FedEx Ground Moving Via Express?

TechGrrl

Space Cadet
I haven't been able to confirm this on my own, but it does make some sense. Express aircraft are flying with many voids on them, and if they can fill up those spaces with Ground freight out of the Memphis market, they can cut a day or two on shipping time to the east and west coasts. By moving Ground packages at "Express" speed, FedEx may be trying to steal market share from UPS out of the Memphis market and possibly the entire south east.
...snip...
It would be all part of the charade of FedEx claiming Express and Ground are two separate operating companies, but are cooperating with each other at every opportunity.

Just a dumb ex-UPSer here, but how does this strategy steal market share from UPS? Don't you think UPS (which really IS integrated) doesn't use this same strategy as well? Also, it only works if you have empty space on the premium transport mode. Once the economy starts to recover, it become insane to fill that space with 'cheap' stuff instead of 'premium' stuff. At that point, you dump that volume back into your slower ground system, and all those customers who got used to caviar service at McDonald's prices get seriously annoyed....
 

Ricochet1a

Well-Known Member
Just a dumb ex-UPSer here, but how does this strategy steal market share from UPS? Don't you think UPS (which really IS integrated) doesn't use this same strategy as well? Also, it only works if you have empty space on the premium transport mode. Once the economy starts to recover, it become insane to fill that space with 'cheap' stuff instead of 'premium' stuff. At that point, you dump that volume back into your slower ground system, and all those customers who got used to caviar service at McDonald's prices get seriously annoyed....

In the short term, you can give them "Express" times with "Ground" prices. Think of it as a form of advertising. Like all "teaser" promotions, either the price will eventually go up, or the customer will get less for their dollar.

When the economy starts to recover, these customers are already shipping with Ground. They can switch to UPS, but if the costs and delivery times are comparable, why bother? My ISP did the same thing to me. Low teaser rate for a year then jacked up the price. The cost difference between what I'm getting an the competing provider isn't enough for me to bother with switching. So the teaser rate worked.

If a company can grab market share with no real cost for doing so, they'll do it every time. Maintaining market share is a battle, but when the competitors are so closely matched, most customers will choose to stay with the service they have. The real issue is whether Ground can provide the minimum level of service with its low prices to keep customers when the economy improves. UPS is hopeing that the customers will come back. FedEx is betting that customers want low rates more than a higher service level.

There is a side problem for FedEx though in this strategy. They are using the same brand name (FedEx) to apply to two completely different services. One a high expense high service overnight option and the other a basement price low service get it there in a few days option. A very schizophrenic business model. The FedEx brand should've never been applied to the Ground business.
 

unionman

Well-Known Member
In the short term, you can give them "Express" times with "Ground" prices. Think of it as a form of advertising. Like all "teaser" promotions, either the price will eventually go up, or the customer will get less for their dollar.

When the economy starts to recover, these customers are already shipping with Ground. They can switch to UPS, but if the costs and delivery times are comparable, why bother? My ISP did the same thing to me. Low teaser rate for a year then jacked up the price. The cost difference between what I'm getting an the competing provider isn't enough for me to bother with switching. So the teaser rate worked.

If a company can grab market share with no real cost for doing so, they'll do it every time. Maintaining market share is a battle, but when the competitors are so closely matched, most customers will choose to stay with the service they have. The real issue is whether Ground can provide the minimum level of service with its low prices to keep customers when the economy improves. UPS is hopeing that the customers will come back. FedEx is betting that customers want low rates more than a higher service level.

There is a side problem for FedEx though in this strategy. They are using the same brand name (FedEx) to apply to two completely different services. One a high expense high service overnight option and the other a basement price low service get it there in a few days option. A very schizophrenic business model. The FedEx brand should've never been applied to the Ground business.

UPS has been doing just the opposite. they put there next day air packages on trucks. They have been doing this ever since they started consolidating there flights. I have heard, but I can't prove that they have been leaving packages behind at gateways because they are cutting to many flights.
 

TechGrrl

Space Cadet
In the short term, you can give them "Express" times with "Ground" prices. Think of it as a form of advertising. Like all "teaser" promotions, either the price will eventually go up, or the customer will get less for their dollar.

If a company can grab market share with no real cost for doing so, they'll do it every time. Maintaining market share is a battle, but when the competitors are so closely matched, most customers will choose to stay with the service they have. The real issue is whether Ground can provide the minimum level of service with its low prices to keep customers when the economy improves. UPS is hopeing that the customers will come back. FedEx is betting that customers want low rates more than a higher service level.

