NoHaz

Fred Smith - Chairman (earnings conference call) FedEx Corporation's CEO Discusses F2Q 2014 Results - Earnings Call Transcript - Seeking Alpha

So that’s why it’s important, and Dave and Alan have both mentioned this to you, that IP, which is the real key product line, is actually growing, and the yields are going up. The IPD, it’s hard to make money with that product.

So I think what you’re going to see is not very much change in the near term in the backbone network, and a lot of growth in the economy traffic, which lends itself to being put in underbellies, which is going to grow next year, according to the last report I saw, the capacity, by about 5%. The 787, the 777, nine, the A-350s, there’s going to be a tremendous amount of that underbelly capacity out there, which is very attractive in terms of cost per pound, and we are very effectively utilizing that. And Dave’s plans are to do even more of that.

So I didn’t want anybody to be confused about those terms and about the backbone priority network, which is working very well. It’s going to work even better here with a couple of things that Dave’s going to tell you about.

MaydayMark

I suspect this isn't anything that's new ...

Many years ago when we were opening the (then) new Paris hub, I read an interview with the President of Air France. They asked him if he was concerned about FedEx's growth in Paris? He replied that Air France gets a LOT of business from FedEx and that a larger FedEx could only be good for them.

As just one example ... we don't fly to very many (any?) African destinations. I always assumed we put that freight on Air France in Paris as belly freight

max8222

I was in ATL last week and we had 10 planes there, only one was a 757. I was thinking to myself that was a lot for the ATL market. Then I realized they are picking up a lot of the belly freight that Delta brings into ATL.

MX727

Best quote from FWS:

"And we have a drone expert on the staff. It’s Rob Carter, our CIO. He actually owns a drone, and he reported that it can operate about eight minutes and carry four Budweiser beers at his farm."

I want to visit RC's (look at that, his initials even fit) farm!

Precontact

This is going to be the big issue for us (FedEx, UPS) going forward. Scope protection is going to be key.

filejw

I'm surprised you guy don't know how much belly cargo is carried by others. I've noticed FedEx stuff on both NWA and DL for years.

Baja

How would you suggest it be tracked on a global basis? Spies? How would that be managed?

The use of belly freight has allowed FedEx to serve thin markets. Company management always prefers to use FDX airplanes where possible so as to maintain maximum control over the product/schedule. When markets grow, the freight can be carried by a feeder airplane (allowed in the contract) until such time as the demand dictates a FDX airplane. FDX airplanes means the schedule is no longer dictated by the pax carrier's schedule.

I am just as concerned as any FDX pilot about job security but belly freight says to me that a thin market is being served that will hopefully grow. Growth means jobs for FDX pilots eventually.

Wild Bill

...except when the belly freight capacity climbs to the point where it's more cost effective than using FedEx pilots, especially when you want to slow down 2 day and 3 day freight so that customers will pay for next day delivery.

hypoxia

Do you smell union busters and psychological warