"I'll Shut It Down If You Go Teamster"

Discussion in 'FedEx Discussions' started by MrFedEx, Sep 9, 2009.

  1. MrFedEx

    MrFedEx Engorged Member

    Over the years I've heard many variations on the theme that Fred would rather shut FedEx down than have us go union. Some of my detractors on the BC are particularly fond of saying that Fred would do this. Although I've never actually seen evidence of Smith saying it, it wouldn't surprise me. It would just be another thinly veiled threat designed to scare and intimidate employees. It wouldn't matter that it's illegal to say we'd lose our jobs, but legal matters don't seem to impede Mr.Smith, do they?

    Reality says that Smith is bluffing, and here's why. In 1989, Smith forced all Flying Tigers employees to de-certify...or lose their jobs. All of them did, except the flight attendants. Within months, Fred shut down the highly profitable passenger charter operations of Tigers and those pesky union members were history. But only for a short time.

    A few years later, the pilots formed an in-house union, primarily to protect themselves from Smith. This proved to be a weak organization, and Fred continued to play games with them. Eventually, FedEx pilots joined ALPA, and have become among the highest-paid professionals in the industry. Smith threatened them during negotiations too, and he eventually caved. our pilots have a real retirement plan too..not the PPP.

    If the RLA exemption gets tossed we can expect a firestorm of rhetoric about "losing our jobs". In fact, it's already started in Colorado, a strong indicator that FedEx is very worried they are going to lose. Never mind that they aren't supposed to be doing it.

    We still would have to vote the union in and force Smith to the bargaining table, which would unleash more threats, mis-information and venom. There's also the possibility that Fred will "throw us a bone" in the form of a hefty raise that would still fall short of Teamster wages, but would save FedEx big money. He might also try to weasel out of a retirement package and try to retain the PPP in this manner.

    I don't think we would be that easy to replace. Like UPS drivers, FedEx couriers are highly trained and efficient. You can't pull someone off the street and make them competent in a few weeks without throwing the entire system into utter chaos. Smith will have to negotiate because he can't afford a large scale defection of customers to UPS.

    Don't let the threats scare you. Bullies rely on them, and when their bluff eventually gets called (or someone beats them up) they fold like a house of cards. Fred is on shaky ground, and he's going to huff and puff a lot in the coming months. He needs us more than we need him.
  2. DorkHead

    DorkHead Active Member

    Well said!
    My guess is he will offer the you a hefty raise similar to the raise you received after the 1997 strike. Back then he said it was for all the hard work you people did during our strike. But we all know the real reason.
  3. TechGrrl

    TechGrrl Space Cadet

    Do you guys have something like our DIAD, that actually lays out the stop for stop delivery order for you, or does the courier have to have it in their head? If the latter, FredEx DEFINITELY has a problem bringing in newbies, since delivering IS highly skilled area knowledge making efficiency and service possible.

    No one who hasn't actually done the job has an appreciation for what role area knowledge plays in making a difference between a good day and a freaking nightmare.....
  4. MrFedEx

    MrFedEx Engorged Member

    The PowerPad doesn't put stops in delivery order....not yet. Perhaps at some locations they are doing testing, but not at my station. Our ROADS system has never really lived-up to expectations and creating an ordered delivery log is surely on the "to-do" list.Your comments are right on the money. Skill and competence matter, and the job is a lot more than just driving around and tossing out boxes. I'm always amazed at customers who think our jobs are easy and don't take any intelligence. Routing, time management and logical decision-making are all learned skills. Add-in the usual variables like traffic, weather, bulk stops, and shippers who aren't ready, COD's etc....the list goes on and on for what can and does go wrong every day. Just more pressure.
  5. Ricochet1a

    Ricochet1a New Member

    Right now Express is ironing out the issues with ROADS as far as correctly designating drop zones and getting route boundaries correct. At my location they have done a good job of getting what are traditional drop zones correctly identified.

    The Couriers at my location are finally beginning to see the light regarding their needed presence on the AM sort. I can take someone off the street and teach them to load all pieces marked with route number 123 into this truck, and place any pieces that have an alternate route ID (drop zones) either to the left or right of the truck. The next implemention of ROADS will be the placing of a stop order number on the label, enabling someone off the street that understands the concepts of "greater than and less than", to get packages into stop order. When this is accomplished, Couriers will no longer be needed to run the AM sort. Handlers (just like UPS) can be brought in to run the sort and load trucks into stop order. Progress at work.

    The next thing that will happen (as I've stated for months) is the transfer of 2nd and 3rd day volume to Ground for delivery. This will reduce inbound volumes to Express stations by more than half. With the reduced inbound volumes and technology eliminating the need for skilled Couriers to run the AM sort, all that will be needed is part-time delivery Couriers to get out the overnight volume. This can easily be accomplished within 6 hours if the delivery Couriers aren't running the sort (just pretrip trucks, download vanscans and computer determined stop order).

