An interesting article in the papers

[Anonymous Coward]

ok2bclever,
please dont read or comment on my post. This stuff is way over your head. I cant help it if you dont know there are only 6 days left of this physical year. You told me to come back when and if these hubs ever open. I did say they would not only be finished in 2006 but will be in operation. Ill even help you, check out post 17 line 5 (oh yea, under "An interesting article in the papers" dont want to confuse you) I wish to speak with people of intelligence. You are welcome to follow along. Please dont post unless you have someone helping you.

Im aware of the % of Ground IC taking Fedex to court to become employees like the express division. With all the money making opportunities the IC will have in the near future I will argue that Express employees are more likely to go to court to become IC.

 

[montecarlo12]

ok2bclever,
Instead of getting defensive and upset why not see if what anonymous is saying is true. I saw something on Fedex.com that seemed to support his "claims" click on press releases and scroll down to October 24,2005. All facilities have state of the art scanners and cameras. In the article Fedex Ground also predicts a 70% volume increase in the next 5 years. Hmmmm.

 

[montecarlo12]

wow, this thread got quiet. everybody cant still be reading the article.

 

[tieguy]

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.

Actually express has been seeing a loss of market share over the past couple of years but still holds a nice chunk of the overnight market.

Tieguy was under the assumption that domestic was down in the express division.

Supported by your recent earnings release. If you count the growth of international volume as express growth then you are correct. Your earnings statement list a 3 percent overall growth of all fdx volume. and a 1 percent growth of domestic. You built a new facility in hagerstown maryland. You have others going up along the eastern side of the US. a 1 percent growth rate will not fill those buildings up. Your folks did a nice job of increasing margins this past quarter. Investors and analysts are ecstatic over the margin growth and have so far ignored the dismal volume growth. I am curious to see how they would respond if UPS were to announce 5 percent or better growth on their next release. Not saying that will have just curious what would happen if they did.


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.

One thing would probably be the pricing games that fdx is playing with the rates they charge. Fdx offers lower published rates. When you add the gas surcharges and residential surcharges then fdx is actually higher then ups and dhl. Now that fdx announced such healthy margins the analsysts will start asking how they got those margin increases. There was a nice article out last week where one analysts pointed to the fuel surcharge as a big contributer. Your large shippers are savy enough to figure out what kind of games fdx is playing with its surcharges.

"The major contributing factors were the fuel surcharges, which have really helped revenue growth ... and pretty strong volume growth in the international business," said Zacks Investment Research analyst Ann Heffron. "It was a very strong quarter."
Hatfield said that the company is doing a very good job at managing revenue growth and keeping costs in check.

 

[wily_old_vet]

No were just letting you fedex guys pass your gas.

 

[tieguy]

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.''

Coward I did find this quote interesting. A company showing significant growth is too busy hiring enough people to cover the volume growth to be working to improve productivity. You generally see this type of response during recessions or with companies that are stagnant in growth.

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.

Coward nothing particularly surprising here. The whole industry is doing much of the same. Fdx would never do so unless there was a financial incentive to doing so.


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

Single biggest contributor to fdx growth this past quarter was the international growth.

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.

LOL. Fred wishes it were so. The international is growing. Your actually losing market share on the domestic side. The international will continue to grow. You will continue losing market share on the domestic side. Just like UPS will continue losing market share on domestic ground.

 

[tieguy]

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.

I am surprised that we appear to have two different fdx employees here who seem to be oblivious to all the volume they have lost to UPS this year. This past peak I picked up approximately 5000 pieces of air a day from two large shippers who shipped all their air with fdx last year. When I say a day I mean 7 days a week since both shippers worked evey weekend in december prior to peak. We have a large fdx building in hagerstown maryland that has been open for approximately 9 months and can't touch any of the large shippers in that area. In fact we did a service lane enhancement for the entire hagerstown, frederick, chambersburg , harrisburg area that has resulted in a significant increase in volume for the entire area.

coward I quoted press releases from wednesday of last week that stated fdx grew its overall volume by 3 percent for the quarter primarily driven by an increase in international volume. Domestic volume growth was listed as 1 percent. Last year and the year before you were hitting domestic growth results of 10 to 20 percent per quarter. This growth was the catalyst for your stocks growth last year. Your latest earnings report sounds like the kind UPS put out last year that was getting yawns from investors. Record profits , good international growth, little domestic growth.

