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

[FreightNazi]

I gotta ask.. if UPS was so interested in the contract why didn't they go after it in the first place? One thing to talk about it at a "workshop", whole different animal to actually execute it.

From what I understand, the USPS "invited" FedEx to bid on the contract. They were the only ones "invited" and therefore the only ones that "bid" on the current contract. If my understanding is incorrect then I invite anyone with the facts to please correct my understanding of the facts. It really seems that UPS now realizes just how much revenue the contract brings in and they definately want it for themselves. This should get real interesting come contract bidding time as we will see if UPS is really serious about going for the contract. Like I said in an earlier post, I personally heard the president of UPS Airlines say that UPS would bid on the contract when it comes up and will bid so as to make sure that they get it or whoever does get it can't make any more off it. When asked if UPS would bid under cost to get the contract, he just smiled and said that UPS has lots of ways to spread the cost out. It really seems as if UPS is going to do a "scorched earth" type bid.

 

[PurpleTail]

He answered by saying that UPS was VERY interested in bidding on the contract. So much so, he said that UPS' bid would be so "competetive" that if UPS did not get the contract, whoever would get it would not make a dime. He said that UPS now realizes how much revenue the contract brings in and they definately want it.

So what you are saying is UPS will do it for free?? What makes you think you can do it more effecient?

In regards to the major issue, the damage has already been done. Even if FDX loses some (not likely it would be all) of the mail it is still FEDEX DROP BOXES in front of every post office in the country. Envelops retrieved from the drop boxes yield the highest profit margins for the company, that is why the are EVERYWHERE. Part of the deal Fred made was for EXCLUSIVE rights, UPS can not do that if they get some US mail.

But lets get real for a second...the competetion is not domestic, everyone knows that...its been flat for years The race is for China and India which we are already deep rooted and well established. I kinda like where I'm sitting

 

[Lear70]

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.

That would be a neat trick. The average on-time / completion factor within the "holy trinity" (Express One, Ryan, and Emery) flying the USPS priority mail contract prior to FedEx was somewhere north of 98%.

"Double Digits higher" would be somewhere north of 100%...?

Don't shoot the messenger, although it's a LOT cheaper with FedEx and is the primary reason it was done. On-time / reliability suffered somewhat initially, but they keep on asking you guys to fly more, so you can't be doing TOO terribly bad of a job...

 

[Big Beer Belly]

No doubt UPS wants the contract. I would be surprised if they don't get some of the mail.

UPS flies mail every day. I've seen many a 747 full of nothing but mail ... and I'm not referring to xmas overflow.

My guess is UPS has finally seen the light when it comes to air freight and is a "johnny come lately" to this party. With their recent acquisitions of Menlo Worldwide and Overnite, and their construction of multiple air freight handling facilities, my guess is UPS intends to become a serious player in the freight biz (both ground and air). Many analysts say to watch for further freight industry consolidation.

BBB

 

[FlyBoeingJets]

the seven year contract is domestic mail. US international mail is a different contract which fedex took over last summer from DHL.

c'mon fly...............stirring the pot about something you have little knowledge of other than reading a 4 year old press release isn't the best way to "probe". To answer your question, FedEx's 98+% reliability rate provided to the post office is well ahead of their 95% goal. USPS has actually shown a profit since this contract took effect. FedEx isn't going to lose this contract.

I heard mixed things about international mail. Some said it was not really an exclusive contract. I'll have to take your word for it.

It was good for the cargo guys when big post office packages couldn't be carried by the pax guys. China growth will make up for any slack with this post office stuff, but it might take a year or two in a worst case scenario IMHO.

 

[klhoard]

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I remember a few years ago UPS suing the USPS trying to get the rights to do First Class mail. . .
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[Big Beer Belly]

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I remember a few years ago UPS suing the USPS trying to get the rights to do First Class mail. . .
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Haven't heard that one and highly doubt it. Can't imagine UPS wants any part of delivering first class mail. Perhaps the right to place an "overnight" letter in a mailbox ... but certainly not delivering the "last mile".

 

[410dude]

It seems UPS is into the mail business afterall. Check out this link.
http://www.upsmailinnovations.com/about/overview.html

 

[FN FAL]

When asked if UPS would bid under cost to get the contract, he just smiled and said that UPS has lots of ways to spread the cost out. It really seems as if UPS is going to do a "scorched earth" type bid.

Sounds like the UPS guys are in for a "scorched earth" type contract.

 

[TexaSWA]

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.

Ditto what Lear70 said. Except that ExpressOne was anything but "Holy" (outside of the EuroTran flying).

And im not sure how FedEx could be asked to "renew" a "7 year deal" that has not even been in existence for 7 years.