What Your 2% "Raise" Really Means

[MrFedEx]

Fred has announced we're getting our 2% in January, 2010. The 401k and match are also coming back. That's nice, but we've essentially gained nothing. Your health care deductibles went-up significantly, your hours have (generally) been cut, and we still don't have a retirement plan. Don't forget that extra 7/10th's of a stop per hour too. For the math-challenged, that's 7 extra stops daily given a 10 hr workday. If you do a resi route, that's a lot. Please include your unpaid but worked lunch breaks when you get all excited about the 2%, OK?

If anyone was paying attention, your Pretend Pension Plan (PPP) is still the same, which means that your hamster might be able to retire on the PPP payout, but you'll be living in your car when you hit 60.

Fred still has us exactly where he wants us, and until the RLA gets resolved, 2% is all we'll get. If the RLA decision goes against FedEx, watch how Fred will miraculously decide to be much more generous than he is now. That's because he knows that giving us a 10% raise will still be cheaper than a union contract....one that has a true retirement.

Let management crow about how wonderful and magnanimous they are to even give a raise during a recession, and then remember the 15 to 20% you've lost through stagnant wages and the loss of your traditional pension. Smith is still ahead by about 12-15% overall, because we are so damned ignorant as a workforce.

For those of you who believe the PR spin and that "FedEx Cares", I feel sorry for you. If I could, I'd reach through this screen and try to shake some sense into you. We need a union.

 

[Broke]

I applaud you Mr.Fedex for another well written post based on real facts. The sad thing is that most of our co-workers are to ignorant to understand the psycological warfare that is being waged upon us.

 

[MrFedEx]

I applaud you Mr.Fedex for another well written post based on real facts. The sad thing is that most of our co-workers are to ignorant to understand the psycological warfare that is being waged upon us.

One fact I had wrong is that we get nothing until March. The January raises go to management.

 

[UnconTROLLed]

Congratulations on the wage increase.

If it makes you feel any better, I only recieved a 3.2%? wage increase this year, and top-rate UPS drivers were less of a percentage.

 

[MrFedEx]

Congratulations on the wage increase.

If it makes you feel any better, I only recieved a 3.2%? wage increase this year, and top-rate UPS drivers were less of a percentage.

I do appreciate the raise. But UPS didn't kill your pension...that's the biggest difference. I'm guessing it's around 15% of your total compensation package?

 

[SmithBarney]

One fact I had wrong is that we get nothing until March. The January raises go to management.

While anything is better than nothing... I see this possibly as a "motivation" tool for peak.
after peak they will say sorry seasonal projections were not met and the company cannot
afford to give raises.

 

[Washu234]

Member of management actually pulled me aside when he heard me laugh about the 2% raise with another worker. He must have come in at the end of the conversation cause we both said we were here for other reasons then the pay.

Anyway I got a mini lecture about it. Kinda made me pretty anti-fedex in that moment.

I'm pretty happy with my manager but this other managers random evedrop made very uncomfortable.

 

[Fedex Driver]

i love when they give the old "you guys should be thankful you have a job" speech.

 

[UnconTROLLed]

I do appreciate the raise. But UPS didn't kill your pension...that's the biggest difference. I'm guessing it's around 15% of your total compensation package?

I don't see how they killed your pension. Yes, in 2003 FedEx began offering the PPP and in 2007 made it a standard. They also decreased the time to vested to 3 years, which is useful because the Pretend Pension Plan was extended to a broader range of employees, who should not have a long tenure. Also I read life expectancy played a role in the deision. It only made sound business sense for FedEx to make those decisions.

Foremost, FedEx offers a 401k match? I'd rather have the 401k match personally. I put 7% of my check in 401k and am not relying on a pension.

 

[MrFedEx]

I don't see how they killed your pension. Yes, in 2003 FedEx began offering the PPP and in 2007 made it a standard. They also decreased the time to vested to 3 years, which is useful because the Pretend Pension Plan was extended to a broader range of employees, who should not have a long tenure. Also I read life expectancy played a role in the deision. It only made sound business sense for FedEx to make those decisions.

Foremost, FedEx offers a 401k match? I'd rather have the 401k match personally. I put 7% of my check in 401k and am not relying on a pension.

The PPP isn't a true pension plan, and our 401k match is pathetic. Richochet1, who is usually spot-on with his numbers, said that the PPP costs one-fifth what the old pension plan did....what does that tell you?

 

[UnconTROLLed]

The PPP isn't a true pension plan, and our 401k match is pathetic. Richochet1, who is usually spot-on with his numbers, said that the PPP costs one-fifth what the old pension plan did....what does that tell you?

