How about some rampant speculation?

vantexan

Well-Known Member
I agree with what you're saying. My point is that if Ground is already doing as much volume as Express then they've grown quickly. Some of that has to be former UPS freight. Thus UPS is "screaming" because they can't possibly compete with Ground on price considering their overhead. Thus the war over FedEx's special exemption which looks to have finally settled completely in FedEx's favor. Of course you know all this, just explaining what I meant.
 

MrFedEx

Engorged Member
Both Express and Ground move about 3.7 million pieces a day now.

A 28% bump for Ground (not hopeful, but anticipated) has to be a result of shifting of services from somewhere. That amounts to an increase of almost a million pieces a day.

That would be beyond the best dream of any sales type to get an increase of volume, within a short time frame, and on a supposed date certain.

Look at page 19 of the report.

Express has revenue of $10.7 Billion for domestic Express volume. $7.75 Billion of that is for overnight volume, the remainder is for "deferred" volume (non-overnight).

As a percentage of US domestic revenues, overnight volume brings in 72.42% of revenue.

Non overnight revenue is the difference between the above and 100%, or just shy of 28%....

I haven't heard of anything coming this quickly, but I do know that Express is on a trend towards buliding new, larger stations right now. No news on large purchases of equipment for Ground facilities either at this stage.

However... with the threat of unionization eliminated within Express now, if Fred wanted to pull the trigger on shifting of volume, there isn't much holding him back.

As always, look for the installation of caster decking in Ground terminals as the first sign the trigger has been pulled. I wouldn't anticipate Express making any announcement (either publically or internally) until they have all the infrastructure already in place and procedures in place for moving 2nd/3rd day volume directly from the ramps to Ground terminals.

Part of getting the infrastructure in place though would be notifying Ground contractors to "expand" their capability in anticipation of the shift, without actually telling them what the "new volume" is or where it is coming from. If Ground was notified that some new account was gained (or will be) from UPS, they'd include that as part of the rationale for expansion of capability. This "source" of bbsam's (I use sources too...) was very clear about an increase of volume but mum on where it was coming from.

You can connect the dots if you want. At this point though, I haven't heard any confirming data from the people that keep me up to speed.

Expect a "denial" from 59Dano momentarily.
 

59 Dano

I just want to make friends!
Fred knows that there would be a massive Express response to a switchover of services to Ground. The RLA is still Fred's ace in the hole because keeping us in that jail is his best insurance against a unionized Express division, but the potential liberalization of voting requirements for the RLA might have Smith thinking twice. I don't think it will be easy money for him because Ground is going to have issues with service commitments and on-calls. As of now, just getting it there on the designated day is Ground "service". Express is different in that regard.

What does he have to think twice about? Organizing under the RLA is more difficult now than it ever has been at any other time that FedEx has been covered under it. As for Ground meeting services issues and so forth, this plan has supposedly been in the works for 4 years, and they haven't even gotten over the first hurdle of operational feasibility? It's getting to the point that no matter what happens, it's being explained with "Greedy Fred is planning to switch freight over to Ground."

I think his real fear is a legal one, because using Ground employees to deliver packages that go through the Express linehaul system might jeopardize the Ground scam.

It's a simple transaction between two entities, with one opco acting as the vendor to the other.
 

Lucho Kaiser

Active Member
The ground driver and I get along really well on our route, we even do lunches from time to time. We both have the same area down to the street. 2 years ago we had about equal packages and deliveries, both of us right at 60 or so del and 25-30 pickups for approx 120 packages being del, 100 or so being picked up each. Now, two years later he's been upgraded to a 900 while im still in my 700. He has 20 more deliveries then I at approx 40 more packages. He now picks up 25 more pickups adding nearly 250 packages, he bulks out his 900 each day with 300-400 packages, im still a t 120ish a day. A second ground truck was added to the route to help with his overflow. His contractor simply hired a 20 hour a week guy to del whats left once his pickup cycle begins. Many shipments i used to pickup from customers Now have ground awb's, sales has pulled 7 of my daily pickups due to ground only so many times. Guess my point is I definately see a shift, not sure of the reason but in my experience Ive lost 12 hours a week (all overtime) from two years ago due to this.
 

59 Dano

I just want to make friends!
Expect a "denial" from 59Dano momentarily.
No denial. I just find it funny that we've gone from "Fred is in no hurry now that he got his RLA wishes; Ground is isn't ready to handle the Express service commitments, etc." to "They're about to pull the trigger!"

