Should It Come As A Surprise?

[bbsam]

They are still the fastest depreciating piece of equipment known to the US economy. Most are smelter bait in 3 years. And recently I was informed that Fats and Raj want nothing older than 2014 in the Ground fleet due to movement toward vehicles with fewer emissions. Sure you might be able to extend the life for awhile by repowering steps but panels and cutaways are too light and sure you could throw new engines and transmissions in those but you still have a $2500 truck no matter how much money you throw at them.

Sure you might be able to unload those old rags onto some starry eyed new contractor who doesn't know what he's getting into for more money that their condition warrants but smart contractors with good eyes on mechanical condition will more often than not only pay "take it off your hands" prices.

80% of my fleet is 2016 and newer.

I do have a badass 2011 Freightliner and a ver solid 2003 international.

Honestly, the newer stuff is somewhat cheaply built.

 

[bacha29]

The whole root of the problem they’ve got themselves into is Smith’s long standing and deep seated hatred of unions since he is probably one of the biggest control freaks alive. Fat Freddy has gone about keeping the union out with the RLA and contractors and the cost of it all is obscene and it looks like it’s all coming unraveled quickly nowadays. The clover field is drying up and no matter what these idiots in Memphis decide to about it, it’s gonna be a show one way or another.

All it will take is for 2 of the 5 largest institutional investors to linkup and launch a proxy fight for control of the board. Perhaps they might decide that doing a Kellogg will unlock shareholder value by breaking up the company .

 

[bacha29]

80% of my fleet is 2016 and newer.

I do have a badass 2011 Freightliner and a ver solid 2003 international.

Honestly, the newer stuff is somewhat cheaply built.

According to what you said you were going to be done and gone by 7-1.

 

[bbsam]

According to what you said you were going to be done and gone by 7-1.

Hoping. Although…funny things happen.

 

[bacha29]

Hoping. Although…funny things happen.

Indeed. selling is one thing.....Getting the money out of them is something entirely different....Especially now that lugging boxes for Fats and Raj is in no way shape or form the sure bet it once was.

 

[MAKAVELI]

Raj is in the hot seat. Which is it going to be Raj? Contractor conundrum or profitable and stable all employee model?

FedEx Faces Big Changes as Its New Boss Confronts Higher Costs, Angry Drivers - BNN Bloomberg

(Bloomberg) -- FedEx Corp.’s new chief executive officer, Raj Subramaniam, had plenty to contend with when he took over from package-delivery legend Fred S this month. Now he’ll have to roll out his growth strategy to a board that includes not only Smith, but new faces from an activist hedge...

www.bnnbloomberg.ca

 

[bacha29]

Raj is in the hot seat. Which is it going to be Raj? Contractor conundrum or profitable and stable all employee model?

FedEx Faces Big Changes as Its New Boss Confronts Higher Costs, Angry Drivers - BNN Bloomberg

(Bloomberg) -- FedEx Corp.’s new chief executive officer, Raj Subramaniam, had plenty to contend with when he took over from package-delivery legend Fred S this month. Now he’ll have to roll out his growth strategy to a board that includes not only Smith, but new faces from an activist hedge...

www.bnnbloomberg.ca

Easy to see what's in store for contractors . More production, more stops and more boxes to be done in a day.....but just exactly who's going to do it and for how little does Raj think they'll do it for? Perhaps Raj still thinks he's in India. A country with no national minimum wage. The individual states set the wage which runs from the US equivalent of $2.43 to $6.35....PER DAY. And if he believes that both the only pathway to success and the only measure of success is people being worked to death for scraps and peanuts and treated in a manner very similar to India's Shudras then years of instability and conflict are in the offing. And Ground contractors stand a good chance of becoming Ground Zero.

 

[Mutineer]

Easy to see what's in store for contractors . More production, more stops and more boxes to be done in a day.....but just exactly who's going to do it and for how little does Raj think they'll do it for? Perhaps Raj still thinks he's in India. A country with no national minimum wage. The individual states set the wage which runs from the US equivalent of $2.43 to $6.35....PER DAY. And if he believes that both the only pathway to success and the only measure of success is people being worked to death for scraps and peanuts and treated in a manner very similar to India's Shudras then years of instability and conflict are in the offing. And Ground contractors stand a good chance of becoming Ground Zero.

