FDXLAG

So if I ship something with UPS ground it come in a ups ground truck? What color brown is that truck?

If this happens the business model will change and a lot of employees will be looking for work elsewhere. Tell me in your dissertation where you explain why I am wrong. If their is no advantage to keeping Fedex Ground and Fedex Express separate they will be merged. I suspect freight,LTL, custom critical will, like brown, stay separate.

SaltyDog

FDXLAG,
If you ship something by next day air from Columbus, Ohio, and throw it in the box at 5 p.m. Goes on a "package car" to the ground terminal, then put it on an 18 wheel truck to Louisville, makes the sort and out the door. Mixture of air/ground networks.
The company has built co-terminals in some locations. If you ship a second day product on Wednesday from New York to Denver, Will say Second day Air on the package, but it went through various ground networks starting including our Team Drivers. Have a 300 pound package, or something LTL, depending on the various ground networks, they may place it on an airplane and then drop it back in a truck to the destination.
Simply, FedEx will learn to use all resources to ship to customers regardless of product. UPS does that now, it only goes on an airplane if no other way to get service via ground networks (plus rail!)
Don't take it serious, we were totally blindsided as pilots in our contracts. UPS had been working the solution over 5 years.
You know why UPS doesn't have fleets the size of your Caravans and ATR's? (Trucks instead)
See you added, the different subsidiaries certainly specialize, but they all are set to integrate with one another. UPS is very stovepiped. Leave the expertise at the local/regional specialty. Has logistic advantages, reason they make 'managers' move around like the military to understand the various nodes of transportation. This is all invisible to the customers who could care less how UPS/FedEx gets the shipment to the right place. Fred and UPS do though, and use all resources in a blended fashion.

FDXLAG

Brother I don't care, my future is tied to the dubious fate of the $ (my money guy says the Franc has a better future). But the difference between UPS and Fedex is your ground and air are integrated ours isn't. There are advantages and disadvantages for Fred. Illiminate the advantages and it would be stupid to keep the disadvantages. Who knows maybe he will dump the express delivery drivers and go with his ground subcontractor model.

Precontact

http://http://www.businessrecord.com...ArticleID=8027

Friday, April 24, 2009
UPS delivers more value than Federal Express

BY MALCOLM BERKO

Dear Mr. Berko:

I'm considering the purchase of either United Parcel Service or Fed-Ex Corp. I also have 50 shares of SunPower that I bought in January 2008 at $121 because my broker told me the stock would split 2-for-1 and run back up above $100. The stock is now $27, and I'd like to know if you think I should buy 100 or 200 shares. I think I need another broker, because in the past two years all he has given me are losers.

C.P., Kansas City, Mo.

Dear C.P.:

Both FedEx Corp. and United Parcel Service Inc. are superb companies.

UPS expects a decline in revenues from $51 billion to $49 billion for 2009 and a pickup in revenues to $53 billion for 2010. The consensus indicates earnings of $2.8 billion in 2009 and $3.4 billion in 2010.

FDX expects a slight decline in revenues from $37.9 billion 2008 to $37.5 billion in 2009, and an uptick to $38 billion in 2010. The consensus indicates earnings of $1.3 billion for 2009 and $1.4 billion for 2010.

I think UPS is a better company for the following reasons:

1. Net profit margins for UPS have averaged 8 percent over the past decade, which is twice the 4 percent net profit margins of FDX.

2. The UPS 10-year average return on shareholders' equity is about 22 percent, which is twice the 10-year average return of 11 percent for FDX.

3. UPS pays a dividend that has tripled in the last decade from 58 cents to $1.80 a share for 2009. FDX pays a niggardly dividend of 44 cents.

4. UPS uses 100,000 ground vehicles and 617 airplanes to produce $2.9 billion in net profits. FDX uses 1.4 million ground vehicles (is this correct???) plus 677 airplanes to produce $1.3 billion in net income.

5. Each UPS employee brings $6,500 in annual net income to the company's bottom line, while each FDX employee brings $4,500 in annual net income.

Both should do well during a recovery, but I suspect that the share price of UPS will perform better than the share price of FDX.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at [email protected]. © Copley News Service

gderek

Hopefully the Senate will be smarter and remove this portion on FedEx and the RLA. This will only cost jobs, lots of them. I wonder how many people are employed for building 30 777s, not to mention all of the drivers that might lose as well. This same attempt failed in 2007 when legislation passed the House but went down in the Senate.

It's really sad when something like this is inserted in the FAA Reauthorization bill and just shows how broken our system is.

Regardless of what happens, I wouldn't underestimate Fred and his ability

Precontact

I don't think Fred needs or wants 777Fs right now anyway, there isn't any demand for Asia direct USA flights now. But Fred is smart and he'll figure out how to use them when the time is right.

SaltyDog

Good luck when Fred gets it tuned up. He won't eliminate the advantages
He'll combine the models, minimize drawbacks. We are in the same business and merging models in the middle. My only point. Brother , I don't care either, UPS already optimized. We already lost the pilot jobs when they did.

JustUnderPar

I cannot believe the number of Union FedEx Pilots defending the actions their company to prevent workers (drivers/owners/whatever) from unionizing!!!!
***

Deuce130

I think you'll find most of us like "our" union, but take a skeptical eye towards anything that might hurt our company or have an effect on our long-term careers. For a good idea of the measure of support most airline pilots have for unions, simply check out the UPS thread on their MOU.

Whistlin' Dan

I've long since forgotten the details (not my dog, not my fight) but wasn't Fred Smith similarly upset when his pilots voted for ALPA representation? Whatever predictions of "doom-and-gloom" he may have made then certainly didn't come to pass.

As for job losses - The turnover in FedEx Ground drivers is already pretty high. Enough so, that normal attrition will quickly shrink the workforce to whatever size it needs to be. Being forced to pay industry-standard wages and benefits to those that remain will slow turnover and improve service.

The threat to cancel the 777 order amounts to little more than petty, sophmoric posturing by a businessman who should know better. Every time the subject comes up, he comes off like a petulant child, threatening to toss his oatmeal if he doesn't get his way. If he really wants to cancel the orders, let him. Boeing will build the airplanes anyway, and somebody else (maybe UPS?) will buy them. Then, in a few years when business has picked back up and he could really use the lift, he can re-instate his order at the new price for delivery 3-4 years hence.