Market levels

[59 Dano]

Amazing how you guys can't figure out that it's more expensive to send 2 drivers to every stop than it is to send 1 driver. I'm not saying FedEx should stop offering ground as a shipping option, I'm saying they could integrate their ground and express operations like UPS. The "Operate individually, compete collectively" business plan is ridiculous. Might as well say "let's double our expenses and keep our revenues the same."

Integrating the two services would result in a lower margin for each service and the assumption of an enormous amount of risk. The Ground operation, under the contractor model, is a license for FedEx to print money at a very limited expense and with a fraction of the overhead of the Express side of the business.

Anyone who thinks that it would be wiser to integrate the operations is crazy. UPS would switch its ground operation to a contractor model in a heartbeat if it could get away with it.

 

[UpstateNYUPSer(Ret)]

Respectfully disagree with your last paragraph.

 

[59 Dano]

Respectfully disagree with your last paragraph.

You know I wouldn't lie to ya, Dave! I couldn't do it to a PLBer.

 

[vantexan]

I believe you have it backwards-----profit per piece favors Express, not Ground.

Not what a senior mgr showed us with a chart. Profit per pkg at Ground is higher than Express even though Express pkgs cost a lot more. Trucking plus the lower labor costs is much more profitable than what Express does.

 

[vantexan]

Amazing how you guys can't figure out that it's more expensive to send 2 drivers to every stop than it is to send 1 driver. I'm not saying FedEx should stop offering ground as a shipping option, I'm saying they could integrate their ground and express operations like UPS. The "Operate individually, compete collectively" business plan is ridiculous. Might as well say "let's double our expenses and keep our revenues the same."

But they don't go to all the same stops. You'd have a point if both were driving half empty trucks and going to the same stops. The Ground guys have plenty to do and only go to some of the same stops. Meanwhile their costs per pkg are the lowest in the industry, leaving more in profit in spite of charging much less than Express. Which is exactly why they're growing so fast.

 

[McFeely]

But they don't go to all the same stops. You'd have a point if both were driving half empty trucks and going to the same stops.

This.

Out of my 100+ deliveries I did today, I'd be willing to bet money that the Ground guy went to maybe 5-10 max of the exact same locations as I did. He also did 100+ stops (I saw him later in the day at a common pup). So should the Ground guy now do close to 200 stops to cover our area? No, you'd have to split the area in half and still have to have 2 people run the routes, especially when commit times come into play.

 

[vantexan]

What Fred has done is to give a handful of employees a meaningful raise while simultaneously screwing the vast majority. And, yes, FedEx can afford to pay a lot more.

OK, where's the money coming from? They have a fiduciary responsibility to achieve a profit and to reward stockholders. So they're going to pay some of the profit in dividends. They're going to use some of the profit towards expanding the company. That's what those acquisitions are about. They said this new pay plan will cost them close to half a billion a year. So that leaves not a whole lot towards the UPS-like pay and benefits. Until they are very close to what UPS does they won't have the money. UPS trucks most of it's freight. FedEx may one day do the same but currently the expense of flying most Express freight will limit them from giving UPS type pay and benefits.

 

[MrFedEx]

OK, where's the money coming from? They have a fiduciary responsibility to achieve a profit and to reward stockholders. So they're going to pay some of the profit in dividends. They're going to use some of the profit towards expanding the company. That's what those acquisitions are about. They said this new pay plan will cost them close to half a billion a year. So that leaves not a whole lot towards the UPS-like pay and benefits. Until they are very close to what UPS does they won't have the money. UPS trucks most of it's freight. FedEx may one day do the same but currently the expense of flying most Express freight will limit them from giving UPS type pay and benefits.

van. Stop making excuses for them. Fred killed the pension because he could...the only reason. FedEx can certainly afford to pay us far more than what the vast majority of us (mid-range LOL) are being paid.

 

[Code 82 Approved]

OK, where's the money coming from? They have a fiduciary responsibility to achieve a profit and to reward stockholders. So they're going to pay some of the profit in dividends. They're going to use some of the profit towards expanding the company. That's what those acquisitions are about. They said this new pay plan will cost them close to half a billion a year. So that leaves not a whole lot towards the UPS-like pay and benefits. Until they are very close to what UPS does they won't have the money. UPS trucks most of it's freight. FedEx may one day do the same but currently the expense of flying most Express freight will limit them from giving UPS type pay and benefits.

