Should It Come As A Surprise?

[fedx]

The Express/Ground merger may be all this company has left. UPS has proven its the more profitable model. I have no idea how they’d pull it off. But sacrificing the RLA exemption for ALL express drivers might be worth it. Odds are we aren’t organized enough to unionize anyway lol. Even if we did…. UPS has proven that a union can be survived. And they still make more profit than us. If I was a major shareholder I’d be fighting for a merge. This separation of the company can’t turn profit like UPS. It’s never going to. And that’s obviously the benchmark, as it should be.

I remember when I started a few years back, a "mentor" of mine (I think he could have been Mr. FedEx, but not certain-because he kept talking to me about Mr. FedEx and then left the company the same time MFE says he left) talked about how someday FedEx Express/Ground would merge to be like UPS where ground and air packages are on the same vehicle. Turns out it's looking like he was right all those years ago. That would explain why Express and Ground stations are starting to be in the same building. Now Express is pulling their "last mile optimization" trick to keep their RLA protection, but eventually their charade is going to be called. So I'm guessing 1 of 2 things is going to happen. Either: 1. Ground's contractor model will be eliminated and Ground will become company owned and ran and we'll be like UPS and the company will eventually unionize. Or 2. The Ground contractor model will become the FedEx model and both units will be combined and ran by contractors eliminating nearly all company employee jobs. If the company wants to survive long term, they'll go with the company owned model, but knowing how cheap the company is, I'm betting they'll go with the contractor model just to save a buck in the short term. No offense to Ground, but they already have a bad reputation for late deliveries, bad behavior, dress codes, etc. Either way, the company will become just 'FedEx' with no Ground or Express after it.

 

[It will be fine]

I remember when I started a few years back, a "mentor" of mine (I think he could have been Mr. FedEx, but not certain-because he kept talking to me about Mr. FedEx and then left the company the same time MFE says he left) talked about how someday FedEx Express/Ground would merge to be like UPS where ground and air packages are on the same vehicle. Turns out it's looking like he was right all those years ago. That would explain why Express and Ground stations are starting to be in the same building. Now Express is pulling their "last mile optimization" trick to keep their RLA protection, but eventually their charade is going to be called. So I'm guessing 1 of 2 things is going to happen. Either: 1. Ground's contractor model will be eliminated and Ground will become company owned and ran and we'll be like UPS and the company will eventually unionize. Or 2. The Ground contractor model will become the FedEx model and both units will be combined and ran by contractors eliminating nearly all company employee jobs. If the company wants to survive long term, they'll go with the company owned model, but knowing how cheap the company is, I'm betting they'll go with the contractor model just to save a buck in the short term. No offense to Ground, but they already have a bad reputation for late deliveries, bad behavior, dress codes, etc. Either way, the company will become just 'FedEx' with no Ground or Express after it.

I haven’t seen an Express branded truck in my neighborhood for a few years now. They seem to only run in rentals. Ground delivers more than triple the volume of Express domestically. I don’t think FedEx would take the hit of replacing the 100,000 Ground trucks if they don’t even keep a fleet for their own volume.

 

[bacha29]

I haven’t seen an Express branded truck in my neighborhood for a few years now. They seem to only run in rentals. Ground delivers more than triple the volume of Express domestically. I don’t think FedEx would take the hit of replacing the 100,000 Ground trucks if they don’t even keep a fleet for their own volume.

I don't think that there's any question that they would like to farm everything out to contractors but the recent performance and turnover of contractors no doubt has created a great deal of doubt and misgiving among executives and management. If you the prestigious company can't get anybody to work for nothing....what makes you think that lowly contractors would be anymore successful ?

 

[It will be fine]

I don't think that there's any question that they would like to farm everything out to contractors but the recent performance and turnover of contractors no doubt has created a great deal of doubt and misgiving among executives and management. If you the prestigious company can't get anybody to work for nothing....what makes you think that lowly contractors would be anymore successful ?

Corporate has shown no indication that they care about contractors walking out on contracts. They’ve actually done the opposite and communicated repeatedly that contractors are well compensated and there won’t be adjustments to rates to remain competitive. Despite evidence to the contrary they believe everything is just dandy with their contractors.

 

[bacha29]

Corporate has shown no indication that they care about contractors walking out on contracts. They’ve actually done the opposite and communicated repeatedly that contractors are well compensated and there won’t be adjustments to rates to remain competitive. Despite evidence to the contrary they believe everything is just dandy with their contractors.

You're definitely singing a different tune than you were 2-3 years ago. It's all simply a question of how little you'll work for and how little you can get somebody else to work for. And in accordance with your own admission Fat Raj is determined to find that level and right now he thinks there's quite a ways to go in the downward direction until they get there. They simply set a trap and now have an adequate supply of little contractor mice caught in it.

 

[yadig]

I don’t think they know what they’re gonna do

 

[bacha29]

I don’t think they know what they’re gonna do

And I think they know that whatever direction there would be significant risks involved. Therefore they'll likely just crawl along until something big happens that forces them to do something.

 

[MassWineGuy]

Will this development affect Express? Or mostly Ground?

