FedEx postal contract ends in 2008--Will they get it again?

FlyBoeingJets

YES, that's NICE
Joined
Mar 20, 2003
Posts
1,802
Total Time
>5000
BREAKFAST WITH THE FOOL
FedEx and Postal Service in $7 Billion Deal



http://g.fool.com/art/spacer.gif

By Tom Jacobs (TMF Tom9)
January 11, 2001

You'll get more purple and white with your blue soon at post offices, after the nation's mail carrier decided to fly high with FedEx Corp. (NYSE: FDX) yesterday. In a seven-year pact that could yield $6.3 billion, FedEx will transport U.S. Postal Service Priority and Express Mail between airports. FedEx will also pay between $126 million and $132 million to put its own drop-off boxes in 10,000 post offices over the next 18 months -- with rights to space in up to 38,000 more -- gaining up to $900 million in estimated new revenue.



And that may not be all. "The conversation doesn't end with this," Postmaster General William Henderson said, adding that more discussions could lead to FedEx depositing its own packages at post offices or the Postal Service using FedEx's system for better tracking of Priority Mail shipments.



But the deal does not yet provide that letter carriers will deliver FedEx packages or that FedEx will deliver mail. Rather, FedEx estimates it will hire about 500 new pilots, 200 mechanics, and 1,000 cargo handlers to handle about 30 DC-10 aircraft a day of Express and Priority Mail. Alan B. Graf Jr, FedEx's chief financial officer, saw a "great marginal return for the amount of variable costs we have to put in," and downplayed any overlap between the two entities' delivery services.



This should be a great deal for both parties: FedEx can utilize planes idle at certain hours, and the Postal Service wins another shot at improving its sagging reputation, especially with the business users of its more expensive services. But Postal Service-private company deals have failed to deliver before. Emery Worldwide Airlines, a unit of CNF Inc. (NYSE: CNF), had a 10-year contract to transport Priority Mail until 2002, but in November the Postal Service and Emery agreed to terminate the deal on January 7. Emery yesterday failed to secure a federal court order blocking the FedEx deal.


Is the post office going to split up the contract next time between UPS, FedEx and possibly Astar? I wonder.
 

mar

Remember this one?
Joined
Nov 27, 2001
Posts
1,929
Total Time
9500
Let me pull out my crystal ball.

How much has the industry changed in the past three years?

What's in store for the next three years?

Oh yeah, I heard a rumor that Atlas is buying FedEx! :eek:

HAH!!! :D

:p
 

FlyBoeingJets

YES, that's NICE
Joined
Mar 20, 2003
Posts
1,802
Total Time
>5000
Let me connect the dots....

Interview in July or August, get into the pool 6 weeks later, class date sometime in 2006. Fedex continues to hire 250 a year. Postal contract lost in 2008. Would that leave those hired in 2006-2007 in the SO seat for awhile? Would a furlough happen?
 

stonewall

Well-known member
Joined
Apr 5, 2005
Posts
2,117
Total Time
3K+
Fred and the rest of the Illuminati know the world will end in 2011, so they're not too worried about our contract (or the Postal one).
 

Thedude

Well-known member
Joined
Dec 15, 2001
Posts
1,277
Total Time
8000+
MAGNUM!! said:
Fred and the rest of the Illuminati know the world will end in 2011, so they're not too worried about our contract (or the Postal one).

I thought the world was scheduled to end in Dec of 2012. At least that what the guys on Art Bell say.
 
Last edited:

USNFDX

Purple Member
Joined
Dec 7, 2001
Posts
328
Total Time
4000+
Actualy,

The Fedex - USPS deal is a series of 7 year contracts that is renewed every year for a seven (7) year term. Fred aint stupid.

The contract is, can, and has been be mutualy amended each year. USPS has up the load every year. Fedex now carries almost twice the orignal agreed upon amount.This effectively protects Fedex from having the rug pulled out after large capital investment.

Nice try with the flame bait though!
 

FlyBoeingJets

YES, that's NICE
Joined
Mar 20, 2003
Posts
1,802
Total Time
>5000
Not flame bait. But definitely not worrying about stirring the pot and asking probing questions. I've worked for at least one company that proved less than completely honest with growth and revenue projections. I've been searching the web on this topic, very little info.