    New software will be used to indicate to the Couriers what the next scheduled stop address is. After a stop is accomplished, the powerpad will indicate what the next delivery address is (no need to even look at the cargo area contents). The power pad will indicate number of pieces to be delivered at that address and the Courier will only have to ensure that they pull out all pieces for that address.

    This can all be done under 6 hours for existing routes if they are just delivering overnight volume and the Couriers don't work the sort. Given the reduced volume, the committment time for standard overnight can probably be moved up to 2 PM in most service areas (attempting to get an advantage over UPS).

    From a business standpoint, it makes sense. To all the employees that poured it out over the years building Express, it is a stab in the back. If Fred would just come out and admit this is the plan, then people could make plans. But nothing of the "sort" will be done. Fred wants FT hourly Couriers to think all is well and they have career prospects for the next 10-20 years. It is more like 2-4 years.
  6. TechGrrl

    TechGrrl Space Cadet

    I think you may be underestimating how hard this is. Look at a lot of the comments on the "I want to live in I.E. land!" thread about how our preload software works pretty well, but someone still has to load the truck correctly, etc.

    UPS moved away from the drivers loading their own cars over 30 years ago. The DIAD was instituted almost 20 years ago. The preload software has been fully deployed for about 5 years, and the driver job STILL requires a lot of skill and area knowledge to do well. I doubt it is any different at FedEx, particularly under the time pressure of Express.
  7. Ricochet1a

    Ricochet1a New Member

    I'm not underestimating how hard it is. I'm stating what FedEx upper management wants. You are talking about reality, FedEx is envisioning utopia. They know it will take at least 2 years to get to where they want to be; they are planning on it taking no more than 4 years. UPS has a headstart in using software and address ordering. FedEx is planning on using that knowledge to fast-track their own implementation of software controlled delivery stop ordering.

    When utopia is acheived, each route will have a software dictated pattern for delivery for all addresses within that route and flex areas. The software already identifies what route pieces are to be placed onto. Once this is perfected and 2-3 day volume is transferred to Ground, Couriers will only be needed to place their truck into stop order. With just overnight volume present, this will take the typical Courier/route about 20 minutes to perform at most. FedEx could go to a pure part time Courier force with just this level of technology and diversion of non-overnight to Ground.

    With the perfection of software controlled stop ordering, handlers can perform the process of getting the truck in order and the Courier would only need to do a brief check to see if any major errors are present. The goal is to have Couriers only pre-trip their truck, download the data with the stop addresses and pieces per stop and go. Given the processing power of current software, I think FedEx will pull it off in the next 4 years.

    It would take time to perfect the "logic" for stop ordering for each route; but with graphical mapping technology and the ability to "connect the dots", engineers can slowly modify the software to prevent any serious mistakes in stop ordering. They are already working on modeling traffic flows, maintaining same side of street delivery order (up one side, down the other) and minimizing left turns and use of problem intersections. The real "problem child" routes will have engineers ride along to see if there is anything that their software missed.

    FedEx has always been fond of technological solutions to problems. This is just the latest attempt to use technology by FedEx. In the past technology was primarily focued on providing service to the customer in terms of constant tracking of package movements through the FedEx system. That same technology is used to account for every minute of employee time with all the various FAMIS codes we have to use whenever we change "tasks". That obsessive accounting of our time is used to track trends at stations and ensure no variation in hours occurs without being immediately noticed.

    With ROADS, technology is being used for the sole intent of reducing skilled labor costs. The cost of technology has fallen so fast that it is now cheaper to use than labor. I'm not against the use of technology, it is necessary for economic growth for a society. BUT, the deliberate concealment of the intent behind its use is a problem for labor. In the absence of a labor union, Express Couriers are about to get hit with a proverbial ton of bricks when they realize their career prospects have been taken away and they are in their 30's or even worse in their 40's and have few options available to them. This is the 800 pound gorilla at FedEx. Very few even know it is there and most of the rest are ignoring its presence (wishful thinking, I'll cross that bridge when I come too it, economy is bad right now, don't want to worry about tomorrow...).
  8. bbsam

    bbsam Moderator Staff Member

    Home delivery already uses this technology. Fairly good results with it.
  9. FedEx courier

    FedEx courier New Member

    I've always wondered if Fred Smith ever really said "I'll shut it down", I've always pictured a meeting with him yelling at the pilots and them just laughing about it? I wonder if any of that is really true or just more fear tactic FedEx folklore to keep employees afraid.
  10. MrFedEx

    MrFedEx Engorged Member

    A bit of both. The Purple People are fond of quoting Smith as saying it, mostly as a means of instilling fear into those of limited IQ.
  11. TechGrrl

    TechGrrl Space Cadet

    You and I are in violent AGREEMENT that FredEx is smoking dope. My point was, with the many years headstart UPS has in this area, we STILL count on the driver to make it happen. So dumping the experienced couriers and expecting new hires off the street to make service is dreaming. And the FredEx brand is 'service', right?
  12. FedEX 4 Life

    FedEX 4 Life New Member

    Its his company,he can do whatever he wants.If he wants to shut it down he can.
  13. FedEx courier

    FedEx courier New Member

    You really do know how to take it like a champ don't you! HAAHA!!!!!:wink2:
  14. FedEX 4 Life

    FedEX 4 Life New Member

    My stations volume is so down its scary.Im really surprised Fred hasnt layed off.All of our guys out out on the road and there is no work.
  15. Ricochet1a

    Ricochet1a New Member

    FedEx built its brand on service. FedEx is transforming its business model from a service oriented brand to a cost oriented brand. Business does this all the time as market conditions change.