There is a side problem for FedEx though in this strategy. They are using the same brand name (FedEx) to apply to two completely different services. One a high expense high service overnight option and the other a basement price low service get it there in a few days option. A very schizophrenic business model. The FedEx brand should've never been applied to the Ground business.

You make a lot of sense, particularly with regard to the branding dilution. I think in the long run that is a much bigger problem. However, I still think it is unlikely that FedEx can steal much volume in this fashion, since UPS has the exact same avenue available to it. I suspect about 80% of the customers have BOTH companies, so it is just a matter of moving the pile from one dock to the other.
 

bbsam

Moderator
Staff member
In the short term, you can give them "Express" times with "Ground" prices. Think of it as a form of advertising. Like all "teaser" promotions, either the price will eventually go up, or the customer will get less for their dollar.

When the economy starts to recover, these customers are already shipping with Ground. They can switch to UPS, but if the costs and delivery times are comparable, why bother? My ISP did the same thing to me. Low teaser rate for a year then jacked up the price. The cost difference between what I'm getting an the competing provider isn't enough for me to bother with switching. So the teaser rate worked.

If a company can grab market share with no real cost for doing so, they'll do it every time. Maintaining market share is a battle, but when the competitors are so closely matched, most customers will choose to stay with the service they have. The real issue is whether Ground can provide the minimum level of service with its low prices to keep customers when the economy improves. UPS is hopeing that the customers will come back. FedEx is betting that customers want low rates more than a higher service level.

There is a side problem for FedEx though in this strategy. They are using the same brand name (FedEx) to apply to two completely different services. One a high expense high service overnight option and the other a basement price low service get it there in a few days option. A very schizophrenic business model. The FedEx brand should've never been applied to the Ground business.
Ok, Ricochet. I know you are not impressed with service from ground. I realize that you and MrFedex and others around here (myself included) can tell all kinds of horror stories about certain ground drivers. Should you ever want to take a ride on the wild side and see the real story, I could probably arrange it. These are not DHL routes. And one of the reasons customers use ground is not the "we don't care when it gets there". The fact of the matter is that in alot of instances next day service can be had through ground. You seem to be very good with numbers, but it seems that information you could get about on time percentages for ground is not something you are interested in. So for all the stories about how "this package was lost by ground for eight days", I can probably find more interesting ones. Like how a certain gun manufacturer in the midwest switched to ground because certain packages (hand guns) kept coming up missing from Chicago hubs. How do I know that? Customer told me so. Think FedEx is going to lose that shipper (300-1000ppd) back to UPS? Probably not.
 

MrFedEx

Engorged Member
Ok, Ricochet. I know you are not impressed with service from ground. I realize that you and MrFedex and others around here (myself included) can tell all kinds of horror stories about certain ground drivers. Should you ever want to take a ride on the wild side and see the real story, I could probably arrange it. These are not DHL routes. And one of the reasons customers use ground is not the "we don't care when it gets there". The fact of the matter is that in alot of instances next day service can be had through ground. You seem to be very good with numbers, but it seems that information you could get about on time percentages for ground is not something you are interested in. So for all the stories about how "this package was lost by ground for eight days", I can probably find more interesting ones. Like how a certain gun manufacturer in the midwest switched to ground because certain packages (hand guns) kept coming up missing from Chicago hubs. How do I know that? Customer told me so. Think FedEx is going to lose that shipper (300-1000ppd) back to UPS? Probably not.


A lot of stuff "disappears" from our hubs too.
 

Ricochet1a

Well-Known Member
Dont you mean station?Are you now even trying to sound like a UPS employee calling your workplace a Hub.


Pathetic!


Try this...

Talk to a CSA who has been around for a few years. They'll tell you that when customers come in to complain about a package that didn't get delivered, a trace is placed upon it. 80-90% of the time the package "disappears" in either the hub or ramps. More often than not it is a missort, but sometimes things do vanish out of AGFS.

Having participated in investigations of lost packages, I can state there are some rather slow witted handlers that think they can make out with an IPod or Blackberry and not get caught. They make it out if all they steal is one, but more often than not they keep up with the pilfering. They don't understand that packages are tracked with every movement and to the employee in most circumstances. If the trail repeatedly ends with packages showing up missing when they should've been in a certain handlers cargo container, it takes just a day or two to get the evidence on that handler and out the door they go.
 

