It is looking like Express is going to do what they were planning in late 2009, make Express a pure overnight delivery service and kick delivery of all non-overnight volume over to Ground. The kinks have been worked out of Ground to a sufficient degree to give upper management the confidence to shift delivery over to Ground. All that investment in Ground over the past two years wasn't just to make that "division" profitable, it was in anticipation of shifting delivery of volume over to Ground like I said all through late 2009 and early 2010.
I haven't been able to get any electronic copies of any internal plans this time around, but it is looking like DGO is going to get trimmed, while AGFS should remain relatively intact. It is doubtful that there will be a large scale integration of Ground and Express, merely a combining of certain administrative features which both Express and Ground will share (all the while maintaining the charade that they are "separate operating companies").
How the shift is to occur has been held VERY tight to the vest in Memphis, not even District level staff have been given a heads-up. Asking local station management anything is absolutely a waste of time right now, they don't know a thing (unless they are getting information outside official channels).
The most common consensus regarding a conversion of business model for Express would be the gradual phasing out of full-time wage employees from DGO. Without non-overnight volume, delivery volumes per route would go down between 40% and 70% (all depending on individual route). Been wondering why all the games with altering route boundaries and start times...
Absent second day volume, all delivery routes would be easily performed on a part-time basis. The speculation (no electronic copies of plans on this have been seen) is that current full timers would be retained, forced to do an AM delivery, then a PM pick-up route with a forced split shift if necessary. As attrition thins out full time Couriers, they would be replaced by two part-time Couriers (one AM and one PM). Again, this is one of but a few hypothesized operating plans being contemplated - and what I said in 2009 and 2010 would be the most logical.
FedEx isn't looking to make any fast moves, but if it does lose its RLA status in the latest go around of the FAA reauthorization, look for rapid fire changes - and I mean RAPID. Express won't play around waiting for what it knows would be an immediate unionization drive within DGO if it loses it RLA status. If Express loses its RLA status and a location voted to certify a union, Express has already decided to use lockouts as a retaliatory measure - absolutely legal response on their part. That is why Couriers have no alternative now if they want full-time employment on terms they are familiar with to start signing cards now on their own initiative.
Buyout... Are you kidding?? Forced split shifts for full-time employees and let attrition gradually thin the ranks.
Ground drivers integrated into Express... not going to happen unless RLA status is lost. The whole change to ISP has been to gain some stability within Ground while simultaneously avoiding the legal challenges (which I detailed in late 2009).
Contractor model in Express - won't work. FedEx has been able to play that game with Ground, but attempting to convert an employer-employee model over to IC model won't pass legal muster. FedEx would have to COMPLETELY reorganize, integrating Express DGO and Ground into a combined ISP model. Express would have to shrink to what is currently AGFS and then have an integrated delivery system that exactly parallels UPS (using local ISPs). There are too many pitfalls in this model the foremost would be regional service disruptions. Express will do whatever it takes to eliminate labor related service disruptions - even if it does cost them some extra cash for that prevention.
Things to look for:
1. What I said in the past would be the KEY indicator of a conversion - castor decking installed in a majority of Ground terminals.
2. Conversion of Express drop boxes into "FedEx" drop boxes - Ground packages openly accepted and boxes checked by both Ground and Express employees.
3. Elimination of Express XS (third day) service. From any given shipment origin location, Ground can now provide delivery within 3 days to a majority of locations in the continental US. XS is still used by some customers, look for that volume to be shifted over to Ground. Rates for Ground are a fraction compared to Express XS service.
4. Integration of administration functions. The remaining employees at Express have already seen how the station CSAs have been turned into shipping clerks for Ground (separate operating companies....), look for a transfer of CSAs from Express to FedEx Services. It was already mentioned that FedEx has been working on integrating dispatch functions between Ground and Express. The 1-800 number ALREADY handles both sides, look for that integration to drop down one level - local level dispatching functions.
5. Location managers at both Ground and Office have already been shifted off of salary and onto wage pay. Look for Express managers to be likewise shifted off of salary and onto wage compensation structures. Given the large disparity between the wage scale of ramp agents and RTDs and current salary level of operations managers, a shift to wage scale compensation for Express managers will cause even more pain than the salary cut a few years ago and the loss of merit bonusus. If this goes through, most ops managers with more than 10 years on the job will leave (coincidentally, what Express wants by the way, dumping topped out operations managers).
None of this will be rapid unless Express loses its RLA status (rather unlikely but still possible with all the deal making that will be going on in the coming days and weeks). It will be the slow and delilberate change that most will grudgingly accept, many will leave (I left) and all that stay will hate. The wage employees were thrown under the proverbial bus in 2008 with the pulling of the pension, the salaried employees were likewise treated to having departments closed and outsourced (layoffs in Memphis) and frontline managers being forced to relocate to understaffed locations or be let go (the mandatory trimming of ops managers last year) - along with a cut in salary and foregoing bonusus in the past. There are very few salaried employees that still "bleed purple" (thus the source of all this information).
If FedEx does lose its RLA status, the Teamsters will most likely make organizing drives in the locations they know that will yield positive results - those locations which have a healthy amounts of signed union cards and indications of favorability to organizing. I don't think they'll be able to act fast enough. Express is going to keep as much of its plan hidden and only reveal changes when they are ready to make the changes. Given the inertia of Couriers last year to signing union cards, Express will most likely be able to pull off a conversion of business model with minimal disruption to service. The best time to change business models is when unemployment is high and labor is scared. If there is anytime for FedEx to do another changing of business models, this is the time.