It took you less than 24 hrs!
 

MrFedEx

Engorged Member
What does he have to think twice about? Organizing under the RLA is more difficult now than it ever has been at any other time that FedEx has been covered under it. As for Ground meeting services issues and so forth, this plan has supposedly been in the works for 4 years, and they haven't even gotten over the first hurdle of operational feasibility? It's getting to the point that no matter what happens, it's being explained with "Greedy Fred is planning to switch freight over to Ground."



It's a simple transaction between two entities, with one opco acting as the vendor to the other.

It isn't a "simple transaction" when you have an ongoing dispute whether Ground drivers are non-employees. Legally, where do you draw the line when you have two intertwined package systems in which you have non-employees and employees performing the same functions on the same packages? Again, FedEx will have direct control over the process to a degree which precludes the existence on non-employees.
 

MrFedEx

Engorged Member
That would be a completely separate issue from a transaction between express and ground.

Explain the "transaction" between Express and Ground when it becomes an integrated package system? Ground Courier A picks-up the E2 box from a dispatch sent from an Express/Ground dispatcher. The pkg is transported to an Express ramp in either a Ground tractor-trailer or an Express tractor-trailer and is loaded into an Express container on an Express plane by Express employees. It is flown by Express pilots to an Express ramp where Express employees download the container and either load it onto a Ground CTV or Express CTV to be taken to the Ground facility. There, it is unloaded by Ground employees and delivered in a ground truck.

This does not appear to me to be a completely separate issue.
 
Last edited:

bbsam

Moderator
Staff member
Explain the "transaction" between Express and Ground when it becomes an integrated package system? Ground Courier A picks-up the E2 box from a dispatch sent from an Express/Ground dispatcher. The pkg is transported to an Express ramp in either a Ground tractor-trailer or an Express tractor-trailer and is loaded into an Express container on an Express plane by Express employees. It is flown by Express pilots to an Express ramp where Express employees download the container and either load it onto a Ground CTV or Express CTV to be taken to the Ground facility. There, it is unloaded by Ground employees and delivered in a ground truck.

This does not appear to me to be a completely separate issue.
It seemed to me that somehow the classification of the driver would enter in. Why would it? It's no riskier for Express to enter into that transaction as it is for any company that ships with Ground.
 

MrFedEx

Engorged Member
It seemed to me that somehow the classification of the driver would enter in. Why would it? It's no riskier for Express to enter into that transaction as it is for any company that ships with Ground.

FedEx is the mothership, so it's inaccurate to compare Express to "any company that ships with Ground".
 

MrFedEx

Engorged Member
Not with regards to the perceived risk that we are speaking of.

I disagree. It's entirely possible that regulators will consider it one company, which it both is and is not. FedEx, the corporation, owns all the opcos, but Ground is a special animal in that it's "employees" are not considered as such legally (as of now). But, once Express and Ground become integrated, Ground non-employees will have a much better case for saying they are FedEx employees because the operations are no longer separate. In fact, as far as E2 and XS are concerned, they are completely integrated. FedEx makes and enforces the rules, procedures, and guidelines for Ground drivers, Express linehauls their freight, dispatches their E2 and XS pickups (coming soon), handles their freight, and may even deliver the freight to their building, yet they (Ground drivers) still are not "employees" of that same company?
 

vantexan

Well-Known Member
Bottom line Ground drivers work for contractors, not FedEx. Serious money finds excellent legal representation which comes up with ways to legally game the system. Might not like it, but FedEx seems to have an ironclad system in place. If I was out of work I'd be knocking on Ground's door. At least until I could find something better. My mom worked for 30 years working for Bob Evans, Shoney's, and Hardee's. In my hometown restaurant work was one of the few things available. She worked for at least 2 of those places at the same time all of those years. It's a damn shame that it's incredibly difficult now to find anything better than no benefit, low pay hump jobs. A shame to everyone but the owners and the management class that has been working to get the market place back to this stripped down state. Taking away from everyone means a huge amount for them.
 

MrFedEx

Engorged Member
Bottom line Ground drivers work for contractors, not FedEx. Serious money finds excellent legal representation which comes up with ways to legally game the system. Might not like it, but FedEx seems to have an ironclad system in place. If I was out of work I'd be knocking on Ground's door. At least until I could find something better. My mom worked for 30 years working for Bob Evans, Shoney's, and Hardee's. In my hometown restaurant work was one of the few things available. She worked for at least 2 of those places at the same time all of those years. It's a damn shame that it's incredibly difficult now to find anything better than no benefit, low pay hump jobs. A shame to everyone but the owners and the management class that has been working to get the market place back to this stripped down state. Taking away from everyone means a huge amount for them.

