Originally Posted by
Sideshow Bob
You don't get it. You are going to LOSE DOMESTIC flying when Fred develops a mature, efficient cross country trucking network. How do I know this? It happened at UPS after the '97 Teamsters contract. UPS put "sleeper" cabs on the long haul trucks and they put two drivers on who pretty much only stop for fuel. They can sell a two day air product halfway across the country or farther for a fraction of the air cost. This union (Teamsters) concession lost us a lot of domestic (primarily) daytime flying. You are a victim of the same mentality that many of you guys pride yourself on...namely that you're an airline now developing a trucking company. Why do you think Fred is doing that...to generate more flying? Think again. Granted your trucking network, indeed your entire ground network is more fragmented than UPS'. you use independent, non-union guys hustling to make service and a buck, but I have little doubt your manglement team is working hard on integrating and putting the thumb on those operators demanding better performance and from a shareholder's standpoint you should hope they do. The cost of moving a "parcel" by truck or rail space (of which UPS is the largest purchaser of in the country ) is a fraction per pound of that by air. While these realities may not sit well with you they remain realities. Ignore them at your own peril, not that there is anything you can do about it...this isn't a hobby to Fred I assure you.
That is a common misconception I have heard from several people. FedEx Express (Purple and Orange) and FedEx Freight (Blue and Red) are not independent contractors. They are employees of FedEx Corporation. FedEx Ground and Home (Purple and Green) are the independent group. Our ground network is not as fragmented as you seem to think. We also have an obligation to the U.S. Post Office to move priority and express mail via air...and I think we still have about 6 years on that contract. No doubt a truck is the most cost effective way to move a package that isn't as time critical, but our growth is coming from international express...that won't work on a truck or a boat or a train. Whatever domestic flying we lose to new efficiencies in our trucking operation will more than be made up by increased IP.
I hope.