Can someone explain why this seems to be true??? Has anyone heard of this going on in their areas. Would like to hear also from sales and bd. has ups ever sued over this???
Probably depends on cost structure. If Fedex can do the job for less at a profit, it's not predatory. If UPS udercuts Fedex pricing and does so at a financial loss simply to keep volume away from fedex, that would be predatory.
FDX uses their USPS contract to beat us. There are gateways were UPSCO flies one A300 in while FDX flies an A300 along with a 727 with overflow. The USPS sells the leads and FDX flies the volume using USPS pricing and taxes pay for the extra tab. It is sad to see FDX using upper mangement to beat us but they are able to hire and retain airline and trucking people with customer service and business knowledge. When I jumpseat though MEM I am amazed at how FDX large scale operation seems to make SDF look like a "chinese fire drill". It is not just predatory pricing, it is FDX uppers that are better at running the business.
Had lunch with a business development person in 2000. One of those "where do you see new business" lunches. She said that FDX was giving internet startup companies the computer equipment and favorable rates to ship with them. Something UPS wasn't comfortable doing. Those dozen or so internet companies were gone by 2002.
It has to do with the predatory pricing laws within the US government's Anti-Trust laws. UPS is the largest ground carrier in the US and so we have to be very careful that we do not undercut our competitors and that we cover our costs. However, FedEx is the largest Domestic and International air carrier so we are more aggressive there with our pricing.
There is a lot of negotiations and particulars that goes along getting a shipper to use your services. Getting a volume price is contingent on just what kind of volume you are willing to turn over. There are other ways to get a shipper to get you noticed by offering later pick-ups, faster damage claim resolves,... etc. and sometimes even offering a clerk at your expense to offset them having to use their limited resources to have someone dedicated to processing packages all day. You have to be creative in this tight economy and if you can persuade a company you can save them money they will at least give you a shot at your presentation. And no......I am not is sales, just seems logical.
There's a lot of truth in what you say. FedEx has been very successful at painting itself as an "underdog" and the anti-union, low-balling labor attitude resonates well with big companies who like to think the lean and mean FedEx machine is giving them the better deal.
There have been times where through word of mouth fedex has undercut ups on some accounts by over half...now if ups did this it would get noticed. Although we have always been told that if the company is large enough fedex wont be able to touch ups pricing,,this comes from the folks in bd.
Funny when I was at UPS managers would say something like "FEDEX offers a cheap rate to get customers to switch from us, then 6 months later jack the prices up..." Now I am at FedEx Express, managers say something like "UPS offers cheaper rates to get customers, then jack up the rates" Its the same story on both sides of the fence..