My Hope:

If the contract "comes up" in 2008 it will stay with FedEx. Sounds like the deal Fred made is structured differently. I hope you are right!

If not the above, that it only reduces to a slightly lower level and is shared with other U.S. carriers.

If not the two above, that its departure is gradual to protect employee positions.


I have read about the amount increasing every year. I thought that increase was a part of the original agreement. But I don't really know if the whole thing "comes up" in 2008 or if only some of it does. Any hard info on this topic would be appreciated.


Cheers,

FBJ
 
Last edited:

klhoard

Well-known member
Joined
Mar 14, 2003
Posts
766
Total Time
32000+
MAGNUM!! said:
Fred and the rest of the Illuminati know the world will end in 2011, so they're not too worried about our contract (or the Postal one).
.
.
.
Didn't you guys hear? NASA changed the trajectory of that asteroid with their probe so it will now hit the world in 2011. Just in time to end the chaos of PEAK OIL and President Hillary's regime.
.
.
.
It's all part of the vast Right Wing conspiracy. . .
.
.
.
 

skykid

On Point
Joined
Jan 24, 2002
Posts
759
Total Time
6000
You can joke about it all you want, fact is the USPS is not happy with performance. They've had some letters and packages getting through on time, and they will make changes. You read it here first.
 

Juan Tugo

Fire for effect...
Joined
Mar 29, 2003
Posts
86
Total Time
1:13pm
You can joke about it all you want, fact is the USPS is not happy with performance. They've had some letters and packages getting through on time, and they will make changes. You read it here first.

Yeah, being on time is unacceptable.


:rolleyes:
 

h.simpson

Active member
Joined
Feb 4, 2003
Posts
26
Total Time
5000+
Actually, the USPS is so happy they keep renewing the 7 year deal and beg FedEx to fly more every year. FedEx is actually the one not accepting more freight from the USPS right now. (we are short of lift) The on time/reliability rate is always double digits higher than any time before FedEx starting carrying their packages, and at a cheaper rate.

...UPS has also always stated they don't want any part of flying USPS freight.

Not sure where you are getting your info. Got this stuff from the horse's (BC) mouth.

h.
 

klhoard

Well-known member
Joined
Mar 14, 2003
Posts
766
Total Time
32000+
skykid said:
You can joke about it all you want, fact is the USPS is not happy with performance. They've had some letters and packages getting through on time, and they will make changes. You read it here first.
.
.
.
And just as quickly dismissed. . . .
.
.
.
Thank you for playing. . .
.
.
.
 

skykid

On Point
Joined
Jan 24, 2002
Posts
759
Total Time
6000
And just as quickly dismissed. . . .

Uh, read for content much? My post is what you call an absurd joke, which is not meant to be taken seriously.

You need to start playing...
 

TAZ MAN

Well-known member
Joined
Jan 17, 2005
Posts
271
Total Time
>10000
skykid said:
Uh, read for content much? My post is what you call an absurd joke, which is not meant to be taken seriously.

You need to start playing...

I also thought it was obvious.

Some get wound up pretty tight around here.
 

klhoard

Well-known member
Joined
Mar 14, 2003
Posts
766
Total Time
32000+
skykid said:
Uh, read for content much? My post is what you call an absurd joke, which is not meant to be taken seriously.

You need to start playing...
.
.
.
OOOPS!! Sorry. . . coffee hadn't kicked in yet. . .
.
.
.
 

stonewall

Well-known member
Joined
Apr 5, 2005
Posts
2,117
Total Time
3K+
TAZ MAN said:
I also thought it was obvious.

Some get wound up pretty tight around here.

TAZ absolutely, positively cannot stay away from any thread with FDX in the title.
 

skykid

On Point
Joined
Jan 24, 2002
Posts
759
Total Time
6000
If you don't think the USPS is monitoring this thread, you are wrong. Be careful what you post and TAZ please exit.
 

TAZ MAN

Well-known member
Joined
Jan 17, 2005
Posts
271
Total Time
>10000
skykid said:
If you don't think the USPS is monitoring this thread, you are wrong. Be careful what you post and TAZ please exit.

No....

Thats what I get for backing you up???? :eek:

What a place this has become. :confused:
 
Top