MAKAVELI
Banned
To siphon enough volume from Express to make it profitable will be.
Last Mile
- Thread starter AB831
- Start date
It will be fine
Well-Known Member
It’s profitable to have express deliver the packages. The cost is even lower to give it to Ground. How do you think that results in lower profits?
McFeely
Huge Member
I'm legitimately curious how much money the company saves by getting these packages off planes and into trailers and delivered by FXG. I've been picking up 2-3 a day during my pickups, and maybe our entire station has 50 outbound each night.
If the company saved $1 net per package in labor/jet fuel/other expenses on every package and they do 100,000 of these packages a day? That's $100,000 saved, or in theory, extra profit for Express (which goes to shareholders and FS yay!). Anyway, just spitballing on those numbers but a daily amount saved could end up being a pretty good chunk of change in 12 months' time. And if sales can sell that free cargo space now available on the planes to high dollar shipments, even better (I lol'd typing that last line).
Not that Express drivers will see any of it, especially with the crazy talk of running 2 sorts and further ruining any efficiencies we can muster on road.
If the company saved $1 net per package in labor/jet fuel/other expenses on every package and they do 100,000 of these packages a day? That's $100,000 saved, or in theory, extra profit for Express (which goes to shareholders and FS yay!). Anyway, just spitballing on those numbers but a daily amount saved could end up being a pretty good chunk of change in 12 months' time. And if sales can sell that free cargo space now available on the planes to high dollar shipments, even better (I lol'd typing that last line).
Not that Express drivers will see any of it, especially with the crazy talk of running 2 sorts and further ruining any efficiencies we can muster on road.
59 Dano
I just want to make friends!
If the company saved $1 net per package in labor/jet fuel/other expenses on every package and they do 100,000 of these packages a day? That's $100,000 saved, or in theory, extra profit for Express (which goes to shareholders and FS yay!). Anyway, just spitballing on those numbers but a daily amount saved could end up being a pretty good chunk of change in 12 months' time. And if sales can sell that free cargo space now available on the planes to high dollar shipments, even better (I lol'd typing that last line).[/QUOTE]
From FY19 annual report...
Deferred freight accounted for just over a million pieces of freight per day, $4.2 billion in revenue for the year, and collects just over $15 of revenue per piece.
They're going to save well beyond a buck a package on those. They're resis, and it will be rural areas that are most affected. The Express expense for these will be the pickup, PM sort at the origin station, and transportation to the ramp.
People are overreacting.
McFeely
Huge Member
Informative. I hadn’t looked up the numbers. But even on the low side, $100k a day adds up. If the actuals are 5x or 10x that, it’s huge.
I still don’t think they plan on taking care of the Express couriers. They’ve shown that already for years.
Cactus
Just telling it like it is
You just fear you’re gonna lose your meaningless job. Why they keep a used diaper like you around is beyond me.
59 Dano
I just want to make friends!
They're shooting for much more than $100k a day and it shouldn't be too hard to accomplish once the LMO rollout is complete. In fact, $100k/day wouldn't be that much relative to the size of Express. Total Express operating expenses are $35 billion. Like you, I don't know what the target is or what the "worth it/not worth it" metric is. As of now they plan on focusing on those packages in PM areas where there's low volume and lots of driving (usually done by higher paid employees). It's a significant operational change and they expect it to yield significant results.
That said, it's not the be-all, end-all of changes. Others are coming. Richard Smith is going to be very busy over the next couple of years.
Depends on what you mean by "take care of."
AB831
Well-Known Member
Oh, they plan on "taking care" of them alright.
MAKAVELI
Banned
Right now it's just theory. They haven't proved it's saved anything.
It will be fine
Well-Known Member
What’s the difference in retail rates between 2day and Ground? They’ve saved at least that much on every package. Shipper pays $10 for 2day. Express pays Ground $7. Express pockets $3. What more proof do you need?
59 Dano
I just want to make friends!
Thanks for pointing out that a program that hasn't fully launched yet hasn't yet achieved results of full implementation!
59 Dano
I just want to make friends!
I went to the website and got a quote for full retail, no discount.
Package is 5 lbs, 10 X 5 X 3, and is traveling 276 miles to a residence.
Express 2 Day - $28
Ground - $11
I played around with different weights, dimensions, and destinations and the Express rate was always at least twice the price of the Ground rate.
The BIG money is in those resi overnights that can be serviced by Ground where the rate difference is 4:1 and 5:1.
MAKAVELI
Banned
That hasn't been proven. When FedEx can actually show the numbers you can claim that. Until then it's just theory.
59 Dano
I just want to make friends!
Worst case scenario is they offer other people with much more seniority a VBO and give their work to me... KIND OF LIKE THEY DID LAST TIME AND WHEN THIS POSITION WAS CREATED.
It will be fine
Well-Known Member
I don’t follow your argument. Shippers are paying for Express 2day shipments. At most Express would pay Ground retail rates to deliver it, in reality I’m sure Express gets a discount. Express keeps the difference without doing the work, mostly profit. It’s not theoretical, it’s happening.
MAKAVELI
Banned
There's more to it than simply handing it to ground. Pu and sort by Express, pu from Express to Ground network, loss of productivity in Express routes. Not exactly a cost saving move.
59 Dano
I just want to make friends!
In the example I posted, the price difference is $17. If Express keeps that package, the profit is less than two bucks. If Express pays Ground FULL RETAIL, the profit is at least $10, and that's playing it safe.
Probably will add up even more over time as couriers quit to find better paying jobs if this ultimately limits them to less than 40 hours. And older couriers might take their pension and leave, replaced by cheaper couriers. And over time they may be able to rework Express as a primarily part time workforce. A lot of scenarios possible that would result in more profits down the road.
59 Dano
I just want to make friends!
Express turns it over at the origin ramp. They don't transport it to the respective hub, they don't unload it and sort it again at the hub, they don't transport it to the destination ramp, they don't unload it and transport it to the destination station, they don't unload it and sort it at the destination station, and they don't make the final delivery. The Express expenses are slashed by more than half.
You're overlooking a LOT.
Are you sure about that? Much of it will still be flown as Ground can't make next day everywhere.
