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How about some rampant speculation?
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<blockquote data-quote="Ricochet1a" data-source="post: 950648" data-attributes="member: 22880"><p>This information actually points to the expected increase in volume for Ground AWAY from getting anything from Express. This actually confirms (marginally) my NOT hearing anything coming out of Express/FedEx Corp sources regarding an impending Express conversion. </p><p></p><p>Here's why.</p><p></p><p>Ground linehaul wouldn't see ANY increase in volume when Express shifts volume, Express AGFS would do all the linehaul and then it would be trucked from Express ramps to Ground terminals. </p><p></p><p>Now if this linehaul contractor does "short" movements of volume too... another story.</p><p></p><p>What I'm seeing - from what you are describing - is FedEx Ground constructing what I'd describe as a regional level "hub" for the movement of Ground volume. A VERY large building (larger than anything you've seen to date), to accomodate receiving volume off of the Ground regional/national linehaul network, to be unloaded, resorted and reloaded onto trucks either going to local area Ground terminals or continuing along the Ground linehaul network.</p><p></p><p>This would require an additional sort to handle the trucks coming in at "odd hours" and there would indeed be enough work to have full time handlers (that would be a miserable job). There would be almost a "continuous sort" going on within a facility such as this. </p><p></p><p>So now at least there is news of construction going on at one Ground "terminal" - so nix the "no construction going on at Ground terminals" part. </p><p></p><p>Any volume coming from Express would quite easily be absorbed within the current Ground terminals (with minor modifications). There simply isn't enough Express volume that would require Ground to massively expand their terminal footprints - it just isn't there. </p><p></p><p>The other thing that points away from this being an Express shiftover, is the completion timeline of the building (year or two in the future). If a conversion was imminent (this July), any new building that was intended to handle the additional Express volume would need to be ready to go by late May (test out all the computer systems, the conveyors, have the decking installed, the lifts installed and tested, etc.) </p><p></p><p>What I'm seeing is some form of spike in either Smartpost (or expansion of what it does) - or FedEx Corp setting up business customers that currently (or in the very recent past) use pre-printed Express shipping labels for returns of products - to use Ground instead. I know that Verison recently shifted over the return of broken products from using Express shipping labels to having them go through Smartpost. I think this is where the trail leads. </p><p></p><p>Product returns AREN'T time sensitive. Gettting replacement items out to the customer is time sensitive, but the return of the "broken" item simply isn't time sensitive. If FedEx Corp realizes that these businesses are getting ready to bolt from using "FedEx", because of the high cost of product returns, FedEx may just be possibly taking proactive steps to reduce the costs of product returns for these companies by deliberately setting up a system where the replacement items go out Express, the returned items go back via Ground. </p><p></p><p>In a roundabout way though, if this is the case, then Express return volume (vast majority is 2nd day) would take a necessary hit. This wouldn't impact local level Express stations though (only the stations which receive this volume). </p><p></p><p>The return of items is a small part of each station's outgoing volume - all done via pickup routes. If this return volume were to go by Ground instead, then there would hardly be any noticible impact on a particular station - EXCEPTING those stations which have all these returns as inbound freight. Their bulk delivery routes to the businesses which are receiving this volume would no longer be needed. A loss of revenue for the Express side of FedEx (but FedEx Corp would be retaining the "volume" start to finish). </p><p></p><p>One has to remember, margins on Ground and Express are quite close (in many cases the movement of a particular piece through Ground creates a GREATER margin for FedEx Corp). If by saving the customer some money by offering Ground returns for items shipped out via Express - AND gaining a slight increase in absolute margin in the return movement of a piece - it would be a win for FedEx Corp and its customers. </p><p></p><p>The thing that still gets me, is the exact nature of the anticipated gain in volume - the ""28% increase". Sounds just too damn exact (or it is the "goal" of someone within FedEx Corp and that figure has made its way down to a local level).</p><p></p><p>I think the answer is somewhere in either Smartpost, or in FedEx shifting the movement of product returns from Express to Ground. </p><p></p><p>Either way, with the growth going on within Ground, it would by necessity be prudent to have construction going on to improve the Ground network carrying capacity - these things have to be done in advance of volume spikes, not after the fact (or bad things happen).