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

[Echopapa]

I don't think that UPS has the infrastructure to handle the postal contract.

UPS is about half the size of FedEx. FedEx is maxed out handling the USPS contract, and as previous posts have indicated, USPS is looking for more lift which we cannot support.

How on earth would UPS, at half our size, take on this type of commitment. The reality is they could not without dramatic infrastructure changes, and by that I mean twice the ramp space, twice as many aircraft, and twice the pilots.

That type of infrastructure change doesn't happen overnight (no pun intended) and is not cheap. Just imagine how long it would take to train 2000 new hires, and of course every other pilot already on property as they move immediately to Captain? Where would UPS find the over 200+ freight aircraft they would require? Where would UPS put those aircraft? We are talk about doubling the size of your IIU hub or creating an equal sized hub somewhere else from scratch.

I do think its possible to see UPS get a portion of this contract, especially if we are unable to handle the additional freight, but the idea that they could take the entire contract is ludicrous.

 

[410dude]

UPS would get the pilots they would need from all the furloughs FedEx would have if they lost the contract!

 

[410dude]

I don't think that UPS has the infrastructure to handle the postal contract.

UPS is about half the size of FedEx. FedEx is maxed out handling the USPS contract, and as previous posts have indicated, USPS is looking for more lift which we cannot support.

How on earth would UPS, at half our size, take on this type of commitment. The reality is they could not without dramatic infrastructure changes, and by that I mean twice the ramp space, twice as many aircraft, and twice the pilots.

That type of infrastructure change doesn't happen overnight (no pun intended) and is not cheap. Just imagine how long it would take to train 2000 new hires, and of course every other pilot already on property as they move immediately to Captain? Where would UPS find the over 200+ freight aircraft they would require? Where would UPS put those aircraft? We are talk about doubling the size of your IIU hub or creating an equal sized hub somewhere else from scratch.

I do think its possible to see UPS get a portion of this contract, especially if we are unable to handle the additional freight, but the idea that they could take the entire contract is ludicrous.

They would get the lift needed by turning the aircraft that fly the express night packages to fly the mail during the day..... just like FedEx does!

 

[capt_zman]

hey 410, why don't you take your know it all punk a$$ someplace else. You know nothing about how fedex or ups operates either airplanes or their business, so please do us all a favor, and go away.

 

[410dude]

hey 410, why don't you take your know it all punk a$$ someplace else. You know nothing about how fedex or ups operates either airplanes or their business, so please do us all a favor, and go away.

Then why don't you tell me what I said that is inaccurate? Did FedEx go out and purchase aircraft SCRICTLY to fly the mail? The answer is NO they did not, they continued to purchase aircraft to service their ever expanding global express operation. The added lift needed to fly the mail comes by turning the aircraft that flies the night express runs and having them fly the mail during the day. The only thing that FedEx did strictly for the mail contract was to expand their hiring of pilots and if they ever lose the contract, they would suddenly find themselves way overstaffed and very likely to furlough.

 

[Echopapa]

410....


Your missing the whole point of my post. FedEx was twice the size of UPS when they picked up the USPS contract. We have hired additional pilots but we had the infrastructure in place to handle the contract. We had the gates and the aircraft available that wern't being used during the day.

My point is that UPS doesn't have the volume of aircraft or ramp space to handle the full mail contract.

 

[410dude]

410....


Your missing the whole point of my post. FedEx was twice the size of UPS when they picked up the USPS contract. We have hired additional pilots but we had the infrastructure in place to handle the contract. We had the gates and the aircraft available that wern't being used during the day.

My point is that UPS doesn't have the volume of aircraft or ramp space to handle the full mail contract.

I think that UPS has lots of aircraft that sit at outstations during the day that can be turned to fly the mail. Their domestic system is roughly the same size as yours. The only thing they would have do on a large scale is the same thing that you guys did, hire more pilots.

 

[Echopapa]

Their domestic system is roughly the same size as yours.

Your just plane (pun intended) wrong on this one

As of the year 2004, UPS owned 265.

FedEx has roughly 327. Both airlines have large numbers on order.

FedEx has 4300 pilots, UPS has around 2500 (this is a estimate...)

So no...they are not "roughly" the same size.

 

[Mr Zog]

Then why don't you tell me what I said that is inaccurate? Did FedEx go out and purchase aircraft SCRICTLY to fly the mail? The answer is NO they did not, they continued to purchase aircraft to service their ever expanding global express operation. The added lift needed to fly the mail comes by turning the aircraft that flies the night express runs and having them fly the mail during the day. The only thing that FedEx did strictly for the mail contract was to expand their hiring of pilots and if they ever lose the contract, they would suddenly find themselves way overstaffed and very likely to furlough.

UPS's express network (ie planes and pilots) is a little smaller than FedEx's. I am not saying that with the cash UPS has on hand that they could not increase it drastically in a short time. They can. From what I understand, the USPS is pleased with the way we are handling the mail. Maybe, you have heard otherwise. I don't know. They have repeatedly come back for increases in the amount of mail we deliver. I do think that eventually UPS will get part of this pie in the future. It makes good business sense to diversify. How much I don't know? I think the people that are going to be hurt are the smaller carriers who handle the mail. The chances of FedEx losing the ENTIRE mail contract, are pretty slim. IMHO. Even if they did lose the entire contract, it would be something that is phased out over a year or two. It is not likely that they would hand over such a large contract to UPS at once. But we are way ahead of ourselves here. Plus, I don't think there would be drastic furloughs like you predict. Yes, we did hire more pilots for the postal contract. But it was not as much as you think. FedEx just made us work more efficiently (ie out-and-backs). Plus, the USPS contract is not all roses. If your plane that is handling the mail doesn't get back in time to bring the express packages (your bread and butter) to the evening sort, that is a lot of lost revenue. There is a lot of system change to be made to handle the postal contract. It isn't as easy as you make it. I personally think there are bigger threats to the FedEx bottom line than the Postal Contract (terrorist attacks, oil prices, economy slowing down, etc). Just my opinion though. But shouldn't this be on the cargo thread?

 

[410dude]

Your just plane (pun intended) wrong on this one

As of the year 2004, UPS owned 265.

FedEx has roughly 327. Both airlines have large numbers on order.

FedEx has 4300 pilots, UPS has around 2500 (this is a estimate...)

So no...they are not "roughly" the same size.

If you would have paid attention, you would have noticed that I said the DOMESTIC system was roughly the same size. FedEx does have a substantially larger international system. Sounds like you are worried that FedEx may lose the contract when it comes up for renewal. Where you one of thoses hired mainly because of it?