Ricochet1a

Well-Known Member
Ok, Ricochet. I know you are not impressed with service from ground. I realize that you and MrFedex and others around here (myself included) can tell all kinds of horror stories about certain ground drivers. Should you ever want to take a ride on the wild side and see the real story, I could probably arrange it. These are not DHL routes. And one of the reasons customers use ground is not the "we don't care when it gets there". The fact of the matter is that in alot of instances next day service can be had through ground. You seem to be very good with numbers, but it seems that information you could get about on time percentages for ground is not something you are interested in. So for all the stories about how "this package was lost by ground for eight days", I can probably find more interesting ones. Like how a certain gun manufacturer in the midwest switched to ground because certain packages (hand guns) kept coming up missing from Chicago hubs. How do I know that? Customer told me so. Think FedEx is going to lose that shipper (300-1000ppd) back to UPS? Probably not.

I'm very much aware of the expansion of the areas which Ground can provide next day service. Believe me, I've seen Express business lost to this.

I'm speaking from experience from my customers that constantly have problems with getting service out of Ground that they take for granted out of Express. They like the prices, but the service is horrible. It isn't the drivers, it is the SYSTEM. Yes, the drivers tend to be "colorful". The problem is getting the level of service that they have associated with "FedEx" out of Ground - can't do it. Customers are learning that FedEx isn't necessarily FedEx. I'm not trying to slam Ground drivers, I'm slamming a decision by Fred to apply the FedEx brand to everything he wants to own and expect the customers to not realize the differences.

Up until about a year ago, Express Couriers more or less "ran cover" for Ground, taking up the slack in service. Customers would include Ground packages in their daily pickups and Express Couriers would scoop them up and take them back into the Express stations with them. This isn't happening much anymore. With the hit to the economy, customers began switching to Ground to save on their shipping costs, BUT expected the same level of service they received with Express - didn't happen. They began coming back and using Express Saver to save and get service.

I have nothing against Ground drivers. I wish they had an opportunity to organize to achieve a better compensation package. Even those who sport more tattoos than natural teeth and choose to have colored Mohawks deserve to make a decent and respectible living. Dental work isn't cheap after all. No hard feelings to the Ground drivers....:wink2:
 

bbsam

Moderator
Staff member
I'm very much aware of the expansion of the areas which Ground can provide next day service. Believe me, I've seen Express business lost to this.

I'm speaking from experience from my customers that constantly have problems with getting service out of Ground that they take for granted out of Express. They like the prices, but the service is horrible. It isn't the drivers, it is the SYSTEM. Yes, the drivers tend to be "colorful". The problem is getting the level of service that they have associated with "FedEx" out of Ground - can't do it. Customers are learning that FedEx isn't necessarily FedEx. I'm not trying to slam Ground drivers, I'm slamming a decision by Fred to apply the FedEx brand to everything he wants to own and expect the customers to not realize the differences.

Up until about a year ago, Express Couriers more or less "ran cover" for Ground, taking up the slack in service. Customers would include Ground packages in their daily pickups and Express Couriers would scoop them up and take them back into the Express stations with them. This isn't happening much anymore. With the hit to the economy, customers began switching to Ground to save on their shipping costs, BUT expected the same level of service they received with Express - didn't happen. They began coming back and using Express Saver to save and get service.

I have nothing against Ground drivers. I wish they had an opportunity to organize to achieve a better compensation package. Even those who sport more tattoos than natural teeth and choose to have colored Mohawks deserve to make a decent and respectible living. Dental work isn't cheap after all. No hard feelings to the Ground drivers....:wink2:
But Ricochet, be true to your reputation. Put the numbers up. Let's see whtat the customers are complaining about. You know Fedex is all about those numbers. Or...maybe the numbers won't support your claims?:surprised::happy2:
 

MrFedEx

Engorged Member
Try this...

Talk to a CSA who has been around for a few years. They'll tell you that when customers come in to complain about a package that didn't get delivered, a trace is placed upon it. 80-90% of the time the package "disappears" in either the hub or ramps. More often than not it is a missort, but sometimes things do vanish out of AGFS.

Having participated in investigations of lost packages, I can state there are some rather slow witted handlers that think they can make out with an IPod or Blackberry and not get caught. They make it out if all they steal is one, but more often than not they keep up with the pilfering. They don't understand that packages are tracked with every movement and to the employee in most circumstances. If the trail repeatedly ends with packages showing up missing when they should've been in a certain handlers cargo container, it takes just a day or two to get the evidence on that handler and out the door they go.