    Tangent time..

    For those of us who are really old, we can remember when Radio Shack was a retailer that catered to home amateur radio enthusiasts. It sold parts for radios and just about every little transistor and tube (those things that got hot and glowed) that one could need. It started to change its business model in the early 80's with the introduction of personal computers and by the late 80's, there was no home amateur radio "stock" in the store. The only reason they still call it Radio Shack is because that is the company name they're stuck with. FedEx is in the midst of a transformation of business operating pattern. It isn't as dramatic as this, but the FedEx that will exist 5 years from now will look nothing like the FedEx that existed just 5 or 10 years ago (from the employees standpoint).

    FedEx is getting Ground packages delivered for about $13/hr. It costs about $24/hr to get Express packages delivered with wages and benefits. It costs UPS about $35-38/hr to get packages delivered with all benefit costs. FedEx wants to narrow the cost differential between Express and Ground's labor expense. By a combination of shifting volume to Ground and having a high turnover part time Courier force, FedEx can reduce its "Express" delivery labor expense from $24/hr to about $18 (accounting for all the volume which will be delivered at $13/hr expense though Ground).

    Taking 20,000 full-time Couriers and moving them to part-time will reduce Express labor hours by about 20 million per year. Take this times the cost savings of a low experience force ($6/hr), and annual savings of about $120 million can be realized. Add in the fact that part-time employees almost never unionize and hiring trends will focus on people who want short term employment rather than a career, FedEx has saved itself probably close to [20 million hours * ($6/hr Part-time force + $6/hr non-union force)] = $240 million annually. For a company that has gross revenues in the $22 Billion range right now (Express only), that is an extra 1.1% annual profit margin - they call it "gravy".

    FedEx has just under 312 million shares outstanding. FedEx went from $6 earning per share annually two years ago, to 31 cents per share for the FY which just ended. FedEx is desperately (understandably) attempting to get EPS back up to the $6 per share level PDQ. What is the effect on EPS of all this cost savings implementing all of this ROADS stuff? $240 million annual savings divided by 312 million shares = 77 cents annual EPS.

    You may be asking yourself, "What's the point of increasing EPS by 77 cents by messing with Couriers when they need to get it up $6?" Because they can...

    This is part of what many of us have been claiming all along, this is all just chicken feed (Courier feed?) for FedEx. FedEx doesn't HAVE to do this, FedEx WANTS to do this. So much for PSP.


    Dumping the experienced Couriers IS THE INTENT the long term. Ground drivers have an average experience level of between 1 and 2 years in most locations. They are getting the job done from FedEx's viewpoint. Again, you are speaking about what is, and FedEx is moving towards what will be.

    Take a look at the link above. It is FedEx's own statement. You'll notice they don't call Express and Ground and Freight "Operating Companies", they call them "Segments". They are marketed as integrated segments of the same corporation, FedEx Corporation. You will also see the effect of the writedown that Kinkos is costing Fedex right now. This isn't actual cash flow, but accounting charge offs. They give revenue per operating divsion, but not expense, so no way to tell if Kinkos is actually profitable or not.

    When the technology is perfected - and it will be - the need for experienced, full-time, career Couriers will go out the window.

    Getting a truck organized with 200+ pieces and 80 stops takes some experience. Getting a truck organized with 80 pieces and 35 stops is a lot easier. When the 2nd and 3rd day volume is pulled, the need for high experience levels will drop dramatically.

    FedEx has made a decision to dramatically cut labor expense and eliminate a potential pool of unionization within Express, the full-time Courier. The mechanics and RTD's will eventually unionize, even under RLA. But getting 20-24,000 Full-time Couriers that are potential union members reduced to part-time status (or retire early) is the intent behind the rapid introduction of the ROADS technology.

    Some Express Couriers think that ROADS as it exists is all there will be. Check the ROADS poster Monday. In the upper right hand corner.


    It is just starting.
  16. MrFedEx

    MrFedEx Engorged Member

    Smith thinks technology can trump people. If he could train monkeys or build robots to do our jobs, he'd replace us in a flash. Most of our new hires can't even finish their routes, much less master the technology. Once again, when you're offering around $15 per hour to start, you are not getting very good employees...even in a recession.

    You could provide them with a fully routed vehicle in stop order and restrict them to one street and they'd still eff it up. These are the folks who get bailed-out every day, have Code 1's (unattempted pkgs) or are racing to the ramp so their freight doesn't miss the plane.

    I don't think Fred has ever watched "The Wizard of Oz". If he had, he'd be trying to create flying monkeys so he could eliminate the planes, pilots and people all at once.