TonyC said:
For what it is worth, I think Tony sees things as they are for FDX right now. While they may be moving heavily into other, more traditional transportation models, the corporate image is "absolutely...positively overnight". Services other than that face far more competition. The overnight service is the primary appeal and I have known people who think that is all they do. This service would be difficult for a start-up competitor to infringe upon. The current competitors seem to be unable to make a real dent in FDX's profitability here.
My interest lies in the effect so much union influence may have on the business model. At some point, depending on the capital outlays required to maintain the peace, returns may be impacted and FDX doesn't have a lot of control over the issue. Tony has detailed how FDX can't effectively shift the flying costs to less expensive providers and to move the model from the overnight guarantee to a more generic delivery time frame could have serious consequences to their pricing power. So I wonder if the inability to contain costs if needed could lead to a reduction in FDX's growth, even without serious overnight competition. I will admit to having no knowledge of the elasticity of demand for that product.
Either way, it can be good for traders. Right now the float is not heavily shorted and I can get shares even in my small accounts. And if you guys come to an agreement and margins are maintained with growth, the upside potential can be equally as rewarding.