Again, 3 years in and you get PPP. And the money is available NOW or whenever you leave FedEx, no? Sounds like a good deal for a company and operation that generally will have high turnover ( as UPS does also). PPP costs 1/5 of what the old pension did, again sounds like FedEx made a SMART MOVE cutting costs. Did I say it was a good deal for you, or anyone hired under the old pension plan and then "cut" from the old one? No I did not. Am I missing something, though? It sounds like a smart business move, again, with a high turnover.

401k match is pathetic? explain.. we get no 401k match and with pensions probably whittled down to nothing by the time I retire (31 years old), 401k will be all we have.

 

[Fedex Driver]

Richochet1, who is usually spot-on with his numbers, said that the PPP costs one-fifth what the old pension plan did....what does that tell you?

Just because someone on a UPS forum tells you something,doesn't mean its true.You cant believe everything you read on the web.

 

[Fedex Driver]

I would also like to know what is so pathetic about a 401k match.I had no such thing all the years i worked at UPS.

 

[MrFedEx]

Just because someone on a UPS forum tells you something,doesn't mean its true.You cant believe everything you read on the web.

Your 401k match is non-existent until March, 2010, and the amount is piddling compared to other companies. Yes, the PPP was undoubtedly a major coup for FedEx because they slashed retirement costs. The next time you get your "retirement" statement, whip-out a calculator and see how the PPP stacks-up to your old traditional plan. For me, it's almost exactly one-fifth of what I would have received under the old plan.

Also, please tell me how you're going to ever retire on what FedEx is offering? $50 a month and your annuity that you've built-up? What a joke.

FedEx essentially shifted four-fifths of responsibility for retirement back to the employee. You get to fund almost all of your retirement instead of FedEx. Maybe you're all for personal responsibility and the Horatio Alger "free market", but you just had 15% of your compensation pkg go away and you are too ignorant to even be upset about it?

 

[Ricochet1a]

The 401k match is I believe a maximum of 3% of gross for the employee's 5% deduction. Whoopee...

The PPP resulted in career employees that retire before age 50 losing about two thirds of their pension benefit. What was "earned" prior to the traditional pension plan being taken away is locked in, but from that point forward, they are receiving about one-third of the benefit they would've under the traditional plan. The plan "benefits" those that keep on working past age 50 to receive a greater FedEx "contribuition", but not many line employees make it too far past age 50.

Past age 50, the loss compared to the traditional pension plan is about half for each year worked past age 50. For office workers that are able to work till age 65, they come out about even with the traditional pension plan, since the FedEx contribitions don't stop and the percent of gross contributed kicks up to 8% at age 50. This is an obvious design to penalize those who perform the manual aspects of Express and those that sit in the hub offices till age 65 don't take much of a hit.

The traditional pension plan benefited those who put in 25 years and took the physical pounding of the job, allowing them to retire, get a second career and have a respectable retirement starting at age 60. That is quickly disappearing for the line employee. Right now it doesn't show up, since most employees that are retiring are younger than 60 and haven't started drawing. In another 10 to 15 years, when those that were affected by the switch start drawing, they'll realize real quick what they've lost.

They'll look at what they are getting from FedEx for a pension 10-15 years from now, and then do the quick math calculation of 50% of the average high years while working and realize what they've lost. It will be much too late by then.

As a poster pointed out, the PPP give those that have less than 5 years with FedEx something when they leave. I believe this poster worked with FedEx and left prior to having 5 years - meaning he wasn't vested and left with no pension whatsoever. Pensions aren't intended for high turnover employees, they are intended for career employees that form the core of the company and make a career committment to the company. Under the PPP, high turnover part-time employees will leave with $3-4,000. Whoopee.

All of the points made by the UPS employees miss the mark for FedEx employees. The full-time Express employee is making between $38,000 and $50,000. We pay a healthy premium for our benefits. Our pension went from being a good deal to a joke. The 401k matching funds that were intended to "soften" the blow of the decreased pension benefit were withheld for over a year. We had our pay progression that was "promised" frozen. It still won't be the full progression that is promised next year and there is going to be no "catching up" of the lost progression. We're going to lose 10% of our gross each and every year hence forth because of the games Fred and company played with our incomes.

If Express Couriers were grossing $80,000 a year +. we wouldn't have much room to complain. There are Couriers out there busting their tails making less than HALF what the guy or gal in brown is making right now. The misclassified Ground drivers are making about a THIRD of what the people in brown are making - and they are moving the same volume of stuff as UPS is moving.

