Fred sells big.

[floridays]

What does it say about a company that's now competing against itself? Like a cat playing with a pair of cornered mice. Let's face it. What you now have is a rate war between Express and Ground with contractors caught in the middle.

Finally a lucid comment from you. Ground was built by express, express employees paid that price for years.
Express is now poaching lower margin packages they built a ground empire around to gain higher margins on.
I smell a shell game scam. I don't know much about ground, do you guys offer guaranteed commit times, backed by refund?
Help me on this, I'm trying to learn something.

 

[MAKAVELI]

It's a good idea. That way one company can't pull the plug and ruin us. Discount ourselves to 100 people and then jack the rates up slowly. When 20% leave, that still leaves 80 companies shipping with us because changing is "too hard".

That's a cart before the horse mentality. They could have done something like this a long time ago but now it just reeks of desperation.

 

[floridays]

One company can't ruin us anyway, but it's a better idea to build volume. For example, Amazon was on company that shipped a ton of packages at a huge discount. This is recoup that volume with multiple smaller companies who don't warrant such a deep discount. And to your point, it would reduce the volatility that one shipper could create.

With that said, are we becoming a volume discounter like K-Mart initiated and Wal-Mart perfected?

I can assume Express raises won't be pegged by increase in margin, is volume going to be the new metric?

Is the former a correct assumption?

 

[Star B]

That's a cart before the horse mentality. They could have done something like this a long time ago but now it just reeks of desperation.

I wouldn't go that far, yet. I can see where you are thinking it, but here's what I'm thinking. Now, we have WAG and DG for dropoff locations. Now would be the perfect time to strike with a price decrease to basically match USPS for convenience in dropoff. I mean, drop it off at any DG/WAG/FXO/WalmartFXO/Station/Dbox/RPnS versus the past of Station/Dbox/FXO/Random Pack and Ship

 

[MAKAVELI]

I wouldn't go that far, yet. I can see where you are thinking it, but here's what I'm thinking. Now, we have WAG and DG for dropoff locations. Now would be the perfect time to strike with a price decrease to basically match USPS for convenience in dropoff. I mean, drop it off at any DG/WAG/FXO/WalmartFXO/Station/Dbox/RPnS versus the past of Station/Dbox/FXO/Random Pack and Ship

I just don't see dropping prices for a service that is not very profitable in the first place, while dropping a big shipper because the freight wasn't very profitable, a smart decision. Poaching freight from Ground which is more profitable than Express doesn't make much sense either. It just seems they are throwing on the wall, seeing what sticks.

 

[SmithBarney]

So they get rid of the biggest discounted shipper only to discount other shippers. Lol

Well you can lose Half of 1000 Shippers and still have packages,
You can't however lose half of 1 Shipper.
It's a fairly smart move. Amazon Volume was starting to affect operations, why do you think we had late flights all the time, running near peak volume most of the year was starting to stress the system daily.

 

[MAKAVELI]

Well you can lose Half of 1000 Shippers and still have packages,
You can't however lose half of 1 Shipper.
It's a fairly smart move. Amazon Volume was starting to affect operations, why do you think we had late flights all the time, running near peak volume most of the year was starting to stress the system daily.

Smart? They are now poaching freight from ground to fill the planes. LMAO!

 

[BoxDriver]

Smart? They are now poaching freight from ground to fill the planes. LMAO!

Take all the swing sets and trampolines you want.

 

[MAKAVELI]

Take all the swing sets and trampolines you want.

What exactly do you think we'll be getting from ground? Envelopes? I haven't seen an Amazon package in a long time so not having their freight doesn't really affect me. But the decision to drop them most likely will when it comes to raise time. That's what I'm worried about. All I'm saying is the upper brass right now doesn't seem to know what the friend* they're doing.

 

[59 Dano]

With that said, are we becoming a volume discounter like K-Mart initiated and Wal-Mart perfected?

I can assume Express raises won't be pegged by increase in margin, is volume going to be the new metric?

Is the former a correct assumption?

No.

 

[59 Dano]

So they get rid of the biggest discounted shipper only to discount other shippers. Lol

They get rid of a shipper that sends 100,000 packages a day at a discount of 30%. They gain several shippers that send a total of 100,000 packages at day at a discount of 20%. It reduces any larger shipper-induced ops disruptions, it reduces the leverage any single shipper has, and it puts a greater degree of pressure on our competitors.

 

[floridays]

No.

Thanks for the response, just a question.
Margins will still be the benchmark,? only looking for a clarification.
We both understand plans as related to bonus and increases.
Is the later a correct statement?

 

[59 Dano]

Smart? They are now poaching freight from ground to fill the planes. LMAO!

It adds density to the Express network and frees up space in a Ground network that is still growing and will be absorbing SmartPost volume.

 

[floridays]

They get rid of a shipper that sends 100,000 packages a day at a discount of 30%. They gain several shippers that send a total of 100,000 packages at day at a discount of 20%. It reduces any larger shipper-induced ops disruptions, it reduces the leverage any single shipper has, and it puts a greater degree of pressure on our competitors.

In theory.
I thought FEDEX Corp already had the business, the article alludes to taking customers from ground and offering the Express guarantee at a discounted rate from Grounds pricing, did I miss something?
I think I may understand the long game, it will prove to be detrimental to UPS and Express employees in the long run.
Can you smell what I'm cooking?

 

[MAKAVELI]

They get rid of a shipper that sends 100,000 packages a day at a discount of 30%. They gain several shippers that send a total of 100,000 packages at day at a discount of 20%. It reduces any larger shipper-induced ops disruptions, it reduces the leverage any single shipper has, and it puts a greater degree of pressure on our competitors.

It adds density to the Express network and frees up space in a Ground network that is still growing and will be absorbing SmartPost volume.

Wouldn't need ground freight if they actually have the shippers you claim they are gaining.

 

[floridays]

It adds density to the Express network and frees up space in a Ground network that is still growing and will be absorbing SmartPost volume.

And lowers Express margins, higher margins being the Gospel for over 20 years. 15%, I remember the benchmark.
I think the moneyed boys are covering their ass at the expense of the workforce that actually produces the numbers on p and l.
Just my thought, my opinion, I don't know everything, I'm trying to understand the way you big boys think.
Please correct my misinterpretations.

 

[Fred's Myth]

Wouldn't need ground freight if they actually have the shippers you claim they are gaining.

The intent of the plan is to take business (and businesses) away from UPS, and possibly USPS. Ground will need the capacity from any lost volume, to handle upcoming Smartpost volume.

 

[It will be fine]

The intent of the plan is to take business (and businesses) away from UPS, and possibly USPS. Ground will need the capacity from any lost volume, to handle upcoming Smartpost volume.

I don’t see this making much of an impact on Ground volume. It’ll be a hit for coast to coast shipments and will be a solid sales addition for acquiring new volume. It’ll have an effect on the margins but I doubt most of us will even notice.

 

[Fred's Myth]

Waiting for the other shoe to fall for Amazon this peak season.....

 

[MAKAVELI]

Waiting for the other shoe to fall for Amazon this peak season.....

They did fine without us last peak.