I did some more calling around to people in FedEx Corporation I know regarding the whole topic of shifting around services and maximizing margins on packages, and found out about a pilot program in Office that is real interesting.
FedEx Office is trotting out a program (called "Cheetah") whose goal is to allow customers who are currently using Express service to move around docs within their local area, to instead get same day delivery if done through FedEx Office.
The customer would have to tender their docs or small packages by late morning, then each Office location would do a "sort" on those pieces and divide them up between those that were in the immediate area of the local Office store, and those that were in areas of adjacent Offices stores. Then the local area pieces would be delivered by early afternoon - the non local (think in terms of a major metro area as being the combined service area) would all be brought to a central location where each local store would "swap out" their volume going to service areas of other Office locations. Then the driver would bring back the volume from the central swap, then another cycle of deliveries would be done accomplishing same day delivery across a large metro areas.
They aren't talking just the confines of a single large city (15-20 mile radius), they are talking about a service area with a radius of 50-100 miles.
This is an enhanced version of inter city bicycle messenger service, it will cover in essence the same area as a local level broadcast television station in terms of footprint.
Do you think this will cannibalize volume from Express? You're damn right it will.
Do you think they are going to use existing "Express" assets to pull this off? Not a chance, Express has too great an overhead to it.
What FedEx Corporation is planning on is that the cannibalized volume from Express can be offered at a lower price than Priority Overnight service (delivery in zone), give customers same day delivery (and if tendered in the service area of the local Office store, delivery by early afternoon of the same day) AND make a greater margin on the transaction than if customers used Express Priority Overnight service. It is all about margin per piece.
For FedEx Corporation (if they can pull it off and the tests prove successful), it is a complete win.
For the employees of Express, it is just another step along the road of their "career" being delberately made obsolete by the very company which currently employs them (speaking about FedEx Corporation, the company which "really" employs FedEx people - you cannot buy stock in "FedEx Express").
Can Express employees do a lateral transfer into a position doing this task? No, you are barred, since you work for a different opco. You'd have to terminate your employment with Express, be accepted as a new hire at Office and start at the very bottom of progression.
Do you think they will pay even remotely the same as Express is getting paid right now? Hell no, the pay scales for these drivers are a few bucks an hour less than the starting wage for a Courier and their progression prospects are even worse than Express currently is.
People, you need to pull your heads out of the sand and look around you and see what is happening. Express is being seen as a "Legacy" corporation within FedEx now, FedEx Corporation is where the decisions are being made. Do you think the execs that are within "Express" had any say in this? No. They know of the programs and they know that maximizing margins and profit for FedEx Corporation is the primary goal, NOT trying to maximize revenue within the opco they happen to be working "under".
As an Express wage employee, you are seen as a liability now, NOT an asset to the company. From FedEx Corporation's standpoint, you are overpaid and underutilized. The "vision" is looking at getting 20-somethings for between $11 and $15/hr, work them for 5 years, offer management positions to the most "talented" and have the rest quit after 5 or so years, or be left in a dead end position.
None of this is accidental or coincidental - it is deliberate planning on the part of FedEx to gradually transform the company into a lower labor cost, higher piece margin corporation, while gradually shifting volume away from the "Legacy" company of Express, towards other opcos where greater margins can be realized.