Because of the morale problems caused by these personnel policies, Express management is resorting more and more to threats of disciplinary action to get things done. "Operational Need" is being brought up more and more as an excuse to toss personnel policies out the door and to have policies that were in effect for years to be outright deleted from the personnel management manual (PEOPLE).


That transformation of Express that I wrote about 6 months ago is slowly being implemented. For the Express employees that have been with Express for more than 5 years, look at what is standard operating procedure now and compare that to 5 years ago, a marked and noticible change. You're going to hear "operational need" more and more as an excuse to jerk around your hours, withhold planned pay raises and even to eliminate routes. For those who watched the latest Frontline, they're even admitting now to eliminating routes within that little piece of monthly propaganda.

 

[bbsam]

Ricochet, in reading your post it occurred to me that the company could be grooming couriers to become contractors. They seem to want to move more and more responsibility to the courier. And if the day comes when couriers as a whole come to the beliefs put forth the ideas that MrFedex often expresses, the company offer couriers a contractor model showing gross income of somewhere in the $110-120,000 range. Some might jump at it. Especially the young for whom health and retirement are not the top priorities. In time when a certain percentage is handled by contractors, "operational need" would require all of express to be covered by contractors. Fred gets the best of both worlds. Contractors working in close proximity with company trained drivers.

 

[MrFedEx]

Ricochet, in reading your post it occurred to me that the company could be grooming couriers to become contractors. They seem to want to move more and more responsibility to the courier. And if the day comes when couriers as a whole come to the beliefs put forth the ideas that MrFedex often expresses, the company offer couriers a contractor model showing gross income of somewhere in the $110-120,000 range. Some might jump at it. Especially the young for whom health and retirement are not the top priorities. In time when a certain percentage is handled by contractors, "operational need" would require all of express to be covered by contractors. Fred gets the best of both worlds. Contractors working in close proximity with company trained drivers.

Some good points to ponder. If FedEx tweaked the contractor model enough, some might go for it. The income potential at Express just isn't there any more.

 

[Ricochet1a]

Ricochet, in reading your post it occurred to me that the company could be grooming couriers to become contractors. They seem to want to move more and more responsibility to the courier. And if the day comes when couriers as a whole come to the beliefs put forth the ideas that MrFedex often expresses, the company offer couriers a contractor model showing gross income of somewhere in the $110-120,000 range. Some might jump at it. Especially the young for whom health and retirement are not the top priorities. In time when a certain percentage is handled by contractors, "operational need" would require all of express to be covered by contractors. Fred gets the best of both worlds. Contractors working in close proximity with company trained drivers.

Express can't go to a contractor model, the structure of FAA requirements for background checks and direct control of drivers would preclude that situation from occurring.

Express isn't giving more and more responsibility to its Couriers, it is merely placing more and more control over its Couriers. Case in point, the past weekend.

All Couriers were required to compile detailed closure lists for companies which were to be closed the Friday after Thanksgiving. Each Courier had to get exacting detail on which companies were to be open, which were to be closed and which were to be open but not accepting shipments. Fine enough.

On Friday, Couriers then had to write up a "report" that compared the number of stops made to closed businesses. If they made too many stops at businesses which were closed - and they didn't get those businesses on their "closure lists", they were subject to disciplinary action for not following a mandated instruction from management. Friday AM was a mess in the stations, separating out packages to closed businesses while ensuring that no packages to open business remained behind. The time saved on the road Friday was probably eaten up by the extra time compiling the closure lists over the 10 days preceeding Thanksgiving and the extra time it took to separate out the stuff going to businesses that were closed Friday from everything else.

I'm convinced that the rationale behind the whole mess was to enable the closure lists to be entered into a database so that in the future the ROADS labeling system would be able to automatically indicate that a particular address is closed on a given day and the package pulled before it is even sent down to the trucks. From an operational stand point it makes sense, but this wasn't the reason given in the station. The reason given was that Express wanted to cut back on unnecessary stops on Friday. The average Courier spent 30-45 minutes on creating the lists (their stops per hour suffering in the process) and in extra load time on Friday, to save less than 30-45 minutes of actual on road time Friday. Some routes in some locations did save time by not taking out packages, but these were no great surprise. FedEx now has detailed lists for every route that specifies which business addresses are closed on the Friday after Thanksgiving.

FedEx does the ground model because its per package delivery cost is lower with the IC model. The owners are making decent money, the drivers are getting the shaft. If the average owner has 4 routes and the drivers are making half what their Express counter parts are making, there is room to shuffle off administrative overhead to the owners and still have a lower cost structure. One individual benefits (owner) and 4 are getting exploited (drivers) and FedEx pockets the difference.

