ALPA watching out for us?!

[FreightNazi]

I believe we will see another carrier flying FedEx cargo exclusively under FDX holdings within the next several years.

Would it be called FedEx Express Express?

 

[PurpleInMEM]

Za fazzerland vill rule once again...

Just FYI...

Standard letter, using company packaging, via courier pickup from Miami to Seattle with Overnight, priority-morning delivery results in the following:

UPS -- $59.34

FDX -- $55.28

and our good friends at Deutsche Post, DHL -- $25.33

 

[TonyC]

He has been building up back-ups on the ground shipment side for years so if one area fails, the other can pick up the slack.

Tell us about the back-ups that will get that letter from SHV to TYS, or for that matter, from New York to Los Angeles, or Miami to Portland - - either Portland.




.

 

[TonyC]

It appears that your union can demand and receive whatever level of compensation and QOL standard they desire with FDX having no option except to capitulate or fold. You seem to have dismissed every other option at FDX's disposal.

I never said we can demand whatever we want. We do, however, have a good deal of leverage to negotiate what we are worth.

As I asked RichardFitzwell, can you describe for us the option that will allow FedEx to guarantee service by 10:30 tomorrow across the country?


A scheme that allows FedEx to return to a 70% service level in 2 weeks is unacceptable. By that time, customers will have already shifted their business to DHL and UPS. Permanently. I've seen it happen. Once the absolutely, positively overnight guarantee goes away, that confidence and image are gone forever. Like virginity, you can't get it back.




.

 

[Traderd]

I never said we can demand whatever we want. We do, however, have a good deal of leverage to negotiate what we are worth.

As I asked RichardFitzwell, can you describe for us the option that will allow FedEx to guarantee service by 10:30 tomorrow across the country?


A scheme that allows FedEx to return to a 70% service level in 2 weeks is unacceptable. By that time, customers will have already shifted their business to DHL and UPS. Permanently. I've seen it happen. Once the absolutely, positively overnight guarantee goes away, that confidence and image are gone forever. Like virginity, you can't get it back.




.

I did not mean to insinuate that you had said that you could demand whatever you want. However, you have clearly articulated the case that there are no operational options available to FDX in the case of a pilot strike. At least none that would allow for the continuation of the business model as it is currently constructed.

It looks like there is a lot of leverage on your part.

Thanks

 

[TonyC]

... you have clearly articulated the case that there are no operational options available to FDX in the case of a pilot strike. At least none that would allow for the continuation of the business model as it is currently constructed.

It looks like there is a lot of leverage on your part.

I highlighted the key phrase. Clearly, FedEx could change its business model, and clearly they have threatened us that they will. It is my contention that were an alternate business model preferable to the Absolutely, Postively model currently in place, the model that made FedEx what it is today, we would have converted to that model long ago. As it is, we go to great lengths - - back-up crews, back-up airplanes, back-up plans - - to protect the image, the virginity. I believe we will continue to go to those great lengths.



.

 

[RichardFitzwell]

Tell us about the back-ups that will get that letter from SHV to TYS, or for that matter, from New York to Los Angeles, or Miami to Portland - - either Portland.




.

Like I said, you have the leverage TODAY. The transfer won't happen immediately, but it will happen. Over time FedEx will grow less dependent on Express air domestic and more on ground. Do you know what the fastest growing domestic transportation company is in history? It's FedEx Ground via RPS and Caliber Systems.

FedEx is parking the smaller 727's it uses to feed smaller cities and adding widebodies to larger cities. Ground can move it to within a couple hundred miles to and from the larger airport and still meet the 10:30 deadline. It's even easier for ground going west bound with the time difference.

The domestic air side of FedEx has lost money for the past seven straight quarters. I'm sure you already knew that. How has FedEx been so profitable? They are starting to rely more heavily on international shipments (like many domestic PAX haulers) and ground shipments. More money can be made internationally than can be made domestically. It's very possible for FDX to fly cargo international using pilots not on the current FedEx seniority list. You've already seen it around peak.

The bottom line is customers want that confidence you speak of but they want it at discounted prices. Competition will allow this to happen. FedEx will have to lower expenses to compete. That's where you come in.

 

[fr8doggie]

The domestic air side of FedEx has lost money for the past seven straight quarters. I'm sure you already knew that. How has FedEx been so profitable? They are starting to rely more heavily on international shipments (like many domestic PAX haulers) and ground shipments. More money can be made internationally than can be made domestically. It's very possible for FDX to fly cargo international using pilots not on the current FedEx seniority list. You've already seen it around peak.

/

From where do you get this information? This is from our most recent quaterly financial statement:

The following refers to the FedEx Express unit only

• Revenue of $5.12 billion, up 11% from last year's $4.62 billion
• Operating income of $285 million, down 8% from $310 million a year ago
• Operating margin of 5.6%, down from 6.7% the previous year

FedEx International Priority (IP) revenue grew 13% for the quarter, as IP revenue per package grew 7%, primarily due to higher fuel surcharges and package weights, as well as favorable exchange rates. IP average daily package volume grew 6%. U.S. domestic express package revenue increased 8%, as U.S. domestic average daily package volume grew 4%. U.S. domestic revenue per package increased 3%, driven by higher fuel surcharges.
On September 7, FedEx announced the first overnight express link between India and China as part of its new eastbound around-the-world flight, which connects Europe, India, China and Japan with the FedEx Express U.S. hub in Memphis. Start-up costs for this flight, together with costs associated with the westbound around-the-world flight that began in March, negatively affected operating income in the first quarter. The complementary eastbound and westbound around-the-world routes have been launched to meet supply and demand needs in both direction.

Those'll be flown by FDX planes and FDX crews. FDX does not like to use non-FDX assets as they are unreliable. Yes- we use them at peak because it does not make sense to run the manning/fleet based on the heavy requirements of a couple of months.

 

[fr8doggie]

Duplicate entries

 

[RichardFitzwell]

From where do you get this information?

Air Cargo News
January 2003

"AT WHOSE EXPENSE FEDEX"

Walk into any FedEx shipping center and you might be surprised at what the integrator with $21 billion dollars in annual throughput offers.
No longer a one-trick niche company today, you can choose various speeds and levels of service and prices at FedEx.
Most intriguing is FedEx Ground or what Big Purple has made of its $2.7 billion 1998 purchase of RPS Ground.
Elsewhere despite growth in Asia and a windfall of business post 9/11, as the company picked up U.S. flag carriers’ parcel post business from the U.S. Postal Service in the post 9/11 security hysteria, FedEx has not had much positive financial news from its domestic air business during seven straight losing quarters.
So why not take some of the billions already earned and go after UPS and its 10 million package a day U.S. domestic ground business?
That is exactly what is happening right now.

EDIT: This article is from 2003. I thought it was more recent. Sorry for the confusion. It does show us that the FedEx domestic product has suffered in the past couple years.