 

[tieguy]

The question I have is what is the purpose of the fuel surcharge. I thought it was to cover the cost of fuel increases. It appears though that Fred S is using it as another means to increase profits. If so the smaller shipper may not catch on so quickly but the larger ones will figure it out.

 

[montecarlo12]

wow tieguy,
you have been busy so much to correct you on. Give me a time frame in lets say the last 10 years where Fedex Express has had a loss in domestic volume? We can check that out from quarter to quarter.

I take it you have read the article, Fedex ground will start picking off large accounts early this year. (2006 for ok2b) Yes you are correct about all these extra charges, Its crazy what fedex Expresss can charge for service. Seems like customers are willing to pay top $$ for top service. I dont know if you are the correct person to ask reading your profile, but why would you go after big accounts before your network could handle the volume. 70% volume increase in a 5 year span is quite a jump. What a problem to have, cant put up buildings quick enough. We wont have to wait to long to see If it all pans out.

 

[tieguy]

I take it you have read the article, Fedex ground will start picking off large accounts early this year. (2006 for ok2b)

Interesting concept. My point being that while fdx was hitching up their pants and rolling up their sleeves UPS was actually taking some very large shippers from fdx. I'm sure fdx will be competitive I'm sure they may even take some accounts from ups from time to time. But I see some clear signs that fdx is losing significant volume to UPS which was even reflected in the earnings statement and I don't see anyone responding to how fdx could grow the business so little in the past quarter.

Yes you are correct about all these extra charges, Its crazy what fedex Expresss can charge for service. Seems like customers are willing to pay top $$ for top service.

I sense some sarcasm here. I don't think its so simple as you state. i believe many shippers may not be aware of all these extra charges until they sign up and then start getting zapped with them. Shippers will not pay exhorbent amounts for shipping packages. In your express market some will because of the urgency involved with the shipment. In the ground they will not. They will not pay top dollar for your RPS based delivery service. They will not pay for your different driver for each service.

I dont know if you are the correct person to ask reading your profile, but why would you go after big accounts before your network could handle the volume. 70% volume increase in a 5 year span is quite a jump.

Fair question . What I don't understand is why you have the hagerstown building if you're not trying to fill it up? Its been open what about 9 months now?

What a problem to have, cant put up buildings quick enough. We wont have to wait to long to see If it all pans out

Thats the point though you do have some buildings you have opened as part of your 5 year plan and yet your not filling them up. Its very expensive to build buildings and not use them? I guess the question I am asking is what are you waiting for?

 

[montecarlo12]

tieguy,
just took a look at earnings reports on Fedex.com. I cant seem to find anything showing your claim to lost market share in the Fedex express domestic or intl markets. You can look at each quarter going all the way back to (1998).

Your claim that Fedex (never clarified if you were talking about Fedex Express or Fedex Ground) let a online shipper "Lands end" down by not accepting anymore packages two weeks before Christmas was a flat out lie. Any one who wants to check for themselves can go to Landsend.com. If you click on shipping you can see what options that they offer. I gave you the benefit of the doubt so I sent an E-mail asking if they offered shipping from any other carrier and the response was no. Cant believe you didnt think I would check this out. Who knows, Lands End might be one of the large accounts Fedex Ground takes this year. 70% volume increase in 5 years is going to be a tuff. That would be a nice start.

 

[over9five]

"..let a online shipper "Lands end" down by not accepting anymore packages.."

I can guarantee you that is exactly what happened at LL Bean. Fedex couldnt handle the volume, and we went in and rescued them.

Perhaps that is who Tie meant?

