An interesting article in the papers

[Anonymous Coward]

Cold,
I tried giving you an educated explanation on my views. If a IC depends primarily on volume aloan to grow his or her business it seems like the the ground division is beefing up there network to handle much more volume. If you would like me to list the sorting facilities and hubs opening up in 2006 and early 2007 aloan I will.
I just see many customers switching over in the next few years to save money on there ground shipping. If I were going to guess I would see sales talking to some of UPS's larger accounts in the next few years. Fedex Express has been fortunate to be able to charge premium rates and not only increase volume but pull even further from UPS in the air and Intl markets. I just dont see how UPS will be able to keep ground pkgs when Fedex ground can charge much less and still turn more profit on the same ground pkg. People ship ground because it is the most inexpensive way to move goods. What would a bulk shipper like more than an even better price on there shipping?

 

[cold cold world]

so....is this the former poster that we call monte carlo 11.....aka michael????

 

[rushfan]

If it's you monte you've burned yourself so many times with your own logic.

 

[Son of Monte]

Fdx Ground Bashing

OK,...LETS HEAR YOUR OPINION ON THIS QUESTION.

IF UPS CAME TO YOU AND ASKED IF YOU WOULD LIKE TO OWN YOUR OWN ROUTE, WITH THE POSSIBILITY OF MULTIPLE ROUTES IN THE FUTURE, HOW MANY DRIVERS WOULD JUMP AT THE OPPURTUNITY TO EARN MORE?

IMAGINE GETTING PAID PER DELIVERY WITH THE VOLUME YOU CARRY? THIS IS NO JOKE THAT FDX GROUND CAN MAKE INCOME IN THE UPPER 100,000.00. THERE IS A YOUNG FELLA IN MY AREA THAT DOES OWN MULTIPLE ROUTES, SAYS HE CANT KEEP UP WITH VOLUME, LOVES BEING HIS OWN BOSS AND WOULD'NT HAVE IT ANY OTHER WAY.

THERE WILL BE A CHANGE IN GROUND VOLUME IN THE COMING YEARS. ALTHOUGH I WORK ON THE EXPESS SIDE I WISH I HAD GOTTEN ON THE GROUND FLOOR WITH THE STARTUP OF FDX GROUND. i BELIEVE YOU WILL SEE A LEVELING OFF OF HOW MUCH GROUND YOU CARRY AND FDX. THE GAP IS CLOSING, WE ARE A PATIENT COMPANY, OUR NUMBERS TELL THE STORY.

 

[Anonymous Coward]

im ok with anything you would like to call me. (monte, mike, Anonymous coward) Do you have a view or an opinion on the subject Cold?? Or anyone elese? Seems like simple logic to me but maybe there are some variables that you have that I may have missed. I Tried answering your question, your opinion is valid and if nothing elese, Is a thought.

 

[tieguy]

Cold,
I tried giving you an educated explanation on my views. If a IC depends primarily on volume aloan to grow his or her business it seems like the the ground division is beefing up there network to handle much more volume. If you would like me to list the sorting facilities and hubs opening up in 2006 and early 2007 aloan I will.
I just see many customers switching over in the next few years to save money on there ground shipping. If I were going to guess I would see sales talking to some of UPS's larger accounts in the next few years. Fedex Express has been fortunate to be able to charge premium rates and not only increase volume but pull even further from UPS in the air and Intl markets. I just dont see how UPS will be able to keep ground pkgs when Fedex ground can charge much less and still turn more profit on the same ground pkg. People ship ground because it is the most inexpensive way to move goods. What would a bulk shipper like more than an even better price on there shipping?

Monte why do you think it is fdx domestic growth slowed so much this past quarter showing only a 1 percent growth on the latest earnings report?

 

[brett636]

Monte why do you think it is fdx domestic growth slowed so much this past quarter showing only a 1 percent growth on the latest earnings report?

Don't confuse him with facts.

 

[Anonymous Coward]

Tieguy,
Please let me take a shot at that..
Fedex ground volume increased by 4% year over year in the 2nd quarter not 1%
My last two post were about IC in the Fedex ground division. There are no IC working at Fedex Express.
Tieguy,
I think you may be confused. I think the 1% volume increase year over year in the 2nd quarter would be in the Express division, Not ground. I would also like to add that sales in the Express division is aggressively seeking international shippers, and not pushing for domestic air. If you look again at the latest earnings report you will see that the Intl volume grew by 8% year over year in the 2nd quarter. That would be a 9% increase in volume for Fedex express over last years 2nd quarter,which would also show they enjoyed the most volume growth out of all the operating companies under FDX. I hope this answers your question.

As a side note Fedex 2nd quarter numbers do not include the month of December. Peak volume for all operating companies will be included in the 3rd quarter. 2nd quarter ends late November.

 

[ok2bclever]

What would a bulk shipper like more than an even better price on there shipping?

Service and reliability.

Come back when you have all those proposed centers open in whatever year you finish building them if ever and operating and staffed with employees not suing you and then we can see if you can offer service and reliaibility, because price alone just attracts naive shippers and doesn't even keep them.

