New OT Policy En Route

[yadig]

Pearl clutchers act as though this is a gold mine that FedEx is walking away from. FedEx was and probably would have continued to make money off of the deal but not enough to justify the effort.

The dwindling volume was making it less compatible for the FedEx network, namely creating too much excess capacity on the affected flights. You might say to take a smaller plane off of another route and put it on the mail route because that matches the volume to the plane, and you'd be right. But then you have to replace that smaller plane that came from another route, and you end up replacing it with a larger plane. You're simply moving the excess capacity from one flight to another.

You can ignore all of that if you want and just look at the numbers of the deal. Direct expenses of the USPS volume are around $1.5 billion annually. Most of those costs are fixed and can't be scaled down much, if at all. Our FY23 revenue from USPS was around $1.6 billion, down from previous years and the postal service says it's going to be sending less freight in the future. There are also significant savings that come from operation adjustments.

As for UPS, I don't know or care if it's a good deal for them. Depends on how well aligned the ratio of USPS volume to capacity is. Depends on how easily they can absorb that freight into their existing operations.

It sounds like you’re agreeing with me. UPS is a better managed company while FedEx is mainly focused on shareholders, cheap labor, DEI.

 

[Vin71]

Minimums for Handlers are gone. But not couriers. I have the feeling “Legacy” just means a few more years until ground has the Infrastructure to take over in your locality.

 

[Aquaman]

It sounds like you’re agreeing with me. UPS is a better managed company while FedEx is mainly focused on shareholders, cheap labor, DEI.

He knows the problem with that contract wasn’t the contract. It was FedEx. FedEx wanted guaranteed volume or payment. Something they know good and well is impossible. They made the demands so ridiculous to avoid continuing to operate a daytime operation built around the contract. Well UPS has an air operation that’s appropriately sized already. And even though their airline is much smaller than ours. They clearly see a way to adjust their operation to make that contract worth it. He can crunch the numbers all he wants, but that contract gave people jobs. And that has to matter too. It has to matter if you want to stay in business and have standards. Not saying it’s the most important thing. But it gave people jobs. And they absolutely could have adjusted the operation to boost profit.

 

[zeev]

What Drano leaves out is USPS is the biggest customer Express has , the operation is being drastically downsized.

 

[Fred's Myth]

What Drano leaves out is USPS is the biggest customer Express has , the operation is being drastically downsized.

Many similarities between this scenario, and the Amazon storyline. For years we were told that Amazon was basically a non-revenue account used to fill Fedex planes in order to make the rest of the freight more profitable. As Amazon built out its own delivery system, it dumped the unprofitable (say rural) packages on FedEx, UPS, and USPS, and used the profits to build out a system that now competes with them. FedEx finally saw the light, and restructured the freight rates it was charging Amazon, basically killing any business between them. Couriers, at least, cheered the decision, because it only made good sense, even if it was too little, too late.

So, lesson learned (?), FedEx applies this basic business 101 lesson to its largest 'customer': if doing business with them is, or will soon be, unprofitable, WHY keep their business???

And yet you criticize them!

 

[59 Dano]

It sounds like you’re agreeing with me. UPS is a better managed company while FedEx is mainly focused on shareholders, cheap labor, DEI.

You'd probably think that way.

He knows the problem with that contract wasn’t the contract. It was FedEx. FedEx wanted guaranteed volume or payment. Something they know good and well is impossible. They made the demands so ridiculous to avoid continuing to operate a daytime operation built around the contract. Well UPS has an air operation that’s appropriately sized already. And even though their airline is much smaller than ours. They clearly see a way to adjust their operation to make that contract worth it. He can crunch the numbers all he wants, but that contract gave people jobs. And that has to matter too. It has to matter if you want to stay in business and have standards. Not saying it’s the most important thing. But it gave people jobs. And they absolutely could have adjusted the operation to boost profit.

"He can crunch the numbers all he wants, but" is the admission of ignorance and the inability or unwillingness to look at something with a data driven or analytical mindset, preferring instead bland cliches that other dacha-like nonsense.

I almost feel sorry for you.

 

[Aquaman]

You'd probably think that way.

"He can crunch the numbers all he wants, but" is the admission of ignorance and the inability or unwillingness to look at something with a data driven or analytical mindset, preferring instead bland cliches that other dacha-like nonsense.

I almost feel sorry for you.

The data driven analytical mindset has really done wonders for us hasn’t it?…..

