So How’s Peak Going, So Far?

[59 Dano]

Last week I was down 26% in stop count from the same week last year. Dano thinks that’s a sign of strength in the network. My complete lack of hiring for peak and ability to handle the volume is a good thing in his mind. Whistling past the graveyard comes to mind.

I never said it was a sign of strength, I said the predictions that Boy Wonder made about the network not being able to handle peak were ridiculous considering that FedEx was predicting a softer peak (as was UPS).

You were whining about the network not being able to handle the volume, now you're whining about the network being able to handle the volume. Whatever fits the moment, I guess.

 

[bbsam]

FedEx was predicting a lighter peak as Boy Wonder was feeding you his nonsense about the infrastructure being on the brink of collapse. It wasn't a surprise.

FedEx spent a ton in contingency this peak. They didn’t steady the ship. They lucked out of disaster.

And in our district, the predictions for volume were all over the place. They were up, then down, then up again.

But keep tuned in. There’s a company wide push to get away from contingency by forcing work on other contractors. They will hasten the demise of still floundering contractors, erode the morale of most of the rest and face flat out noncompliance from about 10%.

But you go ahead and push more money into stock options if you’re sure that Raj can handle this.

 

[It will be fine]

I never said it was a sign of strength, I said the predictions that Boy Wonder made about the network not being able to handle peak were ridiculous considering that FedEx was predicting a softer peak (as was UPS).

You were whining about the network not being able to handle the volume, now you're whining about the network being able to handle the volume. Whatever fits the moment, I guess.

Shippers fled the network. They had no faith in FedEx’ ability to deliver during peak. I’m not sure why you are pretending that was the plan all along. I guess if you have to spin everything as a good sign that’s all you’ve got, but it’s not very believable.

 

[bacha29]

Do you see how these two statements possibly are linked in a way that is not great for FedEx?

The infrastructure held up because volume was way, way down. We have a guy in our building who tracks the numbers religiously every day year over year. At the last peak planning meeting with the engineer and MD (both of whom were fretting about whether we we’re ready) everyone basically ignored them and looked to J to get his insight. His numbers held up throughout peak. He consistently said we’d be down 15 to 20% and he was exactly right. Easiest peak ever.

That easy peak bailed out the company. The uncertainty in the contractor ranks continues and further cutting those rates in order to pander to investors will bring another example of how broken it is.

The one thing they might have going for them is continued weak demand. Between a slowing economy and shippers fleeing, they would be foolish to think everything simply turned out fine.

None of that even begins to touch how much they paid out and are paying out in contingencies.

Good point. Peak this time around may have just been delayed. Reports are saying that retailer inventories are extremely high and will have to eat their losses and move it out at "take it off your hands prices". We'll see if those reports are correct.

 

[bbsam]

Good point. Peak this time around may have just been delayed. Reports are saying that retailer inventories are extremely high and will have to eat their losses and move it out at "take it off your hands prices". We'll see if those reports are correct.

It may not matter for FedEx. I’m hearing they expect to continue to lose volume going into the new year.

 

[bacha29]

FedEx spent a ton in contingency this peak. They didn’t steady the ship. They lucked out of disaster.

And in our district, the predictions for volume were all over the place. They were up, then down, then up again.

But keep tuned in. There’s a company wide push to get away from contingency by forcing work on other contractors. They will hasten the demise of still floundering contractors, erode the morale of most of the rest and face flat out noncompliance from about 10%.

But you go ahead and push more money into stock options if you’re sure that Raj can handle this.

Exactly. There are parts of the country and there a countless numbers of them that are simply too economically depressed, too sparsely populated and have roads so primitive that they tear completely trucks apart. The result is that those areas cannot be serviced for what Fat Freddy is wiling to pay. And yes, as we talked about before, Fat Freddy will no doubt attempt to force those miserable unprofitable routes onto contractors as a condition for a new contract before he has to finally be willing to PAY what it actually costs to service them.

 

[MAKAVELI]

It may not matter for FedEx. I’m hearing they expect to continue to lose volume going into the new year.

Part of that is the regular cycle of volume after peak returning to pre covid levels. The sky isn't falling but FedEx will play that hand to stockholders and employees.

 

[bbsam]

Part of that is the regular cycle of volume after peak returning to pre covid levels. The sky isn't falling but FedEx will play that hand to stockholders and employees.

Not around here. We usually stay fairly busy through January. They call it “gift card peak”. Definitely not peak levels but not layoff levels either.

 

[bacha29]

When you combine Patton having pulled the curtains back creating a much broader public exposure to how Ground is structured with some ugly incidents in Texas and Georgia the result is clearly a blighted and tarnished FDX which will no doubt cause shippers to weigh slightly lower rates against the clear cut professionalism of UPS.

 

[yadig]

Not around here. We usually stay fairly busy through January. They call it “gift card peak”. Definitely not peak levels but not layoff levels either.

Does ground layoff?

 

[MAKAVELI]

Not around here. We usually stay fairly busy through January. They call it “gift card peak”. Definitely not peak levels but not layoff levels either.

Yeah it does typically stay busy for us directly after peak but does drop off at some point. Just seems that drop off has come early. We'll find out soon if it is industry wide or more of a FedEx issue.