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How about some rampant speculation?
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<blockquote data-quote="59 Dano" data-source="post: 943829" data-attributes="member: 23516"><p>Absolutely, if the only consideration is the difference in the cost of labor between the two opcos.</p><p></p><p></p><p></p><p>I'm aware. What I'm pointing out is that the 'cut' would likely be a percentage of the billed charges for the package, and we're talking about the cheapest Express options. It has to be enough to properly and profitably satiate both the Ground operation and the contractors who work within it. I'm looking at this from the Ground side of things. No one is doubting that there's a savings of labor expenses at Express.</p><p></p><p> </p><p></p><p>Internally, the refund is charged to, and paid by, the offending opco. In a switchover scenario, we would have an issue with Ground blowing service on a package. So who refunds the money? If Express refunds it, it's losing a buttload because it's lost all of the revenue PLUS the cost of handing the package off to Ground. If Ground refunds it, it's paying money that far exceeds the revenue it got. </p><p></p><p> </p><p></p><p>I've never denied that the Ground contractor model is perfect for the service it is offering. The contractor model is a terrible idea for Express for the reasons (and probably others) that I mentioned earlier. The expense of an overnight air operation requires way too much standardization (forgive me if my syntax goes south; it's late and I'm tired) and uniformity. As diverse as Express managers can be, contractors who are more concerned with their own bottom lines (and rightfully so) than Express' present too much operational variance. Maybe bbsam can shed some light, but it's much easier to fire a manager for screwing something up at Express than it is to boot a contractor from Ground. There are some horror stories from DHL about contractors and their effects on the efficiency of the company's operations.</p></blockquote><p></p>
[QUOTE="59 Dano, post: 943829, member: 23516"] Absolutely, if the only consideration is the difference in the cost of labor between the two opcos. I'm aware. What I'm pointing out is that the 'cut' would likely be a percentage of the billed charges for the package, and we're talking about the cheapest Express options. It has to be enough to properly and profitably satiate both the Ground operation and the contractors who work within it. I'm looking at this from the Ground side of things. No one is doubting that there's a savings of labor expenses at Express. Internally, the refund is charged to, and paid by, the offending opco. In a switchover scenario, we would have an issue with Ground blowing service on a package. So who refunds the money? If Express refunds it, it's losing a buttload because it's lost all of the revenue PLUS the cost of handing the package off to Ground. If Ground refunds it, it's paying money that far exceeds the revenue it got. I've never denied that the Ground contractor model is perfect for the service it is offering. The contractor model is a terrible idea for Express for the reasons (and probably others) that I mentioned earlier. The expense of an overnight air operation requires way too much standardization (forgive me if my syntax goes south; it's late and I'm tired) and uniformity. As diverse as Express managers can be, contractors who are more concerned with their own bottom lines (and rightfully so) than Express' present too much operational variance. Maybe bbsam can shed some light, but it's much easier to fire a manager for screwing something up at Express than it is to boot a contractor from Ground. There are some horror stories from DHL about contractors and their effects on the efficiency of the company's operations. [/QUOTE]
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