 

[scratch]

I second that, OKtobeClever, the Fredex gound service in my area is a joke. I got one customer that won't allow him on his property after several of his boxes were misdelivered all over town. He was looking for one vital shipment of tires that took two weeks to make a 100 mile trip. The "IC" said he had it on his truck for few days, just "forgot to deliver it", even though he had been there several times. I also noticed a DHL and Fedex Home Delivery vans sitting in the owners driveway during peak. What's wrong with this picture? As a company, we need to offer better service to keep our customers, after all, the customer should get what what they pay for.

 

[wily_old_vet]

There was a interesting post about poor service by Fedex ground on the Fedex board of Yahoo financials. Seems the persons package made it to the delivery center but never left the center for four days. Was delivered on the fifth day when the consignee refused it. Had the tracking number and a link to Fedex tracking, so it wasn't someone blowing smoke.

 

[Anonymous Coward]

ok2bclever,
those stations and hubs will not only be completed this year but will be in operation. So do I still got to leave? We all no there are many more in the future but we will face that together when the time comes. I did offer to post the areas in which they have been built.
I do have a question for you. What do you think any customer ows you or UPS? Customers are paying UPS for a service, not because "they love the truck" If they can get the same service or even better for less money, what will keep them around? Im sure you all have a story about how bad the Fedex Ground drivers are, and im sure some of them may even be true. The only problem Im having with it is that it seems so one sided. We both no the amount of drivers and ground pkgs that UPS handles on a day to day basis. If there are X amount of UPS drivers compared to FDX Ground IC and UPS handles so many more packages, How many more negative stories are there about UPS service? I know that is a good point, just wanted to paint a full picture for you. So again I will ask you, "what will UPS do to keep customers if there is another company that can perform the same service or maybe even better for less money?" I hope your not banking on service because my stock is going to go down the toilet.

 

[Anonymous Coward]

Wily,
Im sure that never happens at UPS. I ordered something for my truck last Tuesday from Weather Tech, and still havent had it delivered. Was supposed to be shipped 2nd day air and I received a tracking number in my e-mail. Who knows, maybe I will get it Monday. Im sure that im the exception to the rule. Just my luck, just glad it was for me and not a Christmas gift. Im sure Fedex ground isn't perfect, but either is UPS. Should I contact WeatherTech.com and let them no that thay should switch accounts because UPS screwed up?

 

[SpecialDelivery]

Can I get that tracking # from you and maybe help you get that parcel to you.

 

[spidey]

I am doing some work from home and have ETT pulled up as we speak. I'll be on for a few more hours. If you can post a tracking number I'll gladly look at it for you. We like a challenge here.

 

[wkmac]

Back in the mid to late 80's UPS purchased a large tract of land 25 miles north of Atlanta and at the time rumors were that UPS would build a slightly scaled down Consolidation Hub like CACH. Not long after purchase they graded off the land but beyond that nothing. It sat left useless for years until I think the late 90's when it was announced UPS Logistics would develop the property in a variety of ways. But nothing ever materialized with the months that followed. Scuttle butt floated within UPS and from outside sources around the community that UPS came in with a "our way of else" attitude concerning the property and thus nothing was ever approved for development. There really is a higher power UPS.

Finally after so many years of nothing UPS sold the property to FedEx who is now in the final stages of building a very nice and large ground facilty capable of servicing a very large and populated geographic area on North Central to West Metro Atlanta region and into the North Central to West Georgia area. I heard the FedEx folks weren't as demanding and condescending to the local community leaders. This building has great access to the I-75 corridor and a 4 lane direct route of less than 30 minutes to the I-20 corridor west of Atlanta. Major railheads are 25 miles south in downtown Atlanta and another major point little know just 20 minutes north in Cartersville Ga. Also a few 100 feet away is an airport already servicing large corp. jet aircraft and with a current runway extension would be capable of handling larger cargo aircraft (a rampway would be a piece of cake to build)however local leaders and FAA state this will not happen as I've asked both of them directly myself. I'm not convinced this is the case as I've lived in this area for over 30 years and have heard this kind of thing before only to see it happen.

My point is to say do not discount what FedEx is doing at all because the infrastructure they are building is not only new but also more automated and easier to take advantage of in the future to further automate it's internal processes. I know the company constructing the conveyor systems and I've drove by and seen the system from the street and it's nothing to laugh and joke at. At some point UPS will have to begin to invest massive amounts of $$$$ to upgrade and in some cases replace a lot of it's infrastructure it built during the 50's, 60's, 70's and even the 80's because of technology needs and the needs of a changing workforce. I would agree we seem in the driver's seat for now but I wouldn't get so cocky as to totally discount FedEx. I also own FedEx stock and have for several years and hands down FedEx has beat UPS as an investment. Some of it is fluff and a poor PR job by UPS and I'm betting some high ups at UPS don't think certain waste products they create stinks which adds to the problem but FedEx does have advantages like the one above for example that UPS does not enjoy. Worldport IMO shows we can automate and do it right but it's not cheap either.

