Jughead,
I had a big response to you that got lost when I was timed out, the gist of which I'll summarize:
ATL to MSP on Delta today. Anywhere from $342 to $924. Why the differential in prices? Yield management. I get it. When it's all said and done Delta will make about 4% net profit margin. (based on Q3 results google finance)
Eat at McDonald's? $7 value meal? Good deal? McDonald's net profit margin is 22%.
Interested in an iPad? They start at $499. Apples's net profit margin? 21%. Using Delta's 4% margin you'd be able to get that same iPad for about $410.
You shipped a $15 T-shirt overnight from ATL to MSP. You walked in and paid retail for a premium service that is guaranteed, insured and trackable. You also got a 75% discount. So, instead of paying $55, you're now spending $13.75 to ship that shirt. About 92% of the price of the shirt. Not very efficient, therefore not a good value. Does it have to be there overnight? I'm not sure if you can choose 2 to 3 day service using the interline discount. If you can, why not?
The answer to your question is Yes! You are living in the past. FedEx has over 252,000 employees worldwide. Operates over 650 aircraft. FedEx Ground alone has over 60,000 vehicles and 492 service centers. It's an incredibly labor and capital intensive business. Much more so than passenger airlines. With the exception of mail delivery, which USPS has an outright monopoly(
minimum4 That's right USPS has the monopoly here), FedEx and UPS both have logistics capabilities that the money losing Post Office can only dream of.
By the way, that T-shirt was still carried on a FedEx aircraft from ATL to MSP. The $5.75 the Post Office charged you was really a money loser.
This is from Annalyn Censky, CNNMoney.com,March 2, 2010:
"The cash-strapped U.S. Postal Service announced Tuesday that it will incur about $238 billion in losses in the next 10 years if Congress doesn't permit it to revamp its outdated business model.
USPS is trying to curb steep losses. It posted a $3.8 billion loss in its 2009 fiscal year, the latest in a multiyear string of whopping losses. Mail volume was down 12.7% for the year, a trend the agency expects to continue over the next decade as more consumers opt for online bill payments and message delivery.
The Post Office was $10 billion in debt as of Sept. 30 -- not far off from its $15 billion debt limit, which the agency expects to hit in its 2011 fiscal year."
So, saying you'll ship everything via the Post Office from now on is like someone saying they'll wait for Delta or AirTran to start a price war in Atlanta offering money losing fares before they'll travel. Sure, everyone likes that price, but it's not sustainable. Of course, neither Delta or AirTran are government owned so they won't be able to sustain continual losses. Why is the Post Office allowed such an awful business model?
The bottom line is I'll always ship via FedEx if I can because I'm a shareholder and employee. My next choice is going to be UPS. There are times when it makes sense to ship via USPS. I won't dispute that one bit. I just don't like rewarding their ineptitude, personally.
In case you were wondering, Yes. I have too much time on my hands.
Been injured reserve the past couple of months due to a back injury. God, I need a life...