Although well-worn, you bring up a good point.

The usual problem of "nobody" wanting to do a crap job.

The skilled working-class got the shaft because over the past four decades, much of our manufacturing has gone to other countries.
Stinging from this, the mantra became "if you don't go to college, you'll be a ditch-digging loser."

The result was that many people went to college so they wouldn't become ditch-digging losers.

Then the educated college types got the shaft when very many of their cushy, high paying tech jobs were sent to other countries, and/or they were replaced by immigrants with work visas.

I can only see two possible solutions to FedEx's problem, and robotics are too far off for this.

Significantly raise the pay for employees and contractors. By doing that, FedEx will be admitting to everybody involved that they were wrong and stupid. This also gives their current contractors a tiny shred of power.

Or bribe some politicians and have them declare a "transportation emergency" or other such nonsense, to enable the importation of transportation work visas and emergency waivers cuz there's a "labor shortage, we can't find any qualified labor, and Americans are on drugs and don't want to work."

They've been itching to pull a stunt like that for years.

 

[yadig]

Won't happen.

I hope you are right. What makes you think it won’t happen? Express has been slowly funneling packages to ground for several years now.

 

[fedx]

Although well-worn, you bring up a good point.

The usual problem of "nobody" wanting to do a crap job.

The skilled working-class got the shaft because over the past four decades, much of our manufacturing has gone to other countries.
Stinging from this, the mantra became "if you don't go to college, you'll be a ditch-digging loser."

The result was that many people went to college so they wouldn't become ditch-digging losers.

Then the educated college types got the shaft when very many of their cushy, high paying tech jobs were sent to other countries, and/or they were replaced by immigrants with work visas.

I can only see two possible solutions to FedEx's problem, and robotics are too far off for this.

Significantly raise the pay for employees and contractors. By doing that, FedEx will be admitting to everybody involved that they were wrong and stupid. This also gives their current contractors a tiny shred of power.

Or bribe some politicians and have them declare a "transportation emergency" or other such nonsense, to enable the importation of transportation work visas and emergency waivers cuz there's a "labor shortage, we can't find any qualified labor, and Americans are on drugs and don't want to work."

They've been itching to pull a stunt like that for years.

You're right in your assessment. FedEx needs to do what you suggest-a big pay increase to entice people to work there. Also merge Ground and Express into Express and become like UPS. However, we are talking about FedEx. I'm afraid they will go with the contractor model in the end, to save a buck today, but lose a ton of money in the future. We'll first hear about this new merger and contractor model on the news. Then when you come to work the next day we'll be told how our jobs are being shifted over to Ground and the contractor will be your new employer. All to "keep FedEx competitive in this job landscape." And that will be the beginning of the end of FedEx as not enough people will want to work a back breaking job for a contractor making fast food wages (like Express) and no benefits at all. Then it will be on the news how FedEx's stock is sinking due to not making service levels and eventually they'll be bought out by a Wall Street hedge fund. Eventually FedEx will become like how DHL is in the US. DHL used to be a competitor, but now they are nothing.

 

[Mutineer]

Then when you come to work the next day we'll be told how our jobs are being shifted over to Ground and the contractor will be your new employer.

On that day, I will be waiting at my local Express terminal. I will be in a lawn chair with a big bucket of movie theater popcorn and a beverage.

If/when the horde of neck-tattooed, mouth-breathing lobotomites from Ground come to occupy Express it will be a magnificent day of disbelief and panic.

 

[yadig]

I can’t wait for the ground/express merge! It’s gonna be wonderful! The company is gonna do the right thing by us employees, it’s long overdue. I bet we’ll get brand new vending machines in the break rooms. We may even get popcorn machines and of course new big screen tv’s for propaganda. I can’t wait to shred this purple uniform for my overalls and cut off shirts. I’m sure the contractors have our best interest in mind and be competitive with ups! Way to go Raj! Watch profits/stocks soar!

 

[bacha29]

On that day, I will be waiting at my local Express terminal. I will be in a lawn chair with a big bucket of movie theater popcorn and a beverage.

If/when the horde of neck-tattooed, mouth-breathing lobotomites from Ground come to occupy Express it will be a magnificent day of disbelief and panic.

