How's North Carolina TEST STATION doing??

[vantexan]

I thought the plan was to divert the freight before it got to the planes. I imagine eventually they will do both but I think the current plan is to divert at the origin point. I don’t know anything about the cost of flying freight but I’m sure it’s cheaper to toss as much on trucks as possible.

People remark all the time that their pkg, as they tracked online, was picked up in a city two hours away, flown to Memphis which might be halfway across the country, then back to where they live. People are paying for fast delivery and those flights are going to fly anyways. As Fred said, Ground is taking over the last mile. But to your point, in some areas, like the Northeast, they have a Bleed Off and Bypass Operation, BABO for short. Rather than fly to Memphis regional freight is sorted and trucked from distribution points. Works in high population areas with a lot of stations.

 

[vantexan]

The freight will be trucked from the origin station. They aren't putting it on planes.

You're saying all the little stations around the country will send P-2 freight off by truck to a Ground station for further distribution rather than sent to the ramp, flown to a hub, routed to destination in separate containers, and then brought to Ground hubs? How will they possibly get freight delivered ontime? People are paying for Express service and Ground is supposed to be taking over "the last mile."

 

[It will be fine]

People remark all the time that their pkg, as they tracked online, was picked up in a city two hours away, flown to Memphis which might be halfway across the country, then back to where they live. People are paying for fast delivery and those flights are going to fly anyways. As Fred said, Ground is taking over the last mile. But to your point, in some areas, like the Northeast, they have a Bleed Off and Bypass Operation, BABO for short. Rather than fly to Memphis regional freight is sorted and trucked from distribution points. Works in high population areas with a lot of stations.

That’s the entirety of the Ground network. The percentage of points that can be hit in 2 days is pretty high upwards of 80% of the country depending on where you start.

 

[vantexan]

That’s the entirety of the Ground network. The percentage of points that can be hit in 2 days is pretty high upwards of 80% of the country depending on where you start.

So if that's the case Ground isn't just delivering the last mile, but completely taking over a large percentage of Express business.

 

[vantexan]

Most of what Express delivers is flown in, then trucked to stations from ramps. If they are putting a different URSA code on Ground pkgs then they will be in separate containers, ready to take off plane and loaded on a Ground truck. Since this is typically 2 day or 3 day service it shouldn't be a problem to get them over to Ground in time.

Cactus I'm optimistic about that but Ground trucking from Boise to Atlanta in time to get a 2-day pkg delivered is realistic?

 

[It will be fine]

Cactus I'm optimistic about that but Ground trucking from Boise to Atlanta in time to get a 2-day pkg delivered is realistic?

Ground wouldn’t make it that far in 2 days. This move would pull XS for about half the country out of Boise.

 

[It will be fine]

Freight coming out of Kansas City would hit pretty much the whole lower 48 within 3 days.

 

[Maui]

People remark all the time that their pkg, as they tracked online, was picked up in a city two hours away, flown to Memphis which might be halfway across the country, then back to where they live. People are paying for fast delivery and those flights are going to fly anyways. As Fred said, Ground is taking over the last mile. But to your point, in some areas, like the Northeast, they have a Bleed Off and Bypass Operation, BABO for short. Rather than fly to Memphis regional freight is sorted and trucked from distribution points. Works in high population areas with a lot of stations.

These resi packages are excellent candidates for FXG. Those that originate in-market or nearby. FXE can reduce the cost of that flight. 767 replacing MD-10. Reducing flight crew and saving on MX and fuel as well as increased reliability. FXE can reduce flight hours, save money, and provide better linehaul.

You're saying all the little stations around the country will send P-2 freight off by truck to a Ground station for further distribution rather than sent to the ramp, flown to a hub, routed to destination in separate containers, and then brought to Ground hubs? How will they possibly get freight delivered ontime? People are paying for Express service and Ground is supposed to be taking over "the last mile."

No. The origin ramp is the diversion point. The stations will move all their freight to the ramp. The exact plan will vary by market as some ramps have better sort capacity than others. In most large markets it will probably be sorted and bulk loaded at the origin ramp into FXG trailers. This will be the most common practice. In some places that isn't feasible and the market will have different solutions.

So if that's the case Ground isn't just delivering the last mile, but completely taking over a large percentage of Express business.

The number of packages in the initial phase will be less than Express lost from Amazon.

Overall, this move makes sense. While some customers will see that the packages they send to X are getting delivered by FXG and just start shipping with them, Express is keeping the lion's share of these packages from pups. FXE makes very little on these packages now, but still gets higher revenue than Ground. Now, there will be cost reductions to move that freight once it is in FedEx possession. I do not know the cost/pkg savings, but even a couple dollars each would save one $1 billion.

Not all resi ES/XS will be eligible and during phase 1 no SO is included. This is not a "test" though. This is happening and it will succeed. We just do not how much yet. The move is better for FXG and FXE. Express will now go get more higher yielding business and Operations officers - MDs and VPs will be on calls with sales to gain more business. The company is changing and moving toward vastly improved profitability. I want employees to see some of that money. At least there's a chance if more is available.

 

[Maui]

View attachment 283914
Freight coming out of Kansas City would hit pretty much the whole lower 48 within 3 days.

