Oldfart
Well-Known Member
Laughing at? Yep. Listening? Not hardly.
FedEx vs UPS Profit margins
- Thread starter fedx
- Start date
Fred's Myth
Nonhyphenated American
SmithBarney
Well-Known Member
UPS sustains a better profit margin due to stop density, they Run 1 TRUCK(Delivers AIR/GROUND) FDX Runs 3(Express/Ground/home delivery)
There isn't a single Express route that runs the density of a UPS route
Real world scenario, a few years outdated, but still close:
At UPS 3 Routes(one loop) Downtown/ruralish/mountain is close to 300stops(180/70/50)
At Fedex in the same whole area(express runs 55 stops one truck)(Ground 120ish just businesses)(HD 40-50 just resi)
There isn't a single Express route that runs the density of a UPS route
Real world scenario, a few years outdated, but still close:
At UPS 3 Routes(one loop) Downtown/ruralish/mountain is close to 300stops(180/70/50)
At Fedex in the same whole area(express runs 55 stops one truck)(Ground 120ish just businesses)(HD 40-50 just resi)
fedx
Extra Large Package
I guess I'm just thinking since Ground is doing so well for FedEx and the fact that they aren't even company employees, I'd think FedEx would be making huge money compared to UPS who pay a lot of drivers $35-$40/hr. Here you have UPS that pays their drivers anywhere from 50% to 100% more than FedEx and yet they (UPS) is still more profitable.
SmithBarney
Well-Known Member
Ground is very profitable, because of low overhead
Express just has a high operating cost that keeps overall profitability down.
UPS is profitable because well their system is overall much more (Productive)efficient than FedEx as a whole.
I've been located in several US Express locations, and as a whole they are very unproductive after P1 compared to UPS. They underutilize most routes. about 25% of routes should be off road after P1, while others should be maximized on P2 product. But Express cannot pull that off since they can't seem to keep Part time employees, and when peak comes around they really need the extra bodies on the road.
Operational needs
Virescit Vulnere Virtus
Something that helps UPS be more profitable is that they lay off drivers when there is no work. FedEx pays minimums.
Oldfart
Well-Known Member
How can that be? To listen to many, Fedex treats its employees horrible while UPS is a much better place to work.
Operational needs
Virescit Vulnere Virtus
Okay, Earl.
Oldfart
Well-Known Member
Who says and thinks that way? That's right, it's operational.
59 Dano
I just want to make friends!
The margin on ground packages is ridiculous vs the margin on air packages. Air packages comprise less than 20% of UPS' freight, but nearly half of FedEx freight. Most people have no idea of the staggering overhead that an air operation has.
Oldfart
Well-Known Member
Anyone who works at Express and takes the time to read or listen to the financials that are relayed to us knows the cost of an air operation. I imagine the question was posted by someone who just started working at Express or doesn't even work there. It wasn't that long ago Express was working with 5% margins and with a few years of improvements, margins are very close to what Ground is achieving.
59 Dano
I just want to make friends!
Express margin is half that of Ground.
Oldfart
Well-Known Member
Up 50% from just a few years ago and moving in the right direction.
59 Dano
I just want to make friends!
That's fine, but they are nowhere near "very close to what Ground is achieving" and probably never will be.
zeev
Well-Known Member
your right 14.2% grand 7.1% express, most of the express margin is in express freight also known as heavyweight.
Oldfart
Well-Known Member
A few years ago, Express was less than 5 and Ground was over 15. The more money they have thrown at Ground has brought their % down and Express has had the opposite result. Fleet upgrades, more technology and other improvements will have a positive result at Express. I expect Express to keep going up while Ground's expansion will hinder their numbers. Maybe bacha can give his opinion. He is a financial genius and would know.
59 Dano
I just want to make friends!
There's no reason for Ground not to have a significantly higher margin than Express. It should be higher. Express would be lucky to hit 10% for a year and it would take something drastic for them to be able to maintain 10% consistently.
zeev
Well-Known Member
Ground is the future, if you go into the sort facilities all the investment is ground X owns the buildings and they are automated. Express is in leased buildings with old technology
