Would FedEx go bankrupt if...

Discussion in 'FedEx Discussions' started by moon, Feb 21, 2013.

  1. moon

    moon New Member

    They paid their employees the same amount UPS does?

    Also, how does UPS manage to make more money than FedEx even though UPS employees are in a union?
  2. overflowed

    overflowed Well-Known Member

    It's all bullshut" moon. Fedex is makin money hand over fist.
  3. TechGrrl

    TechGrrl Space Cadet

    Don't know the answer to number 1, but it relates to number 2: as much as everyone loves to whang on the IE department, UPS has the most efficient operating plan in the business. It takes a lot of work to come up with that kind of plan, and even more work to actually execute it. (THANK YOU, operators and union workers!)

    FedEx gets by with a cheaper cost model, and so does not invest in optimizing their operating plan to the extent UPS does.
  4. MrFedEx

    MrFedEx Engorged Member

    Yes, they would go bankrupt. Why? Because FedEx is seriously mismanaged. The only reason they are as profitable as they are is the RLA on the Express side and the ISP scam on the Ground side. These two huge gifts to Mr. Smith means that a company managed by complete morons can still make money. UPS makes money because they know exactly what they are doing. I spent 3 years there in Feeder during Peak, and UPS knows how to keep people busy and freight moving. Most of their managers are also very sharp, unlike FedEx.

    UPS is the tightest ship in the shipping industry. FedEx is a leaky lifeboat with no oars commanded by Ernest Borgnine.
    Last edited: Feb 21, 2013
  5. hypo hanna

    hypo hanna Well-Known Member

    Our engineers have difficulty forming a proper sentence.
  6. vantexan

    vantexan Well-Known Member

    Did some Googling. UPS at the end of 2011 had over 398,000 employees worldwide. They had $54.1 Billion in gross revenue in Fiscal Year 2012 with $807 Million in net income.

    FedEx has 290,000-300,000 employees worldwide in 2012 depending who you ask. They had $42.6 Billion gross revenue in Fiscal Year 2012 with $2.03 Billion in net income.

    So UPS takes more in but due to it's higher employee costs has less than half the net profit. FedEx has about 75% the number of employees, most of whom make considerably less than UPS employees, but takes in less revenue and has higher operating costs due to flying a higher % of it's freight.

    If FedEx Ground eventually takes business from UPS it might not take long for UPS to be in the red as it has less of a profit cushion than FedEx. UPS does gross more than FedEx overall but that's due to a much larger market for low cost shipping as opposed to high cost overnight shipping. As FedEx Ground makes inroads with it's lower operating costs and Express shrinks FedEx profit should be substantially more than UPS. But doubtful that they'll share any of it with Express employees.
  7. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Van, the net for 2012 included a one-time payment of $896M to the New England pension fund. Without that payment our profits would have been similar.
  8. thedownhillEXPRESS

    thedownhillEXPRESS Well-Known Member

    That still stands out significantly when looking at gross revenue and number of employees.
    I'm thinking more and more that this may be the contract that makes UPS stand firm with the Teamsters , and the Teamsters doing the same.

    I'm obviously on your side of this, but I would be getting a little concerned right now.
  9. vantexan

    vantexan Well-Known Member

    Thanks, didn't know that. Bottom line though I don't think FedEx can pay as much as UPS with the higher operating costs and less revenue. Knowing them, if they took in as much money as UPS they'd still pay considerably less just because they could get away with it with the RLA. When there was a possibility of a union in the early years they were more generous but always pushed the boundaries to see how little they could pay. And that was in a high growth environment. They are close to going after UPS at it's own game, and if your people stand firm and refuse concessions to the company things will be very interesting 5 years from now. People seem to believe there's an endless reservoir of money, just a matter of forcing their company to give in. UPSers need to realize that the threat to their well being isn't UPS mgmt, but FedEx. I've known really good UPS people over the years, and after 14 years of abuse I don't want to see them get hurt by money hungry bastards.
  10. Brokedownandbrown

    Brokedownandbrown New Member

    Money is spent on Golf, Nascar, Stadiums, Football, and plenty more on lobbyists and lawyers.
  11. MrFedEx

    MrFedEx Engorged Member

    I still say we should outsource upper management...seriously. The idots who run this company prove their incompetence over and over again, only to be rewarded for their incredible stupidity, shortsightedness, and arrogance.

    Bring-in an independent third party management firm that specializes in correcting disasters like the one we have in-progress at this very moment. I say we start with MT3 and Dave, and see how much money we can save while simultaneously improving the bottom line. Once they realize Fred is living in 1932, he will be replaced too.

    Can't happen soon enough. Don't let the door hit you in the ass on your way out.