Retiring more aircraft

[FedupExpress]

FedEx retires one-fifth of Boeing 757 freighter fleet

FedEx is cutting nearly 20% of its Boeing 757 cargo jets because of soft demand and efforts to modernize the fleet. The post FedEx retires one-fifth of Boeing 757 freighter fleet appeared first on FreightWaves.

finance.yahoo.com

 

[59 Dano]

From the article:
By the end of September, FedEx will no longer be the primary air cargo provider for the U.S. Postal Service after UPS recently won the five-year contract. Management said it expects volumes to be near the contract minimum until then as business transitions to UPS

I remember pointing out that FedEx couldn't get the USPS to agree to certain minimum volume guarantees (which sunk any hope of a contract between the two) and @Aquaman asked why in God's name would anyone guarantee minimum volume because it's the one thing in this industry that can't be guaranteed. And here they were, operating under a contract with a minimum volume guarantee!

Go figure!

 

[zeev]

FedEx getting out of the airfreight business very simple.

 

[FedupExpress]

FedEx getting out of the airfreight business very simple.

Of course, Ground is where the money is.

 

[yadig]

FedEx getting out of the airfreight business very simple.

They’re not getting out of the airfreight business, they are just realigning too meet current volume.

 

[Aquaman]

Well we clearly wanted the new minimum to be much higher. Since this company can’t justify the expense of flying pretty much anything anymore

 

[Lineandinitial]

FedEx getting out of the airfreight business very simple.

What provision of the Railway Labor Act allows an Airline to stop flying airplanes and maintain its operational status? LOL

 

[bacha29]

FedEx retires one-fifth of Boeing 757 freighter fleet

FedEx is cutting nearly 20% of its Boeing 757 cargo jets because of soft demand and efforts to modernize the fleet. The post FedEx retires one-fifth of Boeing 757 freighter fleet appeared first on FreightWaves.

finance.yahoo.com

A bit of interesting news came out of that quarterly report.
1. An additional 2.5 billion for more stock buybacks.
2. More noise regarding a possible sale of FDX Freight. As the story goes there was a deal in place to sell FDX Freight
to Old Dominion but concerns about getting the deal through anti trust regulators and the onset of COVID resulted in
the deal being set aside. Is it back on the front burner again....time will tell.

 

[Thebrownblob]

A bit of interesting news came out of that quarterly report.
1. An additional 2.5 billion for more stock buybacks.
2. More noise regarding a possible sale of FDX Freight. As the story goes there was a deal in place to sell FDX Freight
to Old Dominion but concerns about getting the deal through anti trust regulators and the onset of COVID resulted in
the deal being set aside. Is it back on the front burner again....time will tell.

LTL Freight business is in the dumps. Not surprised they want to offload.

 

[Artee]

LTL Freight business is in the dumps. Not surprised they want to offload.

Yep....many of the freight drivers are being used to deliver some of our Heavyweight and of course and still hard at work moving Ground trailers. It appears Freight drivers do not have enough of their own work to do, so are taking work from Express and Ground.

 

[It will be fine]

LTL Freight business is in the dumps. Not surprised they want to offload.

Freight has the highest profit margin of any division of FedEx. They have been clearing 20% lately.

 

[Thebrownblob]

Freight has the highest profit margin of any division of FedEx. They have been clearing 20% lately.

Perhaps at FedEx freight I don’t know, but the lol freight industry in general is way down. they are looking to offload it for some reason.

 

[59 Dano]

Well we clearly wanted the new minimum to be much higher. Since this company can’t justify the expense of flying pretty much anything anymore

I don't know about you, but if something isn't worth the expense, I don't do it.

 

[It will be fine]

Perhaps at FedEx freight I don’t know, but the lol freight industry in general is way down. they are looking to offload it for some reason.

FedEx explores divestment of Freight business

This article suggests they just split it off as a new company and issue stock of the new company to current shareholders. They say it would be difficult to sell because it is too large. I think the division is doing much better than the overall LTL space and they are looking for ways to maximize the returns.

 

[bacha29]

FedEx explores divestment of Freight business

This article suggests they just split it off as a new company and issue stock of the new company to current shareholders. They say it would be difficult to sell because it is too large. I think the division is doing much better than the overall LTL space and they are looking for ways to maximize the returns.

With Yellow gone they're doing well. There is no way they could sell it to another large LTL carrier and a smaller one would be unlikely able to get financing. I too think it will be a spin off similar to the Roadway spin off in the mid nineties .

 

[Aquaman]

I don't know about you, but if something isn't worth the expense, I don't do it.

When it’s your entire business model, best to figure out how to justify the expense. With the shrinking of Express and dumping as much as possible to Ground it is going to be hard to justify the size planes we have anyway. Fly fewer, smaller planes to justify the lower postal volume. We’re not going to be flying much Express soon anyway. But no… the solution you geniuses worked up was, “Nahhhhh”

 

[Aquaman]

FedEx explores divestment of Freight business

This article suggests they just split it off as a new company and issue stock of the new company to current shareholders. They say it would be difficult to sell because it is too large. I think the division is doing much better than the overall LTL space and they are looking for ways to maximize the returns.

They’re doing better than the overall LTL space because they have two branches of the company they’re helping. If they’re spun off, they’re not going to be moving Ground trailers and delivering Express heavyweight anymore.

 

[59 Dano]

When it’s your entire business model, best to figure out how to justify the expense.

Our business model isn't third party airlift.

Let's walk through the justification of the expense.

Does this third party endeavor add any value or benefit to the service we provide to our other customers? No.
Does this create any significant bottom line benefit? No.
Is it a revenue stream that will grow in the future? No.
Is there a scenario where a realignment of resources and "right sizing" the operation provides any meaningful improvement in profitability? No.

Should I keep going?

 

[yadig]

Our business model isn't third party airlift.

Let's walk through the justification of the expense.

Does this third party endeavor add any value or benefit to the service we provide to our other customers? No.
Does this create any significant bottom line benefit? No.
Is it a revenue stream that will grow in the future? No.
Is there a scenario where a realignment of resources and "right sizing" the operation provides any meaningful improvement in profitability? No.

Should I keep going?

It’s never good to lose your biggest customer! It’s that simple. FedEx management couldn’t make it profitable and ups can. Kiss…

 

[Fred's Myth]

It’s never good to lose your biggest customer! It’s that simple. FedEx management couldn’t make it profitable and ups can. Kiss…

Sophomoric logic only satisfies the uninformed.

If Amazon only shipped the unprofitable packages with your company, and demanded a deeply discounted rate, anyone with an iota of business acumen would acknowledge that no matter how big Amazon was as a customer, you'd be better off not servicing them.

Why does it make any difference who the customer is, Amazon or USPS? The net result is the same.