If the 2 systems become integrated, the classification of Ground drivers could be reconsidered. This may be what is holding Fred back from pulling the trigger. FedEx doesn't like to do anything unless their legal ducks are in a row, but they have had some rather spectacular failures over the years that have cost them big money.
Class-action lawyers are always on the prowl for big cases with big payoffs, and Ground might be a prime target. I think Smith knows that he is toeing a line in the sand and is proceeding incrementally rather than all at once. Analogy of the boiled frog aside, FedEx might not be able to continue to classify Ground drivers as non-employees.
I'm no expert, but I have studied the issue, and it comes down to what's called "degree of control". If an employer exerts a degree of control over a contracted employee to an extent which meets that which is exerted over an employee, then the contracted employee legally becomes an actual employee.
Given the degree of control Terminal Managers have in Ground facilities, and the overall control exerted by Memphis and Pittsburgh, Fred may find that he has pooped in his own nest and blown his scam. Time will tell.
 

vantexan

Well-Known Member
But as long as the courts see Ground drivers as employees of contractors who are providing a service to FedEx then I don't see how much is going to change. I doubt when the lawyers and labor experts were crafting the ISP model that they just threw out this idea and FedEx decided to run with it. Every detail had to pass muster, billions of dollars depended on it. Are there lawsuits out there challenging the ISP model, or are the lawsuits that still remain challenging the old contractor model that is in States that haven't converted yet?
 

MrFedEx

Engorged Member
But as long as the courts see Ground drivers as employees of contractors who are providing a service to FedEx then I don't see how much is going to change. I doubt when the lawyers and labor experts were crafting the ISP model that they just threw out this idea and FedEx decided to run with it. Every detail had to pass muster, billions of dollars depended on it. Are there lawsuits out there challenging the ISP model, or are the lawsuits that still remain challenging the old contractor model that is in States that haven't converted yet?

As long as FedEx continues to increase their degree of control, the ISP model is always in jeopardy.
 

59 Dano

I just want to make friends!
Explain the "transaction" between Express and Ground when it becomes an integrated package system? Ground Courier A picks-up the E2 box from a dispatch sent from an Express/Ground dispatcher. The pkg is transported to an Express ramp in either a Ground tractor-trailer or an Express tractor-trailer and is loaded into an Express container on an Express plane by Express employees. It is flown by Express pilots to an Express ramp where Express employees download the container and either load it onto a Ground CTV or Express CTV to be taken to the Ground facility. There, it is unloaded by Ground employees and delivered in a ground truck.

This does not appear to me to be a completely separate issue.

We don't have Ground/Express dispatchers who send Ground drivers to pick up Express packages. The hair-splitting is getting ridiculous, considering that a switchover is no more than an old rumor at this point and those who really, really believe it can't decide if it's about to happen really soon or if it's not going to happen for a while (but they believe both!).
 

59 Dano

I just want to make friends!
Bottom line Ground drivers work for contractors, not FedEx. Serious money finds excellent legal representation which comes up with ways to legally game the system. Might not like it, but FedEx seems to have an ironclad system in place. If I was out of work I'd be knocking on Ground's door. At least until I could find something better. My mom worked for 30 years working for Bob Evans, Shoney's, and Hardee's. In my hometown restaurant work was one of the few things available. She worked for at least 2 of those places at the same time all of those years. It's a damn shame that it's incredibly difficult now to find anything better than no benefit, low pay hump jobs. A shame to everyone but the owners and the management class that has been working to get the market place back to this stripped down state. Taking away from everyone means a huge amount for them.

There are lots of places like the one with the bad jobs that you've described. I lived in one at one time. I hated it because, among other things, there wasn't much of a future there. I moved to a place with more opportunity. Problem solved. That town wasn't the fault of "the system," or of rich people. Some places are crap, others are not.
 

MrFedEx

Engorged Member
We don't have Ground/Express dispatchers who send Ground drivers to pick up Express packages. The hair-splitting is getting ridiculous, considering that a switchover is no more than an old rumor at this point and those who really, really believe it can't decide if it's about to happen really soon or if it's not going to happen for a while (but they believe both!).

Combining Ground and Express is in the works, so you absolutely will have Express dispatchers sending pickups to Ground drivers.
 
Top