FedEx stock performance

[It will be fine]

They have the ability to buy out contractors and their trucks. They could even offer employment. It's not impossible just expensive. The company needs a major overhaul and combining the OPCOs is the most solvent way for the future.

What would be their return on that investment? They’ve already indirectly paid for all my trucks, now you think it’d be a good idea to buy them from me?

They could get the same productivity increase without the capex by just giving me all the express work. Their choice is spend a few billion or not. I think they’ll choose not to.

 

[MAKAVELI]

What would be their return on that investment? They’ve already indirectly paid for all my trucks, now you think it’d be a good idea to buy them from me?

They could get the same productivity increase without the capex by just giving me all the express work. Their choice is spend a few billion or not. I think they’ll choose not to.

Maybe you didn't notice that Express employees got significant raises while you contractors got nothing. They've already tried to give some of our deferred freight to contractors and that has failed. Why would they throw good money after bad?

 

[bbsam]

Mak, IWBF is simply scared of the fact that he could very well find himself on the outside looking in especially if they were to bring in this bare knuckles outside CEO who the board has entrusted with the task of reforming the entire company. Converting to company employed rivers can be done on a region by region basis.

Put together a group of zips and tell contractors " Those contractors who operate in the following zips will have their service agreement terminated on a certain date. Delivery, pickup and related duties will be assumed by company employed drivers. Those contractors and contractor employed drivers affected can if they wish to do so apply for company positions . Contractor owned vehicles that meet condition and appearance requirements will be purchased by the company at book value"

You simply go region by region. Yes, you will have a significant charge against earnings for a number of years but given that they ain't going to make any money with the damn poor setup they've got now while it's certainly not the best time to do it , that time has passed them by it might very well be the last chance they have to do it.

It goes with out saying that you'll never get the dependable consistent high precision service out of a bunch of contractors each of whom has their own unique service area and the troubles that go with it. For example the woman at the terminal I was at just 3 years ago badly overpaid for routes. Overwhelmed by the problems that went with it she loses her contract in just 3 years. However she did have a payment formula that allowed he drivers to earn in the range of up near $30 an hour.

So now the next new unsuspecting slug comes in and takes over. He offers her well experienced route savvy drivers $17 an hour with zero benefits. Their reaction?...."Hasta La Vista baby".

I’d see it more like a rolling buyout. Pay the contractors very well for the next 5 to 7 years to remain active as the company starts converting buildings. May as well start with the open contracts nobody wants.

There’s no clean and easy way to do it but it won’t get any easier down the line.

 

[bbsam]

Maybe you didn't notice that Express employees got significant raises while you contractors got nothing. They've already tried to give some of our deferred freight to contractors and that has failed. Why would they throw good money after bad?

They gave the significant raises to Express by taking it from contractors.

 

[bbsam]

What would be their return on that investment? They’ve already indirectly paid for all my trucks, now you think it’d be a good idea to buy them from me?

They could get the same productivity increase without the capex by just giving me all the express work. Their choice is spend a few billion or not. I think they’ll choose not to.

The return would be keeping contractors in the loop as the transition occurred.

 

[Fred's Myth]

They gave the significant raises to Express by taking it from contractors.

Which shows you where their priorities lie.

 

[MAKAVELI]

They gave the significant raises to Express by taking it from contractors.

It has been the other way around for years. FedEx plays a shell game with compensation for both Express and Ground

 

[It will be fine]

The return would be keeping contractors in the loop as the transition occurred.

Many contractors are only sticking around in hopes of an increase in equity value. If they start to transition to an employee model that equity is gone. No contractor would invest in equipment and unless cash flow improved significantly most would walk. The network would collapse well before a meaningful transition could take place.

 

[MAKAVELI]

I’d see it more like a rolling buyout. Pay the contractors very well for the next 5 to 7 years to remain active as the company starts converting buildings. May as well start with the open contracts nobody wants.

