Is Ground really getting E2 and XS?

vantexan

Well-Known Member
"Is UPS offering next day service in a regional zone with a letter rate of $5?" - Some Amazon's yes, but by far no.

"list of prices for a 2 lb pkg going by UPS, FedEx Express, and FedEx Ground and Ground was much cheaper" - UPS Ground and Fedex ground will be identical everytime and Express will be a lot more.

"I guess if they are charging the same rates as UPS Ground then UPS has nothing to worry about" - I do see the logic in that. But it doesn't explain the whole story or tendencies. But your point is if UPS Ground and Fedex Ground were very near equal, why would a shipper pick a 2nd rate operating company vs UPS? Well they do, even when it is close to even. Now not all and not even most are choosing Fedex Ground, as one can see UPS Ground is something like 10x the size of Fedex Ground. But there are customers that were burned in their view by UPS on something, think claims. There are many others that look at the delivery success metrics and see Fedex Ground is comparable even with contractors vs Union. Some of it has to do with Union, that works both ways, Fedex Ground won't get some business because they aren't Union. UPS is more flexible with pickup times simply because they have more boots on the ground to do so. Many companies today do this "UPS GROUND" - "FEDEX AIR", using the perceived leaders in both segments. I get that to.

But the best overall bottom line I can give you is Fedex Ground Service is with all it has against it... still comparable in getting a package from A to B vs UPS.

But UPS or Fedex at any time could be cheaper than the other, there is no "it's a given Fedex Ground is cheaper than UPS" if it were Fedex Ground would be growing even faster, perhaps that is why they are expanding as fast as they can, so they can do that someday. Because one is right with their models, Fedex Ground should be able to under cut UPS, capacity must be the issue and if Fedex Ground is near full now, why cut your price, right? Now one can say USPS is cheaper than either Fedex or UPS, that is true.

I still feel the regional carrier is the segment that can upset the two majors and they have the contractor model and lower overhead in management, by far. The more warehouses large companies place, the more regional carriers play a part and that is happening.

Is there a regional carrier providing excellent, dependable service? Not long ago someone mentioned a company on the West Coast as an example of a threat to FedEx. Can't remember their name but at the time I Googled them and found alot of complaints about service. Yes, we all get complaints but not like that.

My point above isn't why would someone pick Ground over UPS, it's why is UPS worried about FedEx Ground if their prices are essentially the same? It's the 800 lb gorilla in the room that Ground has much lower operating costs and thus can offer lower prices. If they don't have the capacity now they must be close, otherwise FedEx wouldn't have put on the big show last October. If they are charging the same prices don't expect that to last. It's why big volume shippers will switch to Ground even if they are only saving a dollar a pkg. It adds up.
 

bbsam

Moderator
Staff member
I am actually hoping regional carriers make a run and that they utilize contractors. I think I could find a way in there and make it mutually beneficial.
 

TUT

Well-Known Member
You say fear and paranoia, we say just stating the obvious.

Yes ground is growing and express is shrinking, but it has nothing to do with Fedex's ploy. It's because of consumer choice. That to me is all the difference in terms of how and why. Now the net result to the driver maybe the same.
 

vantexan

Well-Known Member
Yes ground is growing and express is shrinking, but it has nothing to do with Fedex's ploy. It's because of consumer choice. That to me is all the difference in terms of how and why. Now the net result to the driver maybe the same.

The ploy is getting us to work for them with false promises.
 

bbsam

Moderator
Staff member
Yes ground is growing and express is shrinking, but it has nothing to do with Fedex's ploy. It's because of consumer choice. That to me is all the difference in terms of how and why. Now the net result to the driver maybe the same.
but it's a contrived choice. Delivery in 2 days at $x by Express or in 2 days at $(x-35%). Duh. What's a business to do?
 

MAKAVELI

Well-Known Member
You say fear and paranoia, we say just stating the obvious.

Yes ground is growing and express is shrinking, but it has nothing to do with Fedex's ploy. It's because of consumer choice. That to me is all the difference in terms of how and why. Now the net result to the driver maybe the same.

And that is exactly what they want you, the customer, to believe. But the people on the inside know how FedEx works. FedEx is all about image. They spend an immense amount of money to build that image and will do anything to keep it. Do you really think our sales is going to let you , the customer, know how this company really works and all its plans? They will only tell you what they want you to know. If you think otherwise, you are fooling yourself.
 

Cactus

Just telling it like it is
Fedex can and does offer better rates when they want to. We aren't in the business of "buying" customers. If we can't make a profit, we aren't doing it.

Then you do not know express as well as you think you do.

Our sales staff will spend $100 to make $10.
 

bbsam

Moderator
Staff member
Then you do not know express as well as you think you do.

Our sales staff will spend $100 to make $10.
if they are settling for $10 in Express it is because they are clearing $400 in Ground. You did know we have the same sales force, didn't you? I think you just hate that I am right.
 

vantexan

Well-Known Member
if they are settling for $10 in Express it is because they are clearing $400 in Ground. You did know we have the same sales force, didn't you? I think you just hate that I am right.