 

[zeev]

FedEx is dumping the 20 year plus USPS contract their biggest customer because they are getting out of flying planes. Amazon was more lucrative than most big contracts because of their efficiency. Picking up a trailer there you had 30 min. from the time you entered the gate to drop your trailer, grab the door trailer and exit the property,compared to other large shippers where you would spend hours on their property and FedEx would have their own employees processing the freight.

 

[59 Dano]

The data driven analytical mindset has really done wonders for us hasn’t it?…..

If the fact that they aren't making any real money on the volume isn't reason enough for them to walk away from it, I don't know what is. You think they should keep it simply for the sake of keeping it.

Wow.

 

[Just A UPS Guy]

H

Hardly see any FedEx here lately. Must mean they are out of business, right?

Nooooo!!!! They have the most trucks on the interstate BY FAR!!!!

 

[Aquaman]

If the fact that they aren't making any real money on the volume isn't reason enough for them to walk away from it, I don't know what is. You think they should keep it simply for the sake of keeping it.

Wow.

No I think they should rework the dayside operation, that only really flew postal anyway, to be better capable of adapting to shifting volume. And I only suggest that happen, because they were our biggest customer by far. I think you change whatever needs to be changed for that. Because the loss of it triggers massive change anyway. Change that produces zero packages moving through the network. I stand by my claim that doing all that work to keep planes of postal in the air, just wasn’t worth it to a company that’s shifting away from the massive airline model. If you’re going to sit here and pretend that FedEx couldn’t boost profit through operational changes, your full of it. But those aren’t the kind of “operational changes” they’re interested in making. They’re interested in laying people off….

 

[10-27]

Minimums for Handlers are gone. But not couriers. I have the feeling “Legacy” just means a few more years until ground has the Infrastructure to take over in your locality.

Although my manager is usually a complete imbecile, he also said "Legacy" was used because they're not sure what to do with our station as of now, as we are too far from a ground station to be absorbed, but too small to convert totally to ground. But, will eventually be done with,no later than 2027, one way or another.

 

[FedupExpress]

Although my manager is usually a complete imbecile, he also said "Legacy" was used because they're not sure what to do with our station as of now, as we are too far from a ground station to be absorbed, but too small to convert totally to ground. But, will eventually be done with,no later than 2027, one way or another.

Intermittent sounds more sensible than legacy lol

 

[Vin71]

Although my manager is usually a complete imbecile, he also said "Legacy" was used because they're not sure what to do with our station as of now, as we are too far from a ground station to be absorbed, but too small to convert totally to ground. But, will eventually be done with,no later than 2027, one way or another.

How sure are you on the 2027 prognosis?

 

[Nolimitz]

 

[FedupExpress]

How sure are you on the 2027 prognosis?

Pretty good estimate with agenda 2030 and all.

 

[Fred's Myth]

Although my manager is usually a complete imbecile, he also said "Legacy" was used because they're not sure what to do with our station as of now, as we are too far from a ground station to be absorbed, but too small to convert totally to ground. But, will eventually be done with,no later than 2027, one way or another.

And we all know that, historically, FedEx management turns all major changes into a Charlie Foxtrot, because they’re unable to create a plan and follow through successfully.

 

[59 Dano]

No I think they should rework the dayside operation, that only really flew postal anyway, to be better capable of adapting to shifting volume. And I only suggest that happen, because they were our biggest customer by far. I think you change whatever needs to be changed for that. Because the loss of it triggers massive change anyway. Change that produces zero packages moving through the network. I stand by my claim that doing all that work to keep planes of postal in the air, just wasn’t worth it to a company that’s shifting away from the massive airline model. If you’re going to sit here and pretend that FedEx couldn’t boost profit through operational changes, your full of it. But those aren’t the kind of “operational changes” they’re interested in making. They’re interested in laying people off….

If you think that there was some magic reworking that was going to make the postal volume worthwhile for the long term, you don't know what you're talking about.

 

[Aquaman]

If you think that there was some magic reworking that was going to make the postal volume worthwhile for the long term, you don't know what you're talking about.

So there’s nothing that could’ve been done to make it work…. Got it. Just say it dude. They want fewer planes in the air. They want fewer RTD’s trucking postal around. They want fewer Ramp Agents & material handlers balancing & loading postal flights. They simply didn’t want to keep that going, so they threw out demands they knew the post office couldn’t agree to.

 

[Vin71]

Pretty good estimate with agenda 2030 and all.

Please enlighten me. As in fully transitioned no late than 2030?