IPods, jewelry, laptops, expensive clothing, and on and on. FedEx will often take months building an iron-clad case against an employee by proving multiple thefts or by trying to nab others who might have created a theft ring. Over the years I've seen CTV drivers canned for meeting accomplices on the road to hand over pkgs, couriers fired for stealing huge diamonds and/or jewelry, and handlers escorted off the premises with something stuffed down their pants. Drugs and cash are also popular to steal. Some couriers will slit open a residential pkg to see if there is pot, coke, hash etc inside and then take it because they know the recipient isn't going to file a claim. It's happened a lot and still happens.
 

MrFedEx

Engorged Member
But Ricochet, be true to your reputation. Put the numbers up. Let's see whtat the customers are complaining about. You know Fedex is all about those numbers. Or...maybe the numbers won't support your claims?:surprised::happy2:

Come on. Nobody needs to post any numbers. My customers complain all the time about Ground but they keep using it because it's inexpensive. You get what you pay for.

Whenever I see an old ex-RPS Ground Walk-In wobbling down the road with someone who looks like they just were released from prison driving, that's what the customer sees too. Every once in awhile I'll see a Ground driver who looks professional, has a well-maintained truck, and really cares about what he does. But that's the exception.

During a typical week I'll be approached by at least several customers asking one of the following questions;

1. "Can you pick-up my pkgs? I haven't seen the Ground guy in 2 days".

2. "This isn't my pkg. It's addressed to another business/residence".

3. "FedEx doesn't care how they handle pkgs. Just look at this (Ground) pkg!" (box is now round instead of square or rectangular")

4. " I'm going to stop using FedEx if I don't get better service". (When I try to explain that Ground and Express are separate entities, I get a look of bewilderment).

Want more?
 

Ricochet1a

Well-Known Member
But Ricochet, be true to your reputation. Put the numbers up. Let's see whtat the customers are complaining about. You know Fedex is all about those numbers. Or...maybe the numbers won't support your claims?:surprised::happy2:

If there was a database that I could access, I would. For the pension stuff, it took me about 10 minutes on Excel to get a model created and another few minutes to check the TVM calculations.

The information that would be needed to compare customer complaints is VERY closely held by FedEx. On the Express side, this information is used to calculate the SQI numbers. The SQI is never defined to line employees, just the final percentage over or under the target is posted. In the day, our "bonus" was dependent on making a certain percentage over the SQI along with corporate profitability. Now, that is obviously gone and we're moving in the opposite direction as far as compensation.

If you have a link to a web source which has the type of information used to calculate SQI, I'll take a stab at comparing numbers and seeing if there is any causal link or no statistical association indicated. As I said, this type of information isn't released to the public, so I don't think any sort of quantative analysis can be performed regarding customer satisfaction. That leaves us with what can only be described as anecdotal accounts.
 

bbsam

Moderator
Staff member
Come on. Nobody needs to post any numbers. My customers complain all the time about Ground but they keep using it because it's inexpensive. You get what you pay for.

Whenever I see an old ex-RPS Ground Walk-In wobbling down the road with someone who looks like they just were released from prison driving, that's what the customer sees too. Every once in awhile I'll see a Ground driver who looks professional, has a well-maintained truck, and really cares about what he does. But that's the exception.

During a typical week I'll be approached by at least several customers asking one of the following questions;

1. "Can you pick-up my pkgs? I haven't seen the Ground guy in 2 days".

2. "This isn't my pkg. It's addressed to another business/residence".

3. "FedEx doesn't care how they handle pkgs. Just look at this (Ground) pkg!" (box is now round instead of square or rectangular")

4. " I'm going to stop using FedEx if I don't get better service". (When I try to explain that Ground and Express are separate entities, I get a look of bewilderment).

Want more?
No. I don't want more. I want numbers. I want them posted so that we can quantify the data. I have already stipulated to the fact that Ground has it's share of problems. But every statement you have posted I have heard applied to Ups. Again, annectdotal evidence is considered the weakest. This is an opportunity to strengthen your assertion that Grounds service lags far behind the competition.

So aren't you just a little curious what the empirical evidence would reveal? Or is your personal experience so vast that no evidence contrary to your own personal persuasion need be considered?
 

