is falling at Fedex, DHL, and the USPS......we will be competing against them for decades to come. Get used to it.

 

[toeknee2gx]

Something to remember is that yes, even though UPS's ground service is the 300lb gorilla when compared to other companies, our growth basically mimics the growth rate of GDP. So when the economy slows, of course Fed-ex will feel the effects much harder than us. We may a little more resiliant because of our market share but make no mistake about it, we will feel the effects just like we did last qtr. Domestic growth rose only about 2% while international jumped about 18%.

Yes we may still be kicking the other guys asses but we are not immune to feeling some growing pains too.

late edit: just like FAVREFAN said above, the competition isnt going anywhere.

 

[toeknee2gx]

UPS says Feb volumes down, could hurt earnings

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN1219219620080312

CHICAGO (Reuters) - Citing worsening economic conditions package delivery company United Parcel Service Inc (UPS.N: Quote, Profile, Research) said on Wednesday its U.S. volumes were down in February, which could make it hard to meet its first-quarter earnings outlook.
"If these trends continue through March, our earnings guidance for the first quarter will be difficult to achieve," Chief Financial Officer Kurt Kuehn said in a statement.
UPS has forecast first-quarter earnings per share in a range from 94 cents to 98 cents. Analysts, on average, have predicted EPS for the quarter of 96 cents, according to Reuters Estimates.
Atlanta-based UPS said that while U.S. volumes declined virtually across its "entire customer base" in February, its international volumes, including U.S. export volumes, continued to show strong growth. Kuehn also said that the company's international and supply chain units looked likely to meet first-quarter targets.
Like its main rival FedEx Corp (FDX.N: Quote, Profile, Research), UPS is considered a bellwether of U.S. economic activity, based on the premise that in a robust economy companies and individuals tend to send more packages and that the opposite is true in a downturn.
Despite the present economic challenges, UPS reiterated its full-year forecast of earnings per share within a range from $4.30 to $4.50. Analysts have predicted full-year EPS for the world's largest package delivery company of $4.40.
UPS also reiterated its goals of 6 percent to 8 percent annual revenue growth to 2010, compound annual EPS growth in a range from 9 percent to 14 percent and return on invested capital in a range from 23 percent to 25 percent.
In trade on the New York Stock Exchange, UPS shares were down 40 cents, or 0.6 percent, to $72.39.

 

[FAVREFAN]

Nice post Toeknee. Hopefully everyone will read it before posting the usual made up fallacies about how great we are doing and how DHL is going out of business.
We move 7% of the US economy everyday. So goes the economy, so goes UPS. We are as cyclical as cyclical gets.
I'm not saying we aren't the best, because we are the best. But there is nothing we can do when the economy is slowing in the U.S. other than continue to offer the best service and ride it out.

 

[Leftinbuilding]

I heard a commercial on the radio the other day where Fed Ex Ground and Fed EX Home were asking for "temporary" drivers. "Temporary" was not defined. This was in NorCal. (KNBR in SF) Made me wonder if they have routes sitting.

 

[pkg-king]

In an attempt to see the glass half full, rural customers shop on the internet more when gas prices rise. Also, business' tend to ship more to business' locally and do away with their own delivery guy when gas prices rise. I see it in my own little corner of the world. Some of my pick-ups ship packages to other business' on my route. They say it is more economical than running their own guy in a van around town and that we capture a signature electronically reducing their paperwork.

 

[FAVREFAN]

In an attempt to see the glass half full, rural customers shop on the internet more when gas prices rise. Also, business' tend to ship more to business' locally and do away with their own delivery guy when gas prices rise. I see it in my own little corner of the world. Some of my pick-ups ship packages to other business' on my route. They say it is more economical than running their own guy in a van around town and that we capture a signature electronically reducing their paperwork.

That's great but it's not showing up in the numbers. Did you read toeknee's post? Have you used Worldship? Look into the fuel surcharge. It will grow with the rising crude prices. That gets passed to the end client in proportion. Our U.S. ground will be nearly flat this quarter.

 

[Coldworld]

Something to remember is that yes, even though UPS's ground service is the 300lb gorilla when compared to other companies, our growth basically mimics the growth rate of GDP. So when the economy slows, of course Fed-ex will feel the effects much harder than us. We may a little more resiliant because of our market share but make no mistake about it, we will feel the effects just like we did last qtr. Domestic growth rose only about 2% while international jumped about 18%.

Yes we may still be kicking the other guys asses but we are not immune to feeling some growing pains too.

late edit: just like FAVREFAN said above, the competition isnt going anywhere.

Is this for ups? If so take the amount of ground we deliver in a year and plug it into the 2% growth and realize its really not too shabby.