 

[Cactus]

Will this development affect Express? Or mostly Ground?

Hopefully it affects corporate more than anything else to the point where they can’t sit down without a lot of discomfort.

 

[!Retired!]

The Express/Ground merger may be all this company has left. UPS has proven its the more profitable model. I have no idea how they’d pull it off. But sacrificing the RLA exemption for ALL express drivers might be worth it. Odds are we aren’t organized enough to unionize anyway lol. Even if we did…. UPS has proven that a union can be survived. And they still make more profit than us. If I was a major shareholder I’d be fighting for a merge. This separation of the company can’t turn profit like UPS. It’s never going to. And that’s obviously the benchmark, as it should be.

FedEx grounds operating margin is 11.9% (Q4 '21). Express was 4.7% (Q4 '21). Trucking packages is much more cost effective than flying them. Ground and Express can't simply merge. The entire business model would need to change.

In addition nobody seems to know for sure how many shares his holding company owns or if there are any old family trusts out there holding a stake.

You're good (sic) at doing research. If any of those entities holds any large amounts, it should be easy enough to find.

Ground delivers more than triple the volume of Express domestically.

Double check your numbers.

 

[Mutineer]

Corporate has shown no indication that they care about contractors walking out on contracts.

They can't "care." Because to do so would be an affirmation that contractors have power.

 

[Mutineer]

You're definitely singing a different tune than you were 2-3 years ago.

And there's no doubt that gives you a feeling rivaling an orgasm.

That's OK though. Everyone's got a kink.

 

[Fred's Myth]

I haven’t seen an Express branded truck in my neighborhood for a few years now. They seem to only run in rentals. Ground delivers more than triple the volume of Express domestically. I don’t think FedEx would take the hit of replacing the 100,000 Ground trucks if they don’t even keep a fleet for their own volume.

FedEx Ground 12 million packages/day, FedEx Express 6.6 million/day.

Your math is erroneous.

 

[bbsam]

And there's no doubt that gives you a feeling rivaling an orgasm.

That's OK though. Everyone's got a kink.

Eeeeeeewwwwww

 

[fedx]

FedEx grounds operating margin is 11.9% (Q4 '21). Express was 4.7% (Q4 '21). Trucking packages is much more cost effective than flying them. Ground and Express can't simply merge. The entire business model would need to change.

You're good (sic) at doing research. If any of those entities holds any large amounts, it should be easy enough to find.

Double check your numbers.

UPS' margins went from 9% a couple of years ago to now almost 14% (13.7). That's all while being company owned and union employees. That should be the model FedEx tries to copy. But I'm betting they'll do the contractor model with the "new and improved FedEx" (that's what they'll call the change) even though that contractor model doesn't work as intended. They think by not paying any benefits or 401K/pension will save them tons of money. But not getting anyone to work for a contractor because of their lack of benefits will end up being the death nail in FedEx and we will go away over a period of a few years. Why bust your ass sweating all day for a contractor for $15/hr and no benefits when you can work in an air conditioned fast food restaurant for the same pay?

 

[It will be fine]

FedEx Ground 12 million packages/day, FedEx Express 6.6 million/day.

Your math is erroneous.

Domestically Express delivers 2.8 million. Your number is total worldwide.

 

[Mutineer]

No offense to Ground, but they already have a bad reputation for late deliveries, bad behavior, dress codes, etc. Either way, the company will become just 'FedEx' with no Ground or Express after it.

This is all true. But you are overlooking the entertainment value. Like watching a delivery industry version of The Bad News Bears. Except without any winning.

talked about how someday FedEx Express/Ground would merge to be like UPS where ground and air packages are on the same vehicle. Turns out it's looking like he was right all those years ago.

Over the years the Ground terminals got bigger, and the Express ones stayed the same. For any victim who spent enough time in the capricious realm of Fat Freddy's Funhouse, this notion was never much of a stretch.

 

[bacha29]

FedEx grounds operating margin is 11.9% (Q4 '21). Express was 4.7% (Q4 '21). Trucking packages is much more cost effective than flying them. Ground and Express can't simply merge. The entire business model would need to change.

You're good (sic) at doing research. If any of those entities holds any large amounts, it should be easy enough to find.

Double check your numbers.

To answer your question Fat Freddy (5.90%) and his holding company (1.60%) combine to be the largest shareholder. Vanguard (6.87%) is the second largest shareholder . The interesting part is that the company is 70% institutionally owned which means that all it would take is for a couple of larger institutional investors to launch a shareholder proxy fight. It's an area to keep watch over because there is where you might see some action.

 

[Fred's Myth]

I haven’t seen an Express branded truck in my neighborhood for a few years now. They seem to only run in rentals. Ground delivers more than triple the volume of Express domestically. I don’t think FedEx would take the hit of replacing the 100,000 Ground trucks if they don’t even keep a fleet for their own volume.

His last day on the job.

 

[El Morado Diablo]

His last day on the job.

Good for him.
People at my station are talking about new job ride-alongs right in front of our manager's face. There is no such thing as job loyalty when FedEx is more concerned about raising wages and lying to new hires than they are about trying to keep the people they already have.