FedEx stock is crashing and burning. What do you think the future will be?

[It will be fine]

Do you think there’s a point where X decides that THEY have the cost metrics wrong? Because they are wrong.

That point will be after massive failures, not before. We can see that their assumptions are wrong but they won’t believe it until contractors walk away and the freight goes undelivered. I had to deal with a horrendous contract when I first overlapped. It was well before the mandate and they assumed a crazy level of efficiency gains that weren’t possible in reality. The contracts have gotten better since then. I expect the same to happen over the next few years. Lowball contracts that produce massive failures and poor service followed by slow adjustments up to reasonable compensation.

 

[Route 66]

Well fortunately the consumer base is a very understanding group and will patiently stand by til FedEx removes its head from its ass and gets their house in order.

No worries at all​

 

[It will be fine]

Well fortunately the consumer base is a very understanding group and will patiently stand by til FedEx removes its head from its ass and gets their house in order.

No worries at all​

View attachment 277543

Luckily we operate in a duopoly. Shippers only have 2 realistic choices. The media complaints are all recipients that “paid” for the free shipping option for their purchases. They don’t really matter.

 

[bbsam]

He's counting on a bunch of contractors quitting abruptly. If they do it will probably be to their inability to get people to work for nothing. I wonder what makes him think that he can get people to work for nothing? ......Or keep the Teamsters out if he continues to grow in size and therefore becomes a bigger target.

If the Teamsters can’t organize Freight, why would they bother with IWBF inc.?

 

[bbsam]

That point will be after massive failures, not before. We can see that their assumptions are wrong but they won’t believe it until contractors walk away and the freight goes undelivered. I had to deal with a horrendous contract when I first overlapped. It was well before the mandate and they assumed a crazy level of efficiency gains that weren’t possible in reality. The contracts have gotten better since then. I expect the same to happen over the next few years. Lowball contracts that produce massive failures and poor service followed by slow adjustments up to reasonable compensation.

They always fail to learn the same lesson over and over again.

 

[bbsam]

That point will be after massive failures, not before. We can see that their assumptions are wrong but they won’t believe it until contractors walk away and the freight goes undelivered. I had to deal with a horrendous contract when I first overlapped. It was well before the mandate and they assumed a crazy level of efficiency gains that weren’t possible in reality. The contracts have gotten better since then. I expect the same to happen over the next few years. Lowball contracts that produce massive failures and poor service followed by slow adjustments up to reasonable compensation.

I believe 2020 may very well be that year. E-commerce, Smartpost, and a hub system that got overwhelmed this year is not a reassuring for 2020 peak. I do hope I’m missing something.

 

[newgirl]

I think a lot of contractors are going to bail with e-commerce rates. People will lose too much money and walk away. There’s a lot of open CSAs now and I expect there to be many more next year.

e commerce pays less per pkg? How is that even a thing?

This is a quote from Raj from that earnings call:

However, recognizing that e-commerce is the fastest growing segment in our business, we are working to position FedEx Ground as the B2C player. We've spend years enhancing our network and today, our FedEx Ground network is well equipped for handling this rapidly growing market including seven-day operations for the majority of the US and the dedicated large package operations for handling the growth in heavy and bulky items moving through the ground network.

The disconnect is mind boggling.

 

[bbsam]

e commerce pays less per pkg? How is that even a thing?

This is a quote from Raj from that earnings call:

However, recognizing that e-commerce is the fastest growing segment in our business, we are working to position FedEx Ground as the B2C player. We've spend years enhancing our network and today, our FedEx Ground network is well equipped for handling this rapidly growing market including seven-day operations for the majority of the US and the dedicated large package operations for handling the growth in heavy and bulky items moving through the ground network.

The disconnect is mind boggling.

Yes. The disconnect is crazy. But it’s to be expected when the focus is on Wall Street.

 

[newgirl]

How many contractors are out there for ground? Has the amount of investor groups grown? How many are hands on like you and IWBF? (I assume you both are hands on, sorry if that's wrong)

 

[Jkloc420]

fedex is like kmart

 

[bbsam]

How many contractors are out there for ground? Has the amount of investor groups grown? How many are hands on like you and IWBF? (I assume you both are hands on, sorry if that's wrong)

I think most are probably hands on. But the investor model that I think X once thought they wanted brings it’s own challenges. They have more negotiating power and can be harder to terminate agreements with due to their size.

 

[bacha29]

e commerce pays less per pkg? How is that even a thing?

This is a quote from Raj from that earnings call:

However, recognizing that e-commerce is the fastest growing segment in our business, we are working to position FedEx Ground as the B2C player. We've spend years enhancing our network and today, our FedEx Ground network is well equipped for handling this rapidly growing market including seven-day operations for the majority of the US and the dedicated large package operations for handling the growth in heavy and bulky items moving through the ground network.

The disconnect is mind boggling.

From the individual contractor's perspective it all comes down to how much high production low cost labor is available in his market and how much of it he acquire. If he can't get enough of it to meet his needs that's not a FXG problem and they're not going to solve it for you.

 

[59 Dano]

From the individual contractor's perspective it all comes down to how much high production low cost labor is available in his market and how much of it he acquire.

Newgirl, this is his answer to everything. How to make a profit? "You have to get that cheap labor that is in short supply."

How do you structure your business? "Depends. That cheap labor that's easy to exploit is going to run out."

What color seat cushions for the trucks? "Well you may not know this but that UPS labor that you expect to get from your employees making Big Lots wages is in short supply."

He's like a little kid who learned a new word.

 

[bacha29]

Newgirl, this is his answer to everything. How to make a profit? "You have to get that cheap labor that is in short supply."

How do you structure your business? "Depends. That cheap labor that's easy to exploit is going to run out."

What color seat cushions for the trucks? "Well you may not know this but that UPS labor that you expect to get from your employees making Big Lots wages is in short supply."

He's like a little kid who learned a new word.

Wrong I'm just trying to get you out of your Mom's basement out of your sheltered little world and hopefully get you where you need to be in terms of human development.

 

[Serf]

https://seekingalpha.com/article/4314390-fedex-nightmare

 

[Serf]

https://seekingalpha.com/article/4314390-fedex-nightmare

"To be fair, Amazon is a better-run company than FedEx, who has stuck their chin out with an offering that, from a consumer standpoint, feels 1995. In addition, Fred S spent a great deal of time lobbying the President to lower corporate taxes so he could free up capital to buy back shares, instead of fighting Amazon."

 

[Serf]

https://seekingalpha.com/article/4314390-fedex-nightmare

"In 24 months Fedex will not exist in its current form."

 

[bbsam]

https://seekingalpha.com/article/4314390-fedex-nightmare

Complete BS

That will happen in 6 months, not 24 months .

 

[bbsam]

I do think that Amazon’s delivery model and treatment of drivers will go too far and be obliterated in the courts far more quickly that anything X experienced with Ground.

 

[IVE GOTTA PACKAGE 4U]

Complete BS

That will happen in 6 months, not 24 months .

I was reading an article about the top 10 shareholders of FedEx. 6 of them are mutual fund companies. How long do you think they are going to put up with the poor performance before they start dumping the stock?