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<blockquote data-quote="Ricochet1a" data-source="post: 1002890" data-attributes="member: 22880">As with all things in business, quality has a cost. The issue becomes one of how the business is to manage the cost of providing quality - and one of how much are customers willing to pay for quality received. FedEx has made the decision that the cost of quality that is associated with its non-overnight product is too high for the market to bear (the difference between the PRICE the market will support and the COST Express incurrs in providing the service is too narrow), so the &quot;quality&quot; of that product will be dropped, to reduce its costs to Express and therefore increase its margins. By shifting all of that &quot;troublesome&quot; freight (send-agains and non-overnight volume) over to lower cost FedEx opcos, the company can boost its margins, while still providing what it believes is a service level which will be acceptable to the &quot;market&quot;. The process of implementing that change has been slow, but at this point it is undeniable. The only real issue is how are the wage employees (in particular the full-time Couriers) going to react to this change. I believe that the pace of change has been DELIBERATELY kept slow enough, as not to create &quot;undue alarm&quot; among the career Couriers and have them start organizing in response (turn up the heat on that frog in the kettle real slow like). So far, it appears that FedEx&#039;s strategy is working as planned and the sheep aren&#039;t getting too nervous..... yet.</blockquote>

[QUOTE="Ricochet1a, post: 1002890, member: 22880"] As with all things in business, quality has a cost. The issue becomes one of how the business is to manage the cost of providing quality - and one of how much are customers willing to pay for quality received. FedEx has made the decision that the cost of quality that is associated with its non-overnight product is too high for the market to bear (the difference between the PRICE the market will support and the COST Express incurrs in providing the service is too narrow), so the "quality" of that product will be dropped, to reduce its costs to Express and therefore increase its margins. By shifting all of that "troublesome" freight (send-agains and non-overnight volume) over to lower cost FedEx opcos, the company can boost its margins, while still providing what it believes is a service level which will be acceptable to the "market". The process of implementing that change has been slow, but at this point it is undeniable. The only real issue is how are the wage employees (in particular the full-time Couriers) going to react to this change. I believe that the pace of change has been DELIBERATELY kept slow enough, as not to create "undue alarm" among the career Couriers and have them start organizing in response (turn up the heat on that frog in the kettle real slow like). So far, it appears that FedEx's strategy is working as planned and the sheep aren't getting too nervous..... yet. [/QUOTE]

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