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FEDEX losing Amazon business NOW?
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<blockquote data-quote="dmac1" data-source="post: 4003912" data-attributes="member: 60252"><p>If 'almost half' goes to wages, then MOST goes to fixed costs. A tiny % goes to the actual route driver who gets the package to Amazon's customer</p><p></p><p>And since ground is more profitable, a smaller % goes to the driver, and most of packages Amazon tenders to fedex is sent by ground, and wages/benefits paid to ground are lower than express, the drop in profits is even greater than if it would be if you use 'average' wages' across the corporation.</p><p></p><p>And out of all the wages paid by express to sorters, supervisors, pilots, loaders, maintenance, cutting courier hours is only a tiny % of revenue. Fedex is not going to recover a 2% drop in total revenue by cutting just courier hours by 2%, even if a 2% drop in total package count correlated directly to a 2% drop in hours needed to deliver packages. A 2% drop in package count MIGHT save 1% of the total time a driver spends during a day. Going from 150 stops a day down to 147 might save a few minutes in a delivery driver's day, but saves nothing for the driver who drove the trailer to the terminal, or the sorters, or the terminal manager, or pilot, and so on. And simple math, for you Dano, dictates that since MOST costs are fixed and not directly related to volume, MOST of the 2% decline in revenue MUST come from profit. A 2% drop in total revenue does NOT equal a 2% decline in profit.</p></blockquote><p></p>
[QUOTE="dmac1, post: 4003912, member: 60252"] If 'almost half' goes to wages, then MOST goes to fixed costs. A tiny % goes to the actual route driver who gets the package to Amazon's customer And since ground is more profitable, a smaller % goes to the driver, and most of packages Amazon tenders to fedex is sent by ground, and wages/benefits paid to ground are lower than express, the drop in profits is even greater than if it would be if you use 'average' wages' across the corporation. And out of all the wages paid by express to sorters, supervisors, pilots, loaders, maintenance, cutting courier hours is only a tiny % of revenue. Fedex is not going to recover a 2% drop in total revenue by cutting just courier hours by 2%, even if a 2% drop in total package count correlated directly to a 2% drop in hours needed to deliver packages. A 2% drop in package count MIGHT save 1% of the total time a driver spends during a day. Going from 150 stops a day down to 147 might save a few minutes in a delivery driver's day, but saves nothing for the driver who drove the trailer to the terminal, or the sorters, or the terminal manager, or pilot, and so on. And simple math, for you Dano, dictates that since MOST costs are fixed and not directly related to volume, MOST of the 2% decline in revenue MUST come from profit. A 2% drop in total revenue does NOT equal a 2% decline in profit. [/QUOTE]
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