Cargo Hedges??

[BILL LUMBERG]

Might not be the right board, but does anybody know if FedEx and UPS are hedged and to what extent....

They are beating the Wall Street drum justifying rate increases based on fuel......just curious because they probably get great deals on Texas Tea because they have bank vaults full of cash and they consume so much with the trucks and planes.....

Maybe the people carriers need to market the increases better.....

 

[Clacker]

I don't think that hedging really makes much of a difference with UPS and FedEx. They are Oligopolies, and between the two, control a very high percentage of the overnight/2nd day delivery market. Because of their vast air & ground delivery networks, and the high barriers to entry, there are no other competitors who really pose any threat. There are no "low cost" carriers undercutting them. So if Jet-A prices go through the roof, they just raise their rates a bit. People still want their iPods engraved and delivered overnight, and a few bucks more in shipping costs won't change that.

And I think that their pilots probably sleep well at night knowing this!

(I guess I should say" "They sleep well during the day knowing this")

 

[ATA For Now!]

I do A LOT of shipping through my store. Every time fuel goes up, so does the fuel surcharge at the bottom of my bill. I have no choice-either I pay it or I don't ship anything. I, as most, pass the added expense on to the customer.

I have seen price increases in almost all of our products from suppliers as well. The most being in our air-shipped cheese from Italy and France. Some as much as 40%.

It does affect our bottom line a bit but luckily, our year over year sales are still increasing.

Thank God for booze!

RV

 

[BILL LUMBERG]

I do A LOT of shipping through my store. Every time fuel goes up, so does the fuel surcharge at the bottom of my bill. I have no choice-either I pay it or I don't ship anything. I, as most, pass the added expense on to the customer.

I have seen price increases in almost all of our products from suppliers as well. The most being in our air-shipped cheese from Italy and France. Some as much as 40%.

It does affect our bottom line a bit but luckily, our year over year sales are still increasing.

Thank God for booze!

RV

I just figured that good business sense would be for them to hedge against spikes but you guys are right, they corner the market and can bump the price as they wish....