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How about some rampant speculation?
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<blockquote data-quote="59 Dano" data-source="post: 943787" data-attributes="member: 23516"><p>Here are obstacles that I see in those plans...</p><p></p><p>Diverting freight - Branding issues, for one, but who the hell knows how much of an expense that would be. The main concern is the cost of diverting and how it would be implemented. Without a major corporate reorganization (merging Ground and Express, which ain't gonna happen), it will not be as simple as Express tossing Ground some freight to deliver. Express would most likely be paying Ground a percentage of the billed shipping charges to take possession and deliver the freight. That's great if everyone is paying the published shipping rates, but we all know that most Express customers get a very respectable discount. For Ground and the contractors to make any money off of it, they'll have to get a good price on the freight. For it to benefit Express, they'll have be able to give it to Ground for next to nothing. The seemingly impossible part is to be able to do it in a way that increases the profit margins of both opcos.</p><p></p><p>There are the other issues, like which side would be responsible for service issues. If Ground loses the package, who is responsible? The customer sent it via Express. That kind of thing.</p><p></p><p>Implementing the contractor model at Express - It was tried with Airborne and DHL with no success. There's too little room for error in the overnight segment and there would be too many contractors --too many different personalities-- for the company to manage. FedEx needs the ability to make big operational changes at the drop of a hat if possible, something that isn't so easy with lots of contractors who have a financial stake in the thing and who want to have a say. With things that tight I think it's essential that everyone be under the same tent with the same incentives.</p><p></p><p>Of course anything's possible in the future, but those are probably just the tip of the iceberg of considerations.</p></blockquote><p></p>
[QUOTE="59 Dano, post: 943787, member: 23516"] Here are obstacles that I see in those plans... Diverting freight - Branding issues, for one, but who the hell knows how much of an expense that would be. The main concern is the cost of diverting and how it would be implemented. Without a major corporate reorganization (merging Ground and Express, which ain't gonna happen), it will not be as simple as Express tossing Ground some freight to deliver. Express would most likely be paying Ground a percentage of the billed shipping charges to take possession and deliver the freight. That's great if everyone is paying the published shipping rates, but we all know that most Express customers get a very respectable discount. For Ground and the contractors to make any money off of it, they'll have to get a good price on the freight. For it to benefit Express, they'll have be able to give it to Ground for next to nothing. The seemingly impossible part is to be able to do it in a way that increases the profit margins of both opcos. There are the other issues, like which side would be responsible for service issues. If Ground loses the package, who is responsible? The customer sent it via Express. That kind of thing. Implementing the contractor model at Express - It was tried with Airborne and DHL with no success. There's too little room for error in the overnight segment and there would be too many contractors --too many different personalities-- for the company to manage. FedEx needs the ability to make big operational changes at the drop of a hat if possible, something that isn't so easy with lots of contractors who have a financial stake in the thing and who want to have a say. With things that tight I think it's essential that everyone be under the same tent with the same incentives. Of course anything's possible in the future, but those are probably just the tip of the iceberg of considerations. [/QUOTE]
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