How's North Carolina TEST STATION doing??

[bbsam]

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..

If it’s only the tip you’ll know it. Investors will also know it. Who do you think X is aiming to please?

 

[vantexan]

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.

Should be chain-of-possession.

 

[vantexan]

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”.

So they're going to greatly increase their Ground truck fleet to transport the extra freight rather than use existing flights? And charge Express rates?

 

[bbsam]

So they're going to greatly increase their Ground truck fleet to transport the extra freight rather than use existing flights? And charge Express rates?

Not at first. Use all the trucking capacity not now being used and build out from there. If it doesn’t need to get on a plane to make commit date, it doesn’t get on a plane. Maybe people notice, maybe they don’t. Remember when they got rid of the green “EX” and made everything orange? This has been planned for a while now.

 

[Maui]

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?

It's ORIGIN based regionally. The program is called "last-mile optimization", but nothing prevents that optimization from happening upstream.

It IS the plan to move to the Ground network at the origin ramp. This is not speculative. These will remain Express packages so the rate will be the Express rate for that account/shipment.

There are numerous packages - especially E2 and XS that never see a plane today. Some aren't even linehaul transported by Express. They are moved on contract carriers Ozark, Swift and others. Ground will now be the contract carrier for some of those.

 

[vantexan]

Not at first. Use all the trucking capacity not now being used and build out from there. If it doesn’t need to get on a plane to make commit date, it doesn’t get on a plane. Maybe people notice, maybe they don’t. Remember when they got rid of the green “EX” and made everything orange? This has been planned for a while now.

Has this been detailed to contractors already? Far different than using Ground "for the last mile."

 

[bbsam]

Has this been detailed to contractors already? Far different than using Ground "for the last mile."

No. But if you think it’s going to be limited to a few markets here and there, you’re smoking something pretty fierce.

 

[Gone fishin]

I’ve read where some analysts say this is the next step for total integration. Which makes sense (ups). The question is are the contractors in or out.

 

[vantexan]

No. But if you think it’s going to be limited to a few markets here and there, you’re smoking something pretty fierce.

Didn't say it would. But going back and reading what the company says about it, pkgs with special codes will be sorted at ramps. Those that can be delivered on time within that ramp's region will be handed off to Ground at the ramp. Those that can't will be flown to hubs, sorted to the correct ramp, and flown to the ramps where they'll be handed off. That makes a lot more sense than each express station handing off to the local Ground station where the pkgs will then enter the Ground network and trucked all over. The ramps support a number of stations so much more efficient to collect and sort the outbound there and then send it on.

 

[bbsam]

Didn't say it would. But going back and reading what the company says about it, pkgs with special codes will be sorted at ramps. Those that can be delivered on time within that ramp's region will be handed off to Ground at the ramp. Those that can't will be flown to hubs, sorted to the correct ramp, and flown to the ramps where they'll be handed off. That makes a lot more sense than each express station handing off to the local Ground station where the pkgs will then enter the Ground network and trucked all over. The ramps support a number of stations so much more efficient to collect and sort the outbound there and then send it on.

Ground has something similar to ramps called “Overnight Transfer Points”. Our terminal is one so maybe those are incorporated into the mix.
As far as what they’ve told us, yes they have been clear that the building stands idle for 10 hours during the day and they intend to use that capacity.

 

[bbsam]

I’ve read where some analysts say this is the next step for total integration. Which makes sense (ups). The question is are the contractors in or out.

Think about that for a moment. How much will X save doing this and what’s the formula to keep contractors in. If X saves $2 billion a year and has to spend $750 million to keep contractors in, is it worth it? And let’s not be naive about it. They will do it for as cheap as they can. But there is cost involved.

 

[Gone fishin]

Think about that for a moment. How much will X save doing this and what’s the formula to keep contractors in. If X saves $2 billion a year and has to spend $750 million to keep contractors in, is it worth it? And let’s not be naive about it. They will do it for as cheap as they can. But there is cost involved.

So you feel Fred would contract out his entire legacy. Not sure , but sometimes cheaper is not better. Do you buy 5 dollar shoes ?
Ups isn’t cheap

 

[bbsam]

So you feel Fred would contract out his entire legacy. Not sure , but sometimes cheaper is not better. Do you buy 5 dollar shoes ?
Ups isn’t cheap

It depends. Continuing on as they have for decades is just a recipe for continued disaster. And he’s on his way out the door. His legacy is pretty much set.

 

[Gone fishin]

It depends. Continuing on as they have for decades is just a recipe for continued disaster. And he’s on his way out the door. His legacy is pretty much set.

The future shall be interesting , that’s for sure

 

[McFeely]

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

Just checked my stops on a recent Monday: I would lose 73% of my P2 if everything resi went away (I have no idea how many were IE, signature, or DG).

On a Wednesday, I could feasibly lose 82% of my stops.

That being said, my area would grow and I'd gain business stops on my neighbor's route. Also would gain the on-calls being sent to my loop. I don't see Express going completely PT as many as said, as I'm sure Express wants to keep the 1-hour oncall window that our customers like and expect.

I'm genuinely curious how this is gonna affect me and my station. Our mgmt hasn't said a word about it, aside from mentioning what was in the news when it was first announced.

 

[Cactus]

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?

The customer will likely be charged the most expensive rate of Express. I’m sure Fred Weasel will see to that.

 

[Cactus]

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”.

Maybe it was just a bunch of “hot air.”

 

[newgirl]

ValueAct Capital just bought a crap ton of FDX stock. I am trying to do some research into them, but my initial vibe is they are the nail in X's coffin.

nCOV ID 19 is gonna get to us first though. Batten down the hatches folks it's gonna be a bumpy night

 

[bbsam]

Maybe it was just a bunch of “hot air.”

Nope. Used to pick them up all the time going to the Jefferson Street hub and Addison hub all the time. Segregated them on the back of the feeders.

 

[fedx]

The customer will likely be charged the most expensive rate of Express. I’m sure Fred Weasel will see to that.

I agree, but I could see eventually a class action lawsuit by customers who get charged air rates when it was never put on a plane to begin with.