Another key indicator is the way they are mauling the healthcare and pensions plans of it's blue collar workforce a clear and undeniable attempt to divest itself of legacy costs and an easy way to do that is shift as much as possible in an orderly manner over to Ground then wait for more industry deregulation and if they get it shift the rest over to them. You are correct when you speak about contractors having to burden themselves with the cost of having to keep a battalion size fleet of spare trucks around and a half mile long list of spare manpower who would be willing to come out on a moment's notice to handle spikes. But X ain't going to worry about that. They've got somebody else to do it. Ground's sheer economy of operation will be the driving force going forward made even more so by the new so called "negotiation" process whereby they can compress contractor margins so low to the point where the contractor finally cries out in agony tells X to go pound salt then calls the bank and tells them to send somebody over to drive away the trucks.
Ground to absorb Express
- Thread starter dvalleyjim
- Start date
Gone fishin
Well-Known Member
I also heard a rumor that Fred has invented a teleportation machine and will now have no use for any of you. Thanks for playing
Reducing labor costs will continue to be at the top of the corporate agenda.
Route 66
Slapped Upside-da-Head Member
Well, they've certainly done one hell of a damn fine job of confusing me anyway.
The Youngin' Of It All
Well-Known Member
Bacha, I already have started incorporating this process within my own business. My target market for recruiting is to find people who reside closer to the areas of my routes or in the towns precisely. If they already have a sense of the area from living in or near it, that's half the battle and then all I have to do is simply teach them the scanner. A majority of problems I have witnessed in my hub and I'm sure many others have been part of it is getting random people, especially who are not from the area and teaching them the scanner, overall landscape terrain, P&D specifics with customer drop points, and even in some cases getting them comfortable with the truck, all on $600 - $700 a week. I will not mention how much I pay, but I take very good care of my guys. It's been two weeks since I've had any customer service mail or issues and when I do we rectify it right away with each other to solve the problem. I'm very involved with my guys and they do a phenomenal job meeting my expectations. Going back on subject, think about it this way, FedEx is telling you what's coming without actually telling you face to face. Why do you think they have added ELDP as an option? Because they know it will be absolutely impossible for your top drivers to run 6 days a week (If they even wanted to) without violating D.O.T. hours or getting burned out. Trucks? I own 6 routes, so why would I want to have 8 trucks instead of 7? Call it a mismanagement of money or stupid, but it's for 2 additional advantages. Making money on the rental from another contractor or to run extra unexpected volume. If I maintain my trucks in tip top shape for peak, now I don't have to pay for Penske rentals like I did for the past peak seasons that I have been a contractor and am able to add more revenue to my business, which ultimately means I have reduced my costs, just like X is trying to do too. It goes hand in hand both ways.
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Future
Victory Ride
Holy Christ!
Good job >Those rentals just ate you up especially Uhauls. Oh sure they plaster all over their rentals cheap rates but when you factored in the hidden charges it came out to a buck or more per mile. And Budget charged 70 bucks delivery charge. Although I was a single route whenever I got a new ride I kept the old one around. Last fall when peak season rolled around I said to the ctr's the 3 or 4 who remained..."look truck dealerships are overflowing with inventory cutting prices and interest rates will never again be this low. get some new equipment now". Then again I was just a 23 year day 1 ctr was there 12 years before the first of the remaining ctrs arrived so I didn't know anything in their estimation. So low and behold the Fed comes out last week and said that there could be as many as 4 rate increases this year alone. Running 6 days a week? I ran 6 days year round never missed a day for nearly 6 years because they were short at least 2 HD ctrs. No question it was a contributing factor to in the end having to have both hip joints replaced. That extra truck around was always a relief to have. In my area getting a rental on the spur of the moment nearly impossible. Extra manpower. With so many boomers going into retirement not as well situated as they would like but don't need immediate full time family sustaining employment may provide you with a pool of call out drivers looking for some walk around cash. There may be some gray on their heads but still in good enough shape still able to deliver a decent day's work and won't demand top dollar.
Ground drivers are ALL employees already. Express can keep everything they do already and still transfer all packages without a specific time of day guarantee to ground very simply.
MAKAVELI
Well-Known Member
When I say all employees, I mean cutting out the contractor.
59 Dano
I just want to make friends!