Automation is very expensive and one of the driving facts that cause UPS to drag it's feet. UPS also makes the mistake of trying to do everything in-house which does have it's advantages but your ideas and processes are limited. Worldport was not in-house. Hint! Hint! Some things off the shelf can and do work better. That said however, UPS workforce is becoming more and more a burden on a variety of fronts and thus the difference cost wise between automation and non-automation is coming to an intersect point. UPS will never altogether eliminate people but some of it's internal processes could be made a non-human function. Loading and Unloading will never be non-human but everything in between could easily be. This is not an "IF" but "WHEN" IMO and FedEx has begun to see the light and act on it. "IF" FedEx can get density and cure some of the service problem that they face as well as outrun the legal issues concerning IC's, some of you crowing roosters here might find yourselves staring at a flour bowl and hot frying pan along with many of the rest of us who never saw this coming! As we say down south, "Don't Get Uppity Just Yet!"

JMHO and a realist UPSer

 

[Anonymous Coward]

I am doing some work from home and have ETT pulled up as we speak. I'll be on for a few more hours. If you can post a tracking number I'll gladly look at it for you. We like a challenge here.

will you ignor my name and address?

 

[Anonymous Coward]

special delivery and spidey,
Thank you for offering to help find my package. I think customer service can help me on this one. Dont they get payed the big bucks to handle complaints, your off the clock so enjoy your time off. Thanks again for your concerns. Im going to go back to our main topic, think I last was speaking with Wily.
Wily,
there is no doubt that service is a huge factor in a customers choice in shipping. That is how the Fedex Express division has become the largest express carrier in the world. Express has always had the highest rates in shipping but continues to grow every year because of its reputation and service. They are under more scrutiny because everything that runs through there system is either of high value or time sensative. Its very important for them to get it right the first time because people are paying premium rates for express service. Tieguy was under the assumption that domestic was down in the express division. Think he stands corrected. If he looks even deeper into the earnings report he will see that over the last year they have been slowely disolving the 2nd and 3rd day for more profitable overnight and Intl packages. I think we can both agree that people ship ground because of its low rates and and ability to track there shipments. Try to think of one of UPS's Larger shipping accounts. If they can get ground shipping at a much better rate, (were talking millions) what is going to keep them from switching. The customer saves money on operating cost and improves there bottom line. Isnt that what companies are in business for? Turning a profit? To make the deal even sweeter for Fedex ground is that they turn a higher profit than UPS, even with the huge discount, and IC are happy because that leads to more volume which = more $$$ for them. Just my opinion, would like to hear yours. thanks

 

[Anonymous Coward]

tieguy,
I took the liberty in fiding some more information for you.
``There was volume growth, but these results were driven by yield improvement and operating-margin improvement,'' Broughton said. ``We also saw productivity gain and more packages moved per employee.''

FedEx raised rates during the quarter by 3.5 percent, on average, for FedEx Express and 3.9 percent for FedEx Ground. The company also sought to cut back on two-day or three-day ``deferred'' shipments by FedEx Express in favor of more profitable overnight Express and Ground services, Broughton said.

FedEx added ``deferred'' delivery to its overnight Express network before the company began a major expansion into trucking with FedEx Ground, ``and it doesn't fit neatly now into either of those operating systems,'' Broughton said.

FedEx said revenues for Internal Priority shipments grew by 14 percent, while overall revenues for FedEx Express and Ground increased by 11 percent.

The growth for FedEx Express is largely due to an intertwined system of shared resources for its domestic and international operations, said FedEx Chief Executive Frederick W. Smith.

``You have to look at Express as a worldwide network even though we have to report it as 'domestic' and 'international','' Smith said. ``It's really a single network.''

 

[ok2bclever]

ok2bclever,
those stations and hubs will not only be completed this year but will be in operation. So do I still got to leave?

Gee monte, you need to quit changing your claims.

You just finished saying these operations would be opening in 2006 and 2007 and now you say they will be completed and in operation within a couple of days which is all that is left in this year.

Come back with whatever your next claim is I guess.

Wkmac, there is a difference between simple facts and crowing.

And there is nothing wrong with being proud of the company you work for.

rps, errr that "one company" fedex ground is inferior in service to UPS.

monte is always going on about "if" rps could give as good and reliable service and for less money . . . it's the same ole if pigs had wings crap.

Perhaps they will improve, perhaps they won't.

It's much easier glossing over the obstacles in their way such as density, service and the myriad legal issues at various levels in a sentence than in the real world.

As long as UPS takes care of their own business fedrpsex will remain in second place.

I would agree fedex stock has been and probably will continue to be a good investment in the near future.

Long term is less foreseeable.

As far as automation and modernization I agree.

Those things are great equalizers, but the telling point is UPS can afford them far more than fred can.

So again, it's a matter of UPS internally taking care of business.

If UPS can just get some forward thinking individuals high enough in the corporate structure rather than pure bean counters who only worry about the share price of today we will do fine.