Favr, we keep hearing about dhl, bla bla, how they are taking us down, get real they are doing very poorly over here, so I really dont see your point. You have to understand, our kind of business does have lots of competition, but there are other sectors of the economy where it is flooded with competition. Ups continues to have record profit AND RECORD AMOUNTS OF PACKAGES BEING SHIPPED. If this number was dropping quarter after quarter, yes I would be worried, but that is not true..look it up. Ups wants it all to themselves, there have been issues in the past about this and yes this is good for our jobs, no other company out there brainwashes their people into the "doomsday" effect more than ups does.

 

[Coldworld]

In an attempt to see the glass half full, rural customers shop on the internet more when gas prices rise. Also, business' tend to ship more to business' locally and do away with their own delivery guy when gas prices rise. I see it in my own little corner of the world. Some of my pick-ups ship packages to other business' on my route. They say it is more economical than running their own guy in a van around town and that we capture a signature electronically reducing their paperwork.

good points!

 

[toeknee2gx]

Is this for ups? If so take the amount of ground we deliver in a year and plug it into the 2% growth and realize its really not too shabby.

AND RECORD AMOUNTS OF PACKAGES BEING SHIPPED. If this number was dropping quarter after quarter, yes I would be worried, but that is not true..look it up. Ups wants it all to themselves, there have been issues in the past about this and yes this is good for our jobs, no other company out there brainwashes their people into the "doomsday" effect more than ups does.

So are you saying that our CFO is wrong too????


UPS posts profit warning as growth fades

"Since, we have experienced six weeks of negative volume growth," Kurt Kuehn, UPS's chief financial officer, told investors yesterday. "This trend is obvious across all customer segments and most business sectors."
Volume at UPS's domestic shipping business typically meets or exceeds the pace of growth in US gross domestic product. As a "coincidental indicator" of the economy's health, but not a leading one, the company is not sure how quickly demand may rebound, Mr Kuehn said.
"Our crystal ball isn't any clearer," he said.
UPS may miss its first-quarter profit forecast of 94-98 cents a share. The Atlanta-based group's international-package and supply-chain arms remain on track.

http://www.ft.com/cms/s/0/04b5a316-f09f-11dc-ba7c-0000779fd2ac.html?nclick_check=1


My point is that there is a SHIFT IN GROWTH taking place before our very eyes. 2% domestic growth is basically flat and if you've listened to any of the conference calls on the day of earnings, the talk is more geared toward international growth as opposed to domestic now.

UPS isn't going anywhere IMO. UPS will probably be around another 100 years. My point is right now, we are experiencing growing pains and we are affected by the economy, just like our competitors.

This means fewer jobs being created for your co-workers and friends @ UPS. It means opportunities for promotions and other things may not be happening like they used to. In china and india on the other hand, there will be tons of opportunities. But I don't live in either of those countries so I could care less. I'm worried about my job back at home.

 

[rocket man]

fed x ground 409 a gallon ?

 

[iowa boy]

In the center I work in, our volume is the same or higher than it was last fall before peak started. Our #1 shipper for our center is shipping more boxes of product now than they did last fall. Just this week this shipper has shipped over 750 boxes of post-it style notepads to a major health insurance company through out the US. Another buyer in Italy has had over 250 boxes of product shipped to them via international next day air, (imagine that bill we will send to the shipper and what they charged the buyer in Italy). What I'm trying to say is that the overall volume for the company may be down due to the recession the country is in, but here in the midwest we are not being affected like other parts of the country are right now

 

[Coldworld]

So are you saying that our CFO is wrong too????


UPS posts profit warning as growth fades

http://www.ft.com/cms/s/0/04b5a316-f09f-11dc-ba7c-0000779fd2ac.html?nclick_check=1


My point is that there is a SHIFT IN GROWTH taking place before our very eyes. 2% domestic growth is basically flat and if you've listened to any of the conference calls on the day of earnings, the talk is more geared toward international growth as opposed to domestic now.

UPS isn't going anywhere IMO. UPS will probably be around another 100 years. My point is right now, we are experiencing growing pains and we are affected by the economy, just like our competitors.

This means fewer jobs being created for your co-workers and friends @ UPS. It means opportunities for promotions and other things may not be happening like they used to. In china and india on the other hand, there will be tons of opportunities. But I don't live in either of those countries so I could care less. I'm worried about my job back at home.

Not trying to argue about the economy, I know its starting to flatten out, or has been for awhile. Whenever the econony goes bad, theres still some sectors that seem to keep doing well, and since we service all sifferent areas of the economy we continue to do ok. On the jobs issue, ups continue to hire both part time and drivers for the following reasons...part time turnover, and drivers because of being fired or retirement, yes it would be nice to be able to hire 20, 000 more drivers because we just shut down fedex, but thats not going to happen. And as others say on here, lets try to service our existing customers at a top notch rate before trying to bring more work on. How much do we deliver each year and what part of that is 2%, not sure of the number but thats alot of packages...still.