How does FEDEX UPS make money

[ThisistheDream]

I am curious how much revenue does UPS or FEDEX make on a flight from lets say LAX to SDF or MEM in a 767 or A300 fully loaded with boxes VS. a DAL 767 fully loaded with passengers flight from LAX to ATL? I am assuming that FEDEX UPS is making 10 times the revenue on the cost of shipping boxes vs. the cost to ship passengers? How much more does it cost to ship a 6ft long by 2 ft wide, 200 pound box (the ave. person dimensions) on FEDEX UPS from LAX to ATL vs. buying one passenger ticket on DAL from LAX to ATL. the cargo carriers have an awesome pension, awesome pay and benefits and are spending a ton a fuel like the rest so is it just making more money shipping a 200 pound box vs. one passenger that makes then so much money or are we missing something else???? you can say they dont need any flight attendants (saves money) but they have the truck drivers, ground sorters etc. so they must have the same amount of employees roughly. So does it just come down to making more shipping 200 pounds of boxes vs. one passenger or is there some kind SWA equation they are using that also helps them make the millions???

 

[SWA GUY]

Here's the short answer, or question rather:

What can you stuff more of into an airplane, boxes or people?

 

[Whale Rider]

Here's the short answer, or question rather:

What can you stuff more of into an airplane, boxes or people?

Good one SWA GUY! I have a buddy in the MD-11 over there, he says Fedex makes $7 million every MD-11 load brought over from China. Don't know which way he sliced the calculations, but which ever way you cut it, thats alot of bread.

 

[fdxdisco]

Thisisthe dream
Here's a longer answer. I'm sure some guys will have more accurate figures.

I'm on the 11 and this is the way it was explained to me. 200K of international freight at $35 to $42 a lb is 7.0 to 8.4 mil a plane load. That was the going rate a couple of years ago, or so I was told. 400 pax at $2k a pop from the asia is only 800k. Was also told once that the 4-747 freighters that NWA once owned provided over 40% of there gross revenue.

Fedex Express (thats the air wing of FEDEX) makes most of its money from three sources: international, Hazardous material, and P1 (that's priority 1, ie letters that have to be there overnight). If you could see the sorting facility we have just for letter envelopes you know why this makes so much money. Think of hundreds of 50 gallon bags stuffed with letter size envelopes at $13 a pop.

Haz is a whole other subject. My favorite is when they load the infectious substance on top of the explosives. Like any airline (not just freighters) the Hax that scares you is not the stuff that's declared and shipped correctly, but the stuff that isn't declared. That's what caused our DC-10 hull loss a few years ago.

We also lost an MD-11 over the Pacific because of undeclared Haz. A really good actor got to spend 4 years on a deserted island because of it. No wait, that was a movie, never mind.

It's early and I've got a class to teach tomorrow.

Later
Disco

 

[TonyC]

It's early and I've got a class to teach tomorrow.

I don' wanna heer no whinin', ya heer?

 

[capt. megadeth]

The other day I went to overnight an approx. 1-3 lb book Chicago to Dallas.
Cost $36

 

[Goose17]

don't forget

Airline employees from other carriers get the SAME discount we FedEx employees get. Show your airline ID and you get a nice savings while shipping.

Goose17

 

[CA1900]

I use that discount a lot, and I greatly appreciate it. (So when people whine that they can't get reciprocation when a FedEx guy jumpseats, they just need to broaden their horizons.)

I also discovered a couple of weeks ago that, now that FedEx owns Kinko's, you can use your discount there instead of hunting down the sometimes-inconvenient FedEx Service Center. That's saving me a TON of driving!

 

[AlbieF15]

...before we get too exicited...

Airline pax drive themselves to the airport and "self load". We have to have a whole team of people and equipment to load, move, then distribute and deliver the cargo. The airline's job is done when the passenger steps on the airport curb--our company's job is still far from over at that point.

Stock report has reported margins from 7-15% historically. 7% of all that revenue is good, but we do have costs the pax carriers do not. All that aside...glad to be on the growing, secure side of this crazy business.

 

[ThisistheDream]

It seems the basic answer is that you can make millions more shipping boxes and letters rather than people, so with that in mind why dont the airlines increase some cargo operations or even start a small cargo operation like NWA does with?