Well ok, let's discuss a seldomly seen discussion of how much freight from the west coast UPS monopolizes via rail. If you have been a passenger on Amtrak in the last 5 yrs. the Amtrak has to pull off onto a spur to let freight trains go by. It happened to me from STL to Chi not that long ago. Obviously the lack of tracks, whomever Amtrak contracts with in each state or nationwide is not my expertise. However, if I order something from Monoprice, it's a UPS shipment from California and it has absolutely no tracking info until it gets to a Chicago hub.
So I'm baffled why FDX-G or FDX-friend for that matter don't utilize the same cross country mode? Load trailers on trains.

It may take 48 hours for the train to arrive to CHI, but I have read reports
http://www.nytimes.com/2012/05/08/us/chicago-train-congestion-slows-whole-country.html?_r=0
That the trains may take another 30 hours just to weave through Chicago. Wouldn't it make sense for FDX to open a rail operation depot say in KC/Rockford or the Quad Cities? Then truck the Midwest things with less miles and chances for accidents?

WTF do I know, all this is above my pay grade.

 

[vantexan]

Well ok, let's discuss a seldomly seen discussion of how much freight from the west coast UPS monopolizes via rail. If you have been a passenger on Amtrak in the last 5 yrs. the Amtrak has to pull off onto a spur to let freight trains go by. It happened to me from STL to Chi not that long ago. Obviously the lack of tracks, whomever Amtrak contracts with in each state or nationwide is not my expertise. However, if I order something from Monoprice, it's a UPS shipment from California and it has absolutely no tracking info until it gets to a Chicago hub.
So I'm baffled why FDX-G or FDX-friend for that matter don't utilize the same cross country mode? Load trailers on trains.

It may take 48 hours for the train to arrive to CHI, but I have read reports
http://www.nytimes.com/2012/05/08/us/chicago-train-congestion-slows-whole-country.html?_r=0
That the trains may take another 30 hours just to weave through Chicago. Wouldn't it make sense for FDX to open a rail operation depot say in KC/Rockford or the Quad Cities? Then truck the Midwest things with less miles and chances for accidents?

WTF do I know, all this is above my pay grade.

I'm no expert, but I'm guessing using rail might account for why some UPS freight gets there considerably later than say Express 3 day. If it's feasible I'm sure FedEx would be utilizing rail.

 

[vantexan]

van. Stop making excuses for them. Fred killed the pension because he could...the only reason. FedEx can certainly afford to pay us far more than what the vast majority of us (mid-range LOL) are being paid.

Not making excuses. I have repeatedly said that FedEx could do better by us. But UPS pay and benefits? Not possible for a mostly airfreight company. They'd have to jack rates way up which would make them uncompetitive.

 

[Schweddy]

Curious, what is paycode 1(CSA? Handlers?) 2 reg couriers? 3? Swings?

Seems that way, yeah. There used to be 15ish pay rates, right? And they were all merged into three. I do still wonder how it works for swings, premium or no?

Handlers, 1 definitely. Not sure on csa.. 2, mid level couriers, etc, 3 should be regular couriers. Swing, I would think .30 premium but I only know what I've seen here on BC.

What needs to be done is to point out to HR, and management that the calculations should have reflected the new market levels first, and then the 3% raise.

By just adding the 3% raise everybody lost 1 step.

Did you expect a 10-12% raise? The idea, afaik, is to bump to the next level .. your scenario would produce two levels. I don't disagree that'd be nice.. but I don't see it making sense. It's kind of like working OT and "double time" and expecting both.

 

[vantexan]

Seems that way, yeah. There used to be 15ish pay rates, right? And they were all merged into three.

7 merged into 5.

 

[fdxsux]

Integrating the two services would result in a lower margin for each service and the assumption of an enormous amount of risk. The Ground operation, under the contractor model, is a license for FedEx to print money at a very limited expense and with a fraction of the overhead of the Express side of the business.

Anyone who thinks that it would be wiser to integrate the operations is crazy. UPS would switch its ground operation to a contractor model in a heartbeat if it could get away with it.

