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Fedex/UPS/DHL real competiton is who???

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Well-known member
Jun 18, 2004
Was wondering with the big 3, FEDEX UPS DHL as the cargo haulers, what after those 3 is any real competion for sending a package?? When i have looked your choices are the big three or going to the post office which in turn the GOVT contracts FEDEX/ UPS to fly the package for them. So the question is what if any real competiton is out there for the big 3 to worry about ???????????? The big 3 have sort of a conulsion going, where they can pass on the increase in operating costs to the consumer since there is no real other place to go to send a package. EX you want to send a package from Chicago to L.A...the average person where do you go and what are your options for sending it?? probally only one of the big 3. Take the same scenario as flying on a passenger airline and you have at least 15 different airlines options. So this great ride that the big 3 have will continue until there is some competion.. Yeah the big 3 have a great business plan its offering a great service in a very limited competing market. Now if there real competion like the airlines have, i dont think the big 3 would be so big.. what are the other shipping options???There are a handful small cargo carries out there but i think they contract fly for the big 3 to some extent so they are not really competing agaisnt them..
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Just wait till someone starts an LCC cargo operation then those FedEx and UPS guys/gals won't be making the big bucks anymore. Look what happened when the LCC's invaded the passenger side. It will happen to the cargo side too.

Your post gives new meaning to flame bait.
Well, the big difference is the infrastructure required to operate a world wide cargo company. Pax airlines can buy planes, gate, hire crew, rent ticket counter space and you have an airline, for the most part. Hell, you can even contract half that crap out. UPS, FedEx have to: buy planes feeder trucks, large sorting facilities, crews, lots and lots of ground crews, thousands and thousands of package cars, fuel(which now is probably #1 expense), people to drive package cars, and every other behind the scenes person a pax airline has. To start this kind of operation in today's environment, is just not going to happen unless you have billions to get started. Then you have to take the customers away from these "big three".

To me, the big threat is not another cargo company, it is UPS FedEx contracting out flying that should be done by them. There are plenty of contract cargo operations out there more than happy to fly UPS and FedEx packages instead of doing it for themselves.
OUT said:
Just wait till someone starts an LCC cargo operation then those FedEx and UPS guys/gals won't be making the big bucks anymore. Look what happened when the LCC's invaded the passenger side. It will happen to the cargo side too.

There are HUGE Capital Barriers to enter into this market place.

To be a LCC in the passenger industry all you need is 1 jet, a few pilots, a few FAs and a web site. Start off by cherry-picking the most profitable routes, undercut your competion, which easy, when your employee costs are minimal......the "self loading cargo" shows up and bingo.

To start package operation. You need vehichles to pickup and deliver the packages, multiple aircraft, a sort facility and lots of employees.

Let's say you want to do charter work. Maybe cherry pick a few cargo routes. So load up an aircraft with tropical flowers in Hilo Hawaii. It goes down. You have no back up, no options, the flowers die! Shippers learn fast its worth the extra buck to use Fedex or UPS.
Do some research. Much to learn you have, young padowan.

There is wet lease, charter and then there is express cargo. Charter cargo work between major American cities is very competitive.

Express cargo with service to the customer is a very different product. Astar and DHL are trying to make that work and have delayed some important infrastructure spending. The spending required is billions of dollars. Not like starting up a JetBlue or Virgin USA.

But then there is the issue of cabotage in Alaska and illegal charter flights for UPS....
DHL doesn't own much infrastructure except some sort buildings. Most everything else is contracted out to other vendors.
In regards to the amazing amount of capital needed to "start up" a new cargo carrier...
Fedex Express alone has more than 674 aircraft (including feeders), 42,000 motorized vehicles, 899 stations around the world, 41,000 and some drop boxes, 1,200 or so Kinkos, and 7,000 or so other Fedex shipcenters. That is just express by the way, you still have Fedex ground, freight, custom critical, etc. that would really lead to some staggering numbers. It would definitely be tough to get a new cargo carrier going that could actually deliver anywhere the next day on time the way that FedEx does succesfully every day.
I don't think that a LC Cargo carrier is the biggest threat right now. To me the biggest threat to FedEx and UPS are SCOPE issues in China and the far east...but that is for another thread!
Misery loves company, doesn't it guys. . . . .
IPA for open skies....