Saturday and Sunday aren't regular operating days for Express either so making the commit is easy from Thursday and Friday night.

 

[MAKAVELI]

These resi packages are excellent candidates for FXG. Those that originate in-market or nearby. FXE can reduce the cost of that flight. 767 replacing MD-10. Reducing flight crew and saving on MX and fuel as well as increased reliability. FXE can reduce flight hours, save money, and provide better linehaul.



No. The origin ramp is the diversion point. The stations will move all their freight to the ramp. The exact plan will vary by market as some ramps have better sort capacity than others. In most large markets it will probably be sorted and bulk loaded at the origin ramp into FXG trailers. This will be the most common practice. In some places that isn't feasible and the market will have different solutions.



The number of packages in the initial phase will be less than Express lost from Amazon.

Overall, this move makes sense. While some customers will see that the packages they send to X are getting delivered by FXG and just start shipping with them, Express is keeping the lion's share of these packages from pups. FXE makes very little on these packages now, but still gets higher revenue than Ground. Now, there will be cost reductions to move that freight once it is in FedEx possession. I do not know the cost/pkg savings, but even a couple dollars each would save one $1 billion.

Not all resi ES/XS will be eligible and during phase 1 no SO is included. This is not a "test" though. This is happening and it will succeed. We just do not how much yet. The move is better for FXG and FXE. Express will now go get more higher yielding business and Operations officers - MDs and VPs will be on calls with sales to gain more business. The company is changing and moving toward vastly improved profitability. I want employees to see some of that money. At least there's a chance if more is available.

Nice spin, but it's very contradictory. Are they reducing air capacity or not?

 

[Maui]

Nice spin, but it's very contradictory. Are they reducing air capacity or not?

What's contradictory? They will reduce air capacity. AND they will go after more business.

The highest yielding packages after FO are IP. Why fly empty planes across the ocean?

 

[MAKAVELI]

What's contradictory? They will reduce air capacity. AND they will go after more business.

The highest yielding packages after FO are IP. Why fly empty planes across the ocean?

Reducing air capacity to gain more business. Lol

 

[Maui]

Reducing air capacity to gain more business. Lol

No reducing it when the business isn't there. Internationally that's now. With Ground it's as more are diverted.

You're thinking too small-minded here. FedEx can flex capacity. They need more higher-yielding packages. They fill the planes that are flying and the trucks that are on the road. As crazy as it sounds more volume at higher yields and margins is a pretty good argument to flex capacity back up if necessary.

 

[MAKAVELI]

No reducing it when the business isn't there. Internationally that's now. With Ground it's as more are diverted.

You're thinking too small-minded here. FedEx can flex capacity. They need more higher-yielding packages. They fill the planes that are flying and the trucks that are on the road. As crazy as it sounds more volume at higher yields and margins is a pretty good argument to flex capacity back up if necessary.

That high yield premium service freight has flatlined. E-commerce is the primary growth in this industry. I think you are overly optimistic as to how fast FedEx can adjust air capacity and workforce to any increase in demand.

 

[fatboy33]

I just looked at my P2. With Ground taking P2 I would literally lose 75% of what I have today.

I'm about 60 pct business but still I'd hate to lose 40 pct of my route.

 

[fatboy33]

It's not an over dramatization when you think about it probably the biggest change to express that anybody has experience so far.

Possible they're going to drag their feet until the SFA season is completed? We'll know if we're getting more than the tip then..

 

[fedx]

The freight will be trucked from the origin station. They aren't putting it on planes.

I thought this was about "last mile" delivery. I thought they would still fly the freight to the destination city, then hand it off to Ground for delivery. Is that not the case? If not, will customers be charged FedEx Ground rates for the shipments since it won't be flown?

 

[vantexan]

I thought this was about "last mile" delivery. I thought they would still fly the freight to the destination city, then hand it off to Ground for delivery. Is that not the case? If not, will customers be charged FedEx Ground rates for the shipments since it won't be flown?

I think FedEx would take a huge hit if they're charging Express rates and then having Ground take over the transport of the package too. Reminds me of the late 80's when "20/20" had a segment on FedEx charging high rates for secure service where there were chain-of-command signatures every step of the way but a couple of former employees blew the whistle on what really happened. No special security on the package, just a signature by everyone who handled it along the way. FedEx dropped the service.

 

[vantexan]

View attachment 283914
Freight coming out of Kansas City would hit pretty much the whole lower 48 within 3 days.

But not two days and nothing was said about freight being diverted to Ground directly from stations. Said Ground was handling "the last mile" of delivery.

 

[bbsam]

I think FedEx would take a huge hit if they're charging Express rates and then having Ground take over the transport of the package too. Reminds me of the late 80's when "20/20" had a segment on FedEx charging high rates for secure service where there were chain-of-command signatures every step of the way but a couple of former employees blew the whistle on what really happened. No special security on the package, just a signature by everyone who handled it along the way. FedEx dropped the service.

Not really. We used to send NDA letters from UPS locally to Chicago. They never got on a plane. A small segment of people raised a stink about it but overall people were focused on the “next day” and not on the “air”.