 

[montecarlo12]

over9five,
That is big of you to cover up Tieguys story telling. LL bean huh?? you sure.
Fedex Express only delivers overnight and 2nd day Bean packages. We used to deliver a 3day service called express saver which we no longer offer. (not nearly as profitable as overnight) Fedex express had another great peak. Not only did we get everything off before christmas but we honored commitment times all the way up to 12/22. Our customers got what they paid for. Thats not a shot at UPS employees either, everyone no how hard you guys work. All our express saver packages went to Home Delivery and Fedex Ground. They also had no problem. Fedex Express has an agreement with the USPS called Fedex Smart Post. (Not to be confused with Parcel Direct) LL Bean sends packages through the Express network with a Fedex Ursa label containing the recipients address and a separate address of the closest post office to that house. The last three years we were asked if we could deliver to the house instead of the Post Office where the mail man would normally deliver to the final destination. That starts about the second week of December. Im gonna have to check that out over9five. Tieguy, how about getting us the UPS account number for LL bean...thanks

 

[montecarlo12]

over9five,
LL bean ships only with Fedex and USPS. If you prefer shipping by UPS you can call your order in by Phone. You would have to specify delivery by UPS and either charge it to your credit card or UPS account number. If someone can tell me how I can post the conversation I would like to put it up for everyone to read. thanks.

Ok, wasnt "Lands End" or "LL Bean"....

 

[toonertoo]

Monte, save to documents then hit manage attachments??

 

[montecarlo12]

thank you toonertoo,
I will give that a try.

 

[tieguy]

tieguy,
Your claim that Fedex (never clarified if you were talking about Fedex Express or Fedex Ground) let a online shipper "Lands end" down by not accepting anymore packages two weeks before Christmas was a flat out lie.

Monte take a chill pill. You can call me a liar all you want. I'm not here to prove myself to you. I'm not here to score message board brownie points over the fdx guy. I told my ups friends here more than the fdx guys what kind of peak we had and about some of the successes we had.I might even be vague about some of the details just to keep you off balance. But I was in a high enough level meeting discussing these type of issues and I know what was going on. I'm really not interested in getting in a debate with you about fdx. Especially if you can't even be half way honest and admit the fdx ground x-rps drivers suck. At least my friends who are fdx management can do that much on their own.

 

[tieguy]

over9five,
That is big of you to cover up Tieguys story telling. LL bean huh?? you sure.

Monte you're really trying too hard here. No matter how hard you try to debate the issues here you can't talk fdx out of the dismal quarter results they had. Their overall volume growth of 3 percent was less then the 4 percent the economy grew at. Its nice to see your loyalty towards fdx. But you're really selling your message to the wrong folks. We don't have too many fdx investors here.

 

[wily_old_vet]

Monte-Didn't realize how nice it was on here while you were gone. If your purpose on here is to make all the UPS feel bad about how well Fedex is doing at our expense it won't work. We are out there in the real world and see the truth. Do we have failures as a company? Yes but so does Fedex. As far as you taking 70% of our volume in five years, that's a great goal, but that's all it is a goal. It will never happen. Why don't you go over to the fedex boards and celebrate witha all your fellow Fedexers? Maybe because there isn't any celebrating going on there. Everytime I go to Fedexaminer the majority of posts are very negative in their opinions of Fred and his company. You probably would get a worse reception than you do here. Keep on blathering Monte, we'll listen and respond.

BTW if LL Bean did contact UPS and ask us to pick up what Fedex couldn't handle during peak, it is highly doubtful that the information would have been given to customer service reps for the phones as it was a temporary situation (but who knows maybe permanent soon).

Also please don't ask me not to respond to your posts as you did ok2bc as this is our board not yours.

 

[tieguy]

"..let a online shipper "Lands end" down by not accepting anymore packages.."

I can guarantee you that is exactly what happened at LL Bean. Fedex couldnt handle the volume, and we went in and rescued them.

Perhaps that is who Tie meant?

Never know Over9. Could be both are coming over to the brown side.