ABX had a majority contractor delivery force and limped along with its air service. It added a ground program, which helped. DHL bought them out in 2003 and eliminated as many non-contractor delivery operations as possible. It invested over a billion dollars into improvements in infrastructure and operations. It collapsed in 2009.
Ground ops and air ops are 2 completely different animals that operate in completely different ways and Ground guys need to realize that.
It will be fine
Well-Known Member
Box arrives in town. Box gets to our terminal. Box goes on truck. Box gets delivered. What's the big difference if box gets to town on a plane or a truck?
The Youngin' Of It All
Well-Known Member
If UPS can do it why couldn't FedEx? Difference is costs, which I keep having to repeat myself over and over about in this thread. X has obviously redesigned this model to structure it to their benefit, reducing costs, and hoping to avoid a repeat in getting sued all over again. They are tired of it. Plain and simple. With all the people who have invested in getting to scale at this point, why would they all of a sudden close the doors to the cash cow? What would that lead to? More lawsuits and lawyers over contractor and employee law. Bigger sums of money in payouts, which they will just get from sending more Freight through the Ground system to make up for it. And besides, from the customers point of view they're not going to care which carrier delivers it as long as they get the package in the end. Cutting out the contractor and becoming unionized wouldn't be a bad idea from someone who is ALREADY and employee; however, that's not how it works when other's have invested with much to lose.
The Youngin' Of It All
Well-Known Member
You seem to have an idea how I operate then. The only difference is I am you then right now in terms of my time there as a contractor. I may be young, but I'm not stupid. Instead of investing in the young, lazy, and entitlement generation it's not always bad to invest in the old underdogs. Sure they may not be the fastest, but if the quality beats the quantity and they're not complaining about the work or pay then that's okay with me. As long as I don't have to deal with management about contingency situations, I'm all for it. I can easily tell you in my business alone more incidents easily were outweighed within my younger drivers versus my older ones. Why do you think that is? Because they are in a rush to finish as fast as possible and don't care what they do to the trucks (garbage, hitting yellow poles, etc.). If it's not their's why should they care? I exposed those points in day 1 to all my new drivers and tell them you treat it like your car or there will be problems going forward. I think I made my points clear because I haven't had too many issues since.
I am happy to see that you understand the need for redundancy and are willing to spend the money to acquire and retain it.Yes it hurts the bottom line but you have to do just about anything to get them (X) off your back. As for your other question. The older worker is more conscious of their mortality. Not inclined to take risks not only to themselves but to their employer. Laying around some old beer joint all night and all weekend is something that they may have done in the past but no longer interests them. Their maturity provides them with a greater sense of duty and obligation. Interesting story. A few years back we had a retired US Army veteran and Army civilian employee ( heavy truck mechanic) who out of the goodness of his heart decided to help us out. He was in his late 60"s. The terminal manager sent him and 6 other guys all half is age or less over for physical and drug testing Of the 7 only 1 passed. You know who that 1 person was. The difference between older and younger worker? Judgement, pure and simple.
whenIgetthere
Well-Known Member
And that has been going on for years, as well. Usually when the rent gets too high, they bail and break a station up.
59 Dano
I just want to make friends!
Go ask the guys who went broke with that attitude.
It will be fine
Well-Known Member
I'll take that as you have no idea what the difference is. Thanks for playing.
Speed. Ground might take over bulk of deliveries but there will always be a need for overnight service that's out of reach by truck. FedEx could certainly pare down it's fleet and Express staff. What I don't expect is FedEx to keep the status quo because that's the way they've always done things. They'll keep at it until they come up with a system that maximizes profit and keeps them out of court as much as possible. Everyone who thinks this will happen very quickly should keep in mind that FedEx has been working towards this for decades now. Not something you can just jump into.
Biggest difference Deutsch Bank invested a billion dollars, when they realized to build a UPS/Fedex infrastructure it was not a billion but billionS of dollars more to compete, they abandoned it. FedEx already has the infrastructure and billions into it. This is an apples and oranges comparison in regards to fianancials, existing market, existing infrastructure, and pre existing market share.
Fred's Myth
Nonhyphenated American
Or perhaps FDX is simply building both infrastructures to accommodate anticipated volumes from the TNT acquisition, the new Fedex Fulfillment Warehouses, and the increasing Internet Marketplace. No need for hyperventilating, Ground folks.