OCTOBER 24, 2005

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[/FONT][FONT=TimesNewRoman,Bold]OVT[/FONT][FONT=TimesNewRoman,Bold]. A[/FONT][FONT=TimesNewRoman,Bold]FFAIRS [/FONT][FONT=TimesNewRoman,Bold]C[/FONT][FONT=TimesNewRoman,Bold]OMMITTEE [/FONT][FONT=TimesNewRoman,Bold]C[/FONT][FONT=TimesNewRoman,Bold]HAIRMAN

By the time you read this article, lead
negotiators for the U.S. Government will
have returned from Europe where they
will have concluded a robust round of negotiations with
their EU counterparts and turned their sights toward continued
talks in the U.S. You are well aware of these negotiations
because IPNN has been keeping a close eye on the
talks . and for good reasons . jobs are at stake. In our
case, we feel it will translate into an increase in jobs, but for
others, it could be seen as a threat.
We believe an open skies agreement across the Atlantic
is extremely important to IPAmembers for several reasons-
-most notable of which will be the opportunity for new
European routes and more pilots on the seniority list. Currently,
UPS cannot use IPAcrewmembers to fly the following
legs due to the lack of route authority:​
. Cologne . Munich . Cologne
. Bordeaux . Rennes . Cologne . Rennes . Bordeaux
. Bologna . Bergamo . Cologne . Bergamo . Bologna
. Shannon . Dublin . Cologne . Dublin . Shannon
. Toulouse . Lyon . Cologne . Lyon . Toulouse
. Athens . Bergamo . Paris . Bergamo . Athens
. Lisbon . Oporto . Cologne . Oporto . Lisbon
. Edinburgh . East Midlands . Paris . East Midlands - Edinburgh
. EU theatre reserve/hot​
With an EU-US open skies agreement in place, these
routes could legally be flown by IPAcrews. Sounds great,
but, what.s in it for the EU members?
Well, for starters, they get access to EU-U.S. city pairs
currently not allowed (so would we). Airlines in the EU
must fly directly from their homeland to U.S. destinations.
A new agreement would allow any EU carrier to fly from
any EU country to any destination city within America. For
example, Air France could fly directly from London to
Atlanta, bypassing the need to stop in Paris, or--even more
oddly--Finnair could fly directly from Madrid to New York,
bypassing Helsinki. This agreement would allow EU
member airlines to develop an international network similar
to that of U.S. carriers. They would not be allowed to
conduct cabotage flights within America (routes from a
U.S. city to another U.S. city with domestic passengers
More importantly, perhaps, EU members develop what
is being described as a .First Step. initiative that may lead
to the real nugget . a change in ownership laws of U.S.
based carriers, commonly referred to as a .Second Step.
proceeding or ROE (rights of establishment).
ROE will require Congressional intervention through the
development of new ownership laws, traditionally a very
cumbersome and time consuming process. Ownership is
currently restricted to 25% from a foreign source. The EU
would like this restriction lifted--allowing 100% ownership,
if desired. Some folks in D.C. wonder if the Second
Step proceedings would even get underway in 2006, but
sources close to the negotiations believe that it could be
introduced in the Spring of next year and voted on by late
Fall .06.
So, is foreign ownership a good thing? Well, the answer
depends on your particular view of the industry. Cargo carriers
like FEDEX and UPS would probably have little to
gain. UPS, as per the contract, would be required to use
pilots on the IPAseniority list. We have heard it said that if
ROE were to become a reality, UPS would simply start a
European carrier and forgo usage of IPA pilots. Well,
according to the first article of our collective bargaining
agreement, that would be an improbability:​
Article 1.C.1. The execution of this Agreement on the part of the Company
shall cover crewmember operations of all aircraft operated pursuant to
the Company’s Airline Operating Certificate IPXA097B, and of all aircraft
operated pursuant to any additional Part 121 Airline Operating Certificate
or any foreign equivalent Airline Operating Certificate acquired by the
Company, or any affiliate of the Company in and for the service of the
Company or any affiliate or wherever located, presently operating, or to be
operated in the future..​
So, it would seem that ROE is a positive development for
IPAcrewmembers but a zero sum gain for UPS.​
Our brothers and sisters flying for passenger airlines have
extremely different ideas. Those flying for healthy carriers
believe foreign investment is not good and domestic competition
alone should dictate who stays and who doesn.t,
effectively forcing capacity to restrict and prices to inflate.
They tend to believe that their efforts toward profitability
should be rewarded and not hindered by foreign start-ups.
Conversely, those passenger carriers struggling to make
payroll tend to welcome the thought of accessing new
monies and gaining further access to the lucrative international
markets. U.S. carriers earn roughly $0.10 per ASM
on domestic routes and an astonishing $2.00 per ASM on
international routes. It.s no wonder most legacy carriers
want international expansion capabilities.
To be clear about one important aspect of negotiations, if
the First Step is agreed upon (most think it will happen
within a few weeks) and IF the Second Step (foreign ownership)
is initiated by next year, the U.S. Government
intends to strictly enforce and insist that any new carrier,
whether foreign or U.S. owned, be operated by FAA
licensed pilots. We have been repeatedly assured cabotage
and foreign licensed pilots are non-negotiable items. For
the IPApilot, however, this is not an item of concern as Article
1 of the contract clearly addresses the issue.
Please know that the Executive Board, Scope and Government
Affairs Committees will be monitoring developments closely.​

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