Sure UPS would switch all its drivers to contractors if they could, but they would continue to deliver their air freight on the same trucks as their ground freight because it's more efficient to do so.

As far as overhead, you would reduce the number of stations, utilities, trucks, maintenance, etc. etc. Just because FedEx doesn't write the checks for the contractor's trucks, fuel, maintenance, employees, etc. doesn't mean they are not paying for them. FedEx has to pay the contractor enough to cover his expenses and make a profit.

 

[fdxsux]

This.

Out of my 100+ deliveries I did today, I'd be willing to bet money that the Ground guy went to maybe 5-10 max of the exact same locations as I did. He also did 100+ stops (I saw him later in the day at a common pup). So should the Ground guy now do close to 200 stops to cover our area? No, you'd have to split the area in half and still have to have 2 people run the routes, especially when commit times come into play.

You must not deliver to many businesses then. You must not do many pickups either. And even when we don't deliver to the exact same stops(such as residences) we are still sending 2 trucks to the same areas delivering pkgs a few houses apart, decreasing our density.

 

[dex 84]

Pricing, service, sort times and just about everything else prevents that from happening. Many stations just can't handle much more volume. I leave the building at 0735 or 0740. UPS in my area leaves at 0920 or so. Ground guys tell me they leave at 9 or later. How many p1 are you gonna get off if you only have an hour of del time. UPS and Ground are finishing their sort while I have made 10 to 15 stops. They have to wait on the trucks to get there from other cities while we are hitting the road.

They might have to open more stations to handle the volume. That won't cost nearly as much as will be saved by how many buildings they can shut down by folding ground into express.

They might have to add a day to the commit dates in certain areas for ground. Instead of waiting for the ground to arrive today we could just deliver the ground that arrived yesterday, and whatever arrives today will get delivered tomorrow. Depending on the size of the station and what time the ground arrives we could have all our ground sorted and ready to go when we punch in and all we have to sort is our air.

The stops per hour of every route across the country could be higher because they will all have tighter areas. There will be more routes though which would require a lot more employees. When the ground terminals are notified of their impending closures express applications should be handed out left and right to the ground drivers who will soon be out of work.

And for what it's worth UPS in my area is on the road at least an hour before us every day, except sometimes on Monday.

 

[vantexan]

They might have to open more stations to handle the volume. That won't cost nearly as much as will be saved by how many buildings they can shut down by folding ground into express.

They might have to add a day to the commit dates in certain areas for ground. Instead of waiting for the ground to arrive today we could just deliver the ground that arrived yesterday, and whatever arrives today will get delivered tomorrow. Depending on the size of the station and what time the ground arrives we could have all our ground sorted and ready to go when we punch in and all we have to sort is our air.

The stops per hour of every route across the country could be higher because they will all have tighter areas. There will be more routes though which would require a lot more employees. When the ground terminals are notified of their impending closures express applications should be handed out left and right to the ground drivers who will soon be out of work.

And for what it's worth UPS in my area is on the road at least an hour before us every day, except sometimes on Monday.

It'll never happen because Ground, as is, is much more profitable per pkg than Express. If it were more profitable to do everything with one opco FedEx would be doing it.

 

[UpstateNYUPSer(Ret)]

It'll never happen because Ground, as is, is much more profitable per pkg than Express. If it were more profitable to do everything with one opco FedEx would be doing it.

Please provide the data to support you profit per package claim.

I still think that you have it backwards.

 

[dex 84]

It'll never happen because Ground, as is, is much more profitable per pkg than Express. If it were more profitable to do everything with one opco FedEx would be doing it.

I don't think they'll do it voluntarily but their hand could be forced at some point in the future.

 

[vantexan]

Please provide the data to support you profit per package claim.

I still think that you have it backwards.

If Express is more profitable per pkg then why have Ground at all? We had a meeting at station in Texas in 2012 where Sr mgr put up a chart showing those numbers to explain why the company was doing what it's doing. For example, an overnight letter from a nearby city would cost a customer mid-twenties with Express but only $5 with Ground. And yet the company would make more profit on the Ground letter. The overall operating costs of flying add up to less profit at Express.