I know the rumor was a 28% spike this summer/fall. I was just told to expect 20% more this peak than last and that the company has turned away a few major shippers that wanted to switch now. The reason being the ability to handle the volume. They will switch over after peak.
This could be the reason we haven't seen the spike all ready and why the company has been approving new PSAs...
I wrote an inordinate amount regarding this a few months ago. That "28%" was most likely a combination of projected growth along with anticipated spike in the area bbsam's source was located within. In otherwords, the 28% WASN'T a nationwide projection, but rather regional or maybe even localized.
However, there is no denying that Ground has seen volume jumps this summer. So the info that bbsam put up was valid in my opinion (I initially shot it down, but later came to accept it as new info came out).
Regarding expecting 20% more volume this peak for Ground...
Well, Express is getting ready to dump 3rd day service. The announcement is supposed to occur in October, but so far, there have been no firm accounts on just exactly when the service will actually be ended. I've had correspondence that suggests end of November for termination of 3rd day, but this was informed speculation and the source didn't have a source document to base their opinion on. However, this particular source has been correct on many things in the past.
It would take at least a month between the time Express makes an announcement of ending 3rd day service and actually implementing it. Customers are going to have to be informed, and given the FedEx preferred solution to the issue - ship by Ground for non urgent freight. Express Couriers are going to have to be "trained" in how to process shipments indicating 3rd day service (upgrade to 2nd day - training completed). Customers are also going to have to be given the opportunity to set up a regular Ground pickup, if they are using 3rd day service and are going to be "forced" into using Ground.
Currently, Ground and Express move about the same piece count on a daily basis - so 20% in one opco correlates directly to 20% in the other...
I can't get a hard figure on the amount of "deferred volume" (non-overnight) that is actually 3rd day in Express - but my numbers show between 10 and 15% of total Express volume - tending closer to the 15% (especially around peak).
So in a round-about manner, you may have just given indirect confirmation to my source which states 3rd day Express service will end in late November - just in time to take the "pressure" off of Express during peak, and place it firmly into Ground's lap.
Regarding telling shippers to wait to switch...
That would be news, turning down volume prior to peak... If that is true, then FedEx is anticipating some MAJOR volume jumps in Ground this peak, and they are fearful that the Ground system might not be able to handle it all (severe backlogs of volume). I just can't believe that FedEx would turn down revenue, unless there was some VERY serious issues they knew was present. Expecting a deluge of what will soon be former Express volume hitting the Ground network would be about the only thing I could see, which would make FedEx shy away from additional business.
Giving further credence to this assertion of holding back from taking additional shippers till after peak - would be that once peak is over, the system would be "tested" to handle all that additional volume. With the drop in peak volume, the volume from the additional shippers could easily be incorporated into the already expanded Ground network without any difficulty.