The serious limitations of the contractor model have been clearly demonstrated to the FDX board and executives. Yet, based on what he's saying it would appear that Fats and Raj have plans to place even more demands on cash starved and manpower short contractors. Now do they think they know how to fix the thing or are they convinced that the model is on sold footing despite numerous service failures in recent years?

 

[yadig]

The serious limitations of the contractor model have been clearly demonstrated to the FDX board and executives. Yet, based on what he's saying it would appear that Fats and Raj have plans to place even more demands on cash starved and manpower short contractors. Now do they think they know how to fix the thing or are they convinced that the model is on sold footing despite numerous service failures in recent years?

It’s failing at both express and ground.

 

[Mutineer]

The serious limitations of the contractor model have been clearly demonstrated to the FDX board and executives. Yet, based on what he's saying it would appear that Fats and Raj have plans to place even more demands on cash starved and manpower short contractors. Now do they think they know how to fix the thing or are they convinced that the model is on sold footing despite numerous service failures in recent years?

I think that if FedEx begins to pay it's people enough to stay around, many of these problems would vaporize.

But FedEx doesn't want to do that.

Much like tech companies and corporate farms have done, it would not surprise me if FedEx will bribe politicians in order to import their workers. One visa at a time.

 

[bacha29]

I think that if FedEx begins to pay it's people enough to stay around, many of these problems would vaporize.

But FedEx doesn't want to do that.

Much like tech companies and corporate farms have done, it would not surprise me if FedEx will bribe politicians in order to import their workers. One visa at a time.

The primary role of contractors was to provide low cost "purchased transportation" and to serve as a firewall against the incursion of a union represented workforce. Now not only do they have to do that but in addition to that they have to provide express level service make those express level service times and do it at a much lower overall cost to FDX.

Why in the hell would anybody even be willing to try? Especially now when the worst kept secret in the world one that even IWBF now admits to is that it's impossible to make any money at it.

 

[Mutineer]

The primary role of contractors was to provide low cost "purchased transportation" and to serve as a firewall against the incursion of a union represented workforce. Now not only do they have to do that but in addition to that they have to provide express level service make those express level service times and do it at a much lower overall cost to FDX.

I don't think that's an impossible problem to solve. The solution is to pay people enough money to do it. And maybe not treat those people like so much crap. So much. All the time.

Why in the hell would anybody even be willing to try? Especially now when the worst kept secret in the world one that even IWBF now admits to is that it's impossible to make any money at it.

Apply that logic as to why in the hell would anybody try alcohol, tobacco, and drugs?

 

[bacha29]

I don't think that's an impossible problem to solve. The solution is to pay people enough money to do it. And maybe not treat those people like so much crap. So much. All the time.

Apply that logic as to why in the hell would anybody try alcohol, tobacco, and drugs?

With zero workplace rights your hope that the daily work experience of those employed by both company and contractor will improve in the coming days is something that is pretty unlikely to happen because there is currently zero pressure on Fats and Raj to make those improvements. And based on what their saying it would appear that the daily work experience is likely to get a whole lot worse before it gets a whole lot better.

Sure, there's a somewhat higher chance that you'll see more boxes left on the belt and more contractor trucks loaded end to end and floor to roof still sitting in the shed at noon because there's nobody to haul them out but as long as Fats and Raj can continue to get enough unsuspecting slugs to believe their lies there will never be a need for them to change their ways.

 

[bbsam]

With zero workplace rights your hope that the daily work experience of those employed by both company and contractor will improve in the coming days is something that is pretty unlikely to happen because there is currently zero pressure on Fats and Raj to make those improvements. And based on what their saying it would appear that the daily work experience is likely to get a whole lot worse before it gets a whole lot better.

Sure, there's a somewhat higher chance that you'll see more boxes left on the belt and more contractor trucks loaded end to end and floor to roof still sitting in the shed at noon because there's nobody to haul them out but as long as Fats and Raj can continue to get enough unsuspecting slugs to believe their lies there will never be a need for them to change their ways.

I disagree. There is a lot of pressure on them. Drivers will quit. Contractors will shut down routes. It’s already happening and they don’t have enough contingency to cover it.

“When the many no longer fear the few….” That’s where we are.

 

[bbsam]

Oh. And they’re trying to plan for peak. What happens to the stock price with an epically disastrous peak?