Contractors could NEVER works side by side with Express Couriers. That would be a slam dunk case for violation of labor laws. Ground is skirting the intent of the law by carefully walking a fine line. Express is actually reducing the use of independent over the road semi-truck usage to enable costs to be contained within FedEx. Express will never go to an IC model, it wouldn't work. Express WILL begin to shuffle the delivery of its volume to either Ground contractors or may even start yet another FedEx company which handles what DGO does now within Express. Due to FAA security requirements, pick-up of volume that will be moved by aircraft will still have to be done by Express employees.


Express Couriers have neither the inclination or willingness to finance the outsourcing of their jobs even if it were possible. What would they gain? If you distributed your administrative overhead revenue to each of your drivers, they would STILL make less than a topped out Express Courier. This is by necessity, since otherwise the Ground IC model would end up costing more than the Express employee "model". Would I be stupid enough to pony up the cost for truck I drive, be responsible for its maintenance and not get any more compensation for the work I do?

The reason the IC model works is because there are a few that take the risk, and a lot more that do the work and are compensated at a fraction of what they'd get if they were classified as employees of Ground. If you were to take your "cut", divide that by the number of drivers you have, each driver would STILL make less than their Express counterpart - but they'd have the risk and headache of owning a truck and performing maintenance on it. Some Express Couriers aren't the brightest bulbs ever made, but NONE would ever fall for that.

 

[MrFedEx]

If Fred were to sweeten the contractor "pot", I think he'd have some takers, especially if he threw-out some inflated numbers for net income. We do have a lot of stupid employees. Just look at all of the people who still believe in the Purple Promise, PSP, and all the rest of the PR garbage FedEx spews daily. Don't you think some are dumb enough to fall for another misinformation campaign? They're still falling for the current one.

Here's a hint of what's to come. Anyone else notice the increasing number of FedEx Freight and LTL trailers being pulled by owner-operators or third party contractors? I know Freight has a bunch of people laid-off, but I don't know about LTL. What are a bunch of can-haulers doing pulling FedEx trailers when our own people aren't working? This is what happens when you don't have a union. Smith can outsource work whenever and wherever he wants, and there isn't a thing anyone can do about it. This is just the tip of the iceberg.

 

[Washu234]

Express can't go to a contractor model, the structure of FAA requirements for background checks and direct control of drivers would preclude that situation from occurring.

Express isn't giving more and more responsibility to its Couriers, it is merely placing more and more control over its Couriers. Case in point, the past weekend.

All Couriers were required to compile detailed closure lists for companies which were to be closed the Friday after Thanksgiving. Each Courier had to get exacting detail on which companies were to be open, which were to be closed and which were to be open but not accepting shipments. Fine enough.

On Friday, Couriers then had to write up a "report" that compared the number of stops made to closed businesses. If they made too many stops at businesses which were closed - and they didn't get those businesses on their "closure lists", they were subject to disciplinary action for not following a mandated instruction from management. Friday AM was a mess in the stations, separating out packages to closed businesses while ensuring that no packages to open business remained behind. The time saved on the road Friday was probably eaten up by the extra time compiling the closure lists over the 10 days preceeding Thanksgiving and the extra time it took to separate out the stuff going to businesses that were closed Friday from everything else.

I'm convinced that the rationale behind the whole mess was to enable the closure lists to be entered into a database so that in the future the ROADS labeling system would be able to automatically indicate that a particular address is closed on a given day and the package pulled before it is even sent down to the trucks. From an operational stand point it makes sense, but this wasn't the reason given in the station. The reason given was that Express wanted to cut back on unnecessary stops on Friday. The average Courier spent 30-45 minutes on creating the lists (their stops per hour suffering in the process) and in extra load time on Friday, to save less than 30-45 minutes of actual on road time Friday. Some routes in some locations did save time by not taking out packages, but these were no great surprise. FedEx now has detailed lists for every route that specifies which business addresses are closed on the Friday after Thanksgiving.

... Dude this isn't a conspiracy. My station does this every holiday even on the minor holidays and have done so for the three years I've been here. The result is consolidated routes and less people working on Friday the day after Thanksgiving. If it weren't for this 'waste of time' I wouldn't have been able to interline (thanks to jetBlue) down to Charlotte, NC to visit my family for the holiday.

Part time drivers are often given the option to work the morning on minor holidays. Every minor holiday I do work I end up getting overtime delivering to the businesses that decided to open after all (even as a part timer).

I've been chaffed by some of the 'operational changes' Express is making but this is one of the good things in my region - perhaps it just expanded to yours?