WHAT?? Sales is promoting Ground over Express? No way! Just ask Toot!
 

TUT

Well-Known Member
And that is exactly what they want you, the customer, to believe. But the people on the inside know how FedEx works. FedEx is all about image. They spend an immense amount of money to build that image and will do anything to keep it. Do you really think our sales is going to let you , the customer, know how this company really works and all its plans? They will only tell you what they want you to know. If you think otherwise, you are fooling yourself.

Well in the sales end it does go beyond simply customer/vendor on into family/friends, but if it weren't even that, we not idiots on our end, again this isn't rocket surgery.The prices are what they are based on costs, I get to pick the service I want for my reasons, not yours, not what Fred S wants, not what sales wants. Your competitor has the same pricing structure for their services, so it's not some false pricing from Fedex Air. Is this not clear? Some are stating Fedex is setting up Express to fail, I say their prices of all services are competitive to the competition, the shipper is picking the service that works for them, nothing new, no scheme. My guess is if UPS union workers had to rely on their Air service, things wouldn't be looking so well over there. The good news for them is they were built on ground, which isn't being threatened because that is where the demand is today.
 

vantexan

Well-Known Member
Well in the sales end it does go beyond simply customer/vendor on into family/friends, but if it weren't even that, we not idiots on our end, again this isn't rocket surgery.The prices are what they are based on costs, I get to pick the service I want for my reasons, not yours, not what Fred S wants, not what sales wants. Your competitor has the same pricing structure for their services, so it's not some false pricing from Fedex Air. Is this not clear? Some are stating Fedex is setting up Express to fail, I say their prices of all services are competitive to the competition, the shipper is picking the service that works for them, nothing new, no scheme. My guess is if UPS union workers had to rely on their Air service, things wouldn't be looking so well over there. The good news for them is they were built on ground, which isn't being threatened because that is where the demand is today.

First off Sales isn't holding a gun to shippers' heads. They're just presenting the advantages and cost savings of Ground over other companies. If they aren't doing that with you have you considered you aren't a big enough fish to draw their interest?
 

MAKAVELI

Well-Known Member
And that is exactly what they want you, the customer, to believe. But the people on the inside know how FedEx works. FedEx is all about image. They spend an immense amount of money to build that image and will do anything to keep it. Do you really think our sales is going to let you , the customer, know how this company really works and all its plans? They will only tell you what they want you to know. If you think otherwise, you are fooling yourself.

Well in the sales end it does go beyond simply customer/vendor on into family/friends, but if it weren't even that, we not idiots on our end, again this isn't rocket surgery.The prices are what they are based on costs, I get to pick the service I want for my reasons, not yours, not what Fred S wants, not what sales wants. Your competitor has the same pricing structure for their services, so it's not some false pricing from Fedex Air. Is this not clear? Some are stating Fedex is setting up Express to fail, I say their prices of all services are competitive to the competition, the shipper is picking the service that works for them, nothing new, no scheme. My guess is if UPS union workers had to rely on their Air service, things wouldn't be looking so well over there. The good news for them is they were built on ground, which isn't being threatened because that is where the demand is today.

But it is what Smith wants. So you are selecting the service he wants without you even thinking that's what he wants. A little reverse psychology.FedEx makes more pure profit per pkg with Ground than Express. That is fact. And it is only due to the contractor model which UPS doesn't have. So you really should be asking your family/ friends why FedEx Ground rates are the same as UPS when their cost structure is significantly less.
 

vantexan

Well-Known Member
But it is what Smith wants. So you are selecting the service he wants without you even thinking that's what he wants. A little reverse psychology.FedEx makes more pure profit per pkg with Ground than Express. That is fact. And it is only due to the contractor model which UPS doesn't have. So you really should be asking your family/ friends why FedEx Ground rates are the same as UPS when their cost structure is significantly less.

Also their cost structure gives them leeway to go into major shippers and cut them good deals. So they make excellent profits charging as much as UPS for some shippers, and still make plenty with the volume of larger shippers.
 

TUT

Well-Known Member
But it is what Smith wants. So you are selecting the service he wants without you even thinking that's what he wants. A little reverse psychology.

LOL, I'm starting to think they are putting something in the water at Express stations. It's Time and Cost analysis on the shippers end. If that is what Fred wants then great, but it doesn't affect me at all what he wants. These are common services. What they make on profit is again of no worry of mine... Remember this all goes back to the notion that Sales is being directed to sell Ground over Express. I haven't changed my stance, Sales listens to what I want, will clarify things I may not know, may give suggestions what could work best for me (sometimes ground, sometimes air), but I will understand those and then make a choice. Their pitch is similar to UPS's and they also don't have this secret handshake to sway me over to ground. They'll gladly and evenly take anything one gives them, it's not easy to close new business.
 
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