Originally Posted by
PurpleToolBox
Valid points. However, I don't fear the three scenarios Hacker quotes. I fear FDX losing significant market share. Amazon has started business to business shipping, and their rates are much lower than FDX/UPS.
What happens if we contract some due to Amazon into the B2B market, AND we lose the postal contract to them? How much would the FedEx Express airline contract?
While that's not impossible at some point in the future at this point it would be pretty improbable for them to take the postal contract from us. They have far less lift than UPS and FDX so I would question their ability to offer the same level of service (even at an assumed lower price)
on that note how do we know what their actual costs are for shipping via their leased capacity? I mean aside from the marked to market pricing of FDX & UPS are their actual costs that much less? Do their 767s burn less fuel or require less maintenance? The crews operating them make less certainly, but these ACMI companies have a profit margin to the services they provide as well.
I think there's a bunch of breathless reporting out there and the "street" would love to pressure FDX/UPS management into reducing costs and utilizing free cash flow to do stock buybacks by casting Amazon as an immediate looming threat.
I'm gonna say it again. It is hubris to believe that "WE" need to wake up Fedex management. Those dudes stay "woke". Which is why we are always getting submitted during negotiations
