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<blockquote data-quote="Ricochet1a" data-source="post: 1122879" data-attributes="member: 22880"><p>Way back when I was in AGFS, we had a presentation where an 'engineer' stated that the cost to Express to run a package through a sort was 25 cents. This included the labor cost to put the download can 'on line', have handlers download it, have other handlers sort, scan and stack, then to have handlers move the filled cans off the sort. This also included the cost associated with the sort facility, equipment, maintenance, etc. </p><p></p><p>So to run a 4,000 package mini-sort, cost Express $1000. Since Couriers in stations participate in station sorts (they are paid higher), I'd have to imagine that running a station sort would cost somewhere between 35 and 45 cents per package. All of this is tracked with the 'package handling' time code - which can then have the total number of pieces run through the sort divided by total labor hours (multiplied by an assumed wage rate), to get a rough figure for cost per piece (adjusted for overhead expense). This is also why there is a separate code for document sorting - so that process can be more closely monitored for labor associated with that task (pieces per hour). </p><p></p><p>So the handling expense of running a package through a sort an additional time or two is rather minimal. Express is attempting to more closely match 'service with revenue', so in the process, if it ends up incurring an additional 40 or in some cases 80 cents in handling expense, in an effort to get customers to pay extra for a higher service level, then that expense is 'justified'. </p><p></p><p>I still think this is all part of the gradual process of getting the delivery of deferred product out of Express. The customers will decide if they REALLY want overnight delivery (and if so, they'll pay for it). Otherwise, it is off to Ground for that package (whether the customer chooses or FedEx eventually commits to shifting the delivery of deferred product over to Ground will be seen). I think the gradual introduction of Ground to current Express only customers is deliberate on the part of Express. Like everything in Express, they are playing it real slow, so that neither the customers nor wage employees recognize what is happening until one day it is a done deal.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 1122879, member: 22880"] Way back when I was in AGFS, we had a presentation where an 'engineer' stated that the cost to Express to run a package through a sort was 25 cents. This included the labor cost to put the download can 'on line', have handlers download it, have other handlers sort, scan and stack, then to have handlers move the filled cans off the sort. This also included the cost associated with the sort facility, equipment, maintenance, etc. So to run a 4,000 package mini-sort, cost Express $1000. Since Couriers in stations participate in station sorts (they are paid higher), I'd have to imagine that running a station sort would cost somewhere between 35 and 45 cents per package. All of this is tracked with the 'package handling' time code - which can then have the total number of pieces run through the sort divided by total labor hours (multiplied by an assumed wage rate), to get a rough figure for cost per piece (adjusted for overhead expense). This is also why there is a separate code for document sorting - so that process can be more closely monitored for labor associated with that task (pieces per hour). So the handling expense of running a package through a sort an additional time or two is rather minimal. Express is attempting to more closely match 'service with revenue', so in the process, if it ends up incurring an additional 40 or in some cases 80 cents in handling expense, in an effort to get customers to pay extra for a higher service level, then that expense is 'justified'. I still think this is all part of the gradual process of getting the delivery of deferred product out of Express. The customers will decide if they REALLY want overnight delivery (and if so, they'll pay for it). Otherwise, it is off to Ground for that package (whether the customer chooses or FedEx eventually commits to shifting the delivery of deferred product over to Ground will be seen). I think the gradual introduction of Ground to current Express only customers is deliberate on the part of Express. Like everything in Express, they are playing it real slow, so that neither the customers nor wage employees recognize what is happening until one day it is a done deal. [/QUOTE]
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