</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 950648, member: 22880"] This information actually points to the expected increase in volume for Ground AWAY from getting anything from Express. This actually confirms (marginally) my NOT hearing anything coming out of Express/FedEx Corp sources regarding an impending Express conversion. Here's why. Ground linehaul wouldn't see ANY increase in volume when Express shifts volume, Express AGFS would do all the linehaul and then it would be trucked from Express ramps to Ground terminals. Now if this linehaul contractor does "short" movements of volume too... another story. What I'm seeing - from what you are describing - is FedEx Ground constructing what I'd describe as a regional level "hub" for the movement of Ground volume. A VERY large building (larger than anything you've seen to date), to accomodate receiving volume off of the Ground regional/national linehaul network, to be unloaded, resorted and reloaded onto trucks either going to local area Ground terminals or continuing along the Ground linehaul network. This would require an additional sort to handle the trucks coming in at "odd hours" and there would indeed be enough work to have full time handlers (that would be a miserable job). There would be almost a "continuous sort" going on within a facility such as this. So now at least there is news of construction going on at one Ground "terminal" - so nix the "no construction going on at Ground terminals" part. Any volume coming from Express would quite easily be absorbed within the current Ground terminals (with minor modifications). There simply isn't enough Express volume that would require Ground to massively expand their terminal footprints - it just isn't there. The other thing that points away from this being an Express shiftover, is the completion timeline of the building (year or two in the future). If a conversion was imminent (this July), any new building that was intended to handle the additional Express volume would need to be ready to go by late May (test out all the computer systems, the conveyors, have the decking installed, the lifts installed and tested, etc.) What I'm seeing is some form of spike in either Smartpost (or expansion of what it does) - or FedEx Corp setting up business customers that currently (or in the very recent past) use pre-printed Express shipping labels for returns of products - to use Ground instead. I know that Verison recently shifted over the return of broken products from using Express shipping labels to having them go through Smartpost. I think this is where the trail leads. Product returns AREN'T time sensitive. Gettting replacement items out to the customer is time sensitive, but the return of the "broken" item simply isn't time sensitive. If FedEx Corp realizes that these businesses are getting ready to bolt from using "FedEx", because of the high cost of product returns, FedEx may just be possibly taking proactive steps to reduce the costs of product returns for these companies by deliberately setting up a system where the replacement items go out Express, the returned items go back via Ground. In a roundabout way though, if this is the case, then Express return volume (vast majority is 2nd day) would take a necessary hit. This wouldn't impact local level Express stations though (only the stations which receive this volume). The return of items is a small part of each station's outgoing volume - all done via pickup routes. If this return volume were to go by Ground instead, then there would hardly be any noticible impact on a particular station - EXCEPTING those stations which have all these returns as inbound freight. Their bulk delivery routes to the businesses which are receiving this volume would no longer be needed. A loss of revenue for the Express side of FedEx (but FedEx Corp would be retaining the "volume" start to finish). One has to remember, margins on Ground and Express are quite close (in many cases the movement of a particular piece through Ground creates a GREATER margin for FedEx Corp). If by saving the customer some money by offering Ground returns for items shipped out via Express - AND gaining a slight increase in absolute margin in the return movement of a piece - it would be a win for FedEx Corp and its customers. The thing that still gets me, is the exact nature of the anticipated gain in volume - the ""28% increase". Sounds just too damn exact (or it is the "goal" of someone within FedEx Corp and that figure has made its way down to a local level). I think the answer is somewhere in either Smartpost, or in FedEx shifting the movement of product returns from Express to Ground. Either way, with the growth going on within Ground, it would by necessity be prudent to have construction going on to improve the Ground network carrying capacity - these things have to be done in advance of volume spikes, not after the fact (or bad things happen). [/QUOTE]
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