MrFedEx

Engorged Member
No. I don't want more. I want numbers. I want them posted so that we can quantify the data. I have already stipulated to the fact that Ground has it's share of problems. But every statement you have posted I have heard applied to Ups. Again, annectdotal evidence is considered the weakest. This is an opportunity to strengthen your assertion that Grounds service lags far behind the competition.

So aren't you just a little curious what the empirical evidence would reveal? Or is your personal experience so vast that no evidence contrary to your own personal persuasion need be considered?

Here's my (anecdotal) evidence. Whenever I see a UPS driver he/she is;

1. Neatly and properly uniformed.

2. Moving at a brisk professional pace using proper methods.

3. Driving an immaculately clean truck with no dents, large scratches or a loose bumper about to fall in the street.

4. Minus tattoos, beards,long dirty hair, piercings, cigarette or an attitude.

5. Operating their vehicle in a professional manner, using flashers at residential stops, honking the horn before backing and not aimlessly driving around a neighborhood looking for an address. In other words, they know exactly where they are going and what they are doing. I've rarely seen a UPS driver operate their vehicle in an unsafe manner.

I don't have any numbers, but I know a professional when I see one.
 

MrFedEx

Engorged Member
No. I don't want more. I want numbers. I want them posted so that we can quantify the data. I have already stipulated to the fact that Ground has it's share of problems. But every statement you have posted I have heard applied to Ups. Again, annectdotal evidence is considered the weakest. This is an opportunity to strengthen your assertion that Grounds service lags far behind the competition.

So aren't you just a little curious what the empirical evidence would reveal? Or is your personal experience so vast that no evidence contrary to your own personal persuasion need be considered?

I can't edit my posts so I'll add the comment that I seldom hear customers complaining about either UPS service or drivers. Occasionally they'll get a damaged or late pkg, but most shippers like their service. They especially like the fact that they don't have to deal with multiple versions of UPS every day. Again, it's anecdotal because I don't have access to the numbers. They also like the fact that they almost always have the same driver, one who knows the nuances of their particular situation(s). In the revolving door that is FedEx Ground, a shipper will probably see many new faces during the year.

FedEx is especially aware that customers are confused and angered by the lack of cohesiveness between the different operating companies. And they're right....why is it their problem to make the distinction?
 

UnconTROLLed

perfection
FedEx express delivered a FedEx ground package of mine. What happened was, the ground driver took the pkg to the wrong place ( UPS) according to tracking . I called FedEx and sure enough, no more than 3 hours later, the Express driver brought it to me. This was around 2years ago.

Now it all makes sense ;)
 

Ricochet1a

Well-Known Member
FedEx express delivered a FedEx ground package of mine. What happened was, the ground driver took the pkg to the wrong place ( UPS) according to tracking . I called FedEx and sure enough, no more than 3 hours later, the Express driver brought it to me. This was around 2years ago.

Now it all makes sense ;)

This actually happens quite a lot. Express dispatchers attempt to solve problems created by Ground - like the one you mentioned - by having Express Couriers retreive misdelivered packages and deliver them to the correct location. Problem is, this is all "off the record". We can't scan the item to indicate it is in our possession, we can't perform a proof of delivery scan (POD), we just do it as a "favor".

I don't do this any more. If I get a request to pick up a Ground package I refuse. What are they going to do to me???? They can't even issue an OLCC for refusing to touch a Ground package; if they try, I've got my 6 figure separation bonus from FedEx waiting - after a year or so of litigation.

This has been an increasing problem for Express Couriers. Ground drivers don't have instant communication with a FedEx dispatcher to solve problems, so Express Couriers are used to solve problems created by misdelivery of Ground packages. I won't do it any longer.

The same problem occurs when customers place an oncall pickup request for Ground packages and the request comes through as an Express pickup. We arrive (Express Couriers) and the customers expect us to take the package. I don't touch them anymore. I indicate "no package", "Ground package" on my handheld and close out the stop. I've had repeated requests to pick up Ground packages from the same location and I walk away with no package - and the customer gets a little ticked off.

I do sympathize with them, but I'm not going to cover for the inability of FedEx to properly manage Ground operations. If FedEx wants to provide service for Ground packages while simultaneously playing the IC game, they can solve the problems without skirting the letter of the law which they use to separate Express from Ground.
 

DOWNTRODDEN IN TEXAS

Well-Known Member
Then there's the times that you get there and the customer says "the other FredEx guy just left with it..." Dispatch, bless their little hearts (southern terminology for idiots..) just don't get it, but then they usually get that call from the call center.
 
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