There’s no clean and easy way to do it but it won’t get any easier down the line.

If they were smart they would follow a plan like this. But I wouldn't count on management making a well thought out plan.

 

[MAKAVELI]

Many contractors are only sticking around in hopes of an increase in equity value. If they start to transition to an employee model that equity is gone. No contractor would invest in equipment and unless cash flow improved significantly most would walk. The network would collapse well before a meaningful transition could take place.

There's no easy way out of this mess that Fred and Raj created.

 

[thedownhillEXPRESS]

Which shows you where their priorities lie.

Well Express is the oldest child so that’s not a shock. Great super bowl commercials, Cast Away, actual customer service. That was all Express. If it comes down to it that’s gonna be the last man standing during a corporate collapse.
While Ground was a cash cow for awhile, the reputation of criminal and half sentinent beings appearing like zombies in the neighborhood to deliver one’s dog food kind of cut into all of that good corporate pride.

 

[bbsam]

Many contractors are only sticking around in hopes of an increase in equity value. If they start to transition to an employee model that equity is gone. No contractor would invest in equipment and unless cash flow improved significantly most would walk. The network would collapse well before a meaningful transition could take place.

If the money was good enough, I’d stay. Say current rates + $400k per year.

But as I told our senior manager earlier this year, don’t expect me to hand over a “turn key” operation with well trained drivers and vehicles at the end.

 

[cosis]

I almost never see regular FedEx anymore, just ground. I used to see them all day long.

I mostly see ups. Sometimes ground but never express

 

[tourists24]

This is possible. Now consider making it profitable.

How many Express and/or Ground drivers can come anywhere near UPS driver performance levels? Maybe 10-15%? That’s assuming that the company would pay them enough to want to stay.

Is the performance levels that much apart? With the 340 methods that UPS demands I guessed that would tilt things a little more favor of Fedex (when you use them it slows a driver down).

 

[It will be fine]

Is the performance levels that much apart? With the 340 methods that UPS demands I guessed that would tilt things a little more favor of Fedex (when you use them it slows a driver down).

No they’re not that far apart. I had a guy try out UPS for a bit, he came back. He said all their methods drove him crazy with how long they took. That and UPS only working him 1 or 2 days a week were what brought him back. Our drivers should be more productive just from an incentive perspective. They get paid the same if it takes 6hrs or 10, so they get done in 6.

 

[It will be fine]

Well Express is the oldest child so that’s not a shock. Great super bowl commercials, Cast Away, actual customer service. That was all Express. If it comes down to it that’s gonna be the last man standing during a corporate collapse.
While Ground was a cash cow for awhile, the reputation of criminal and half sentinent beings appearing like zombies in the neighborhood to deliver one’s dog food kind of cut into all of that good corporate pride.

Express has its place. That place is actual priority shipments and the international market. Run of the mill domestic freight should all go through Ground.

 

[Fred's Myth]

Express has its place. That place is actual priority shipments and the international market. Run of the mill domestic freight should all go through Ground.

And both opcos should be combined in an all employee system, eliminating redundancies in facilities, equipment, and personnel. With a CEO who’s not terrified of unions.

 

[MAKAVELI]

Express has its place. That place is actual priority shipments and the international market. Run of the mill domestic freight should all go through Ground.

It's highly inefficient to run two separate systems regardless. UPS does it all in one truck. More efficient less fuel better for the environment better all around.

 

[It will be fine]

It's highly inefficient to run two separate systems regardless. UPS does it all in one truck. More efficient less fuel better for the environment better all around.

UPS has air drivers, they have first priority drivers. They don’t do it all in one truck every time. FedEx could provide a superior service with Express separate if done correctly.

 

[MAKAVELI]

UPS has air drivers, they have first priority drivers. They don’t do it all in one truck every time. FedEx could provide a superior service with Express separate if done correctly.

They have air drivers like Express has part time drivers. For most full-time drivers have every service on their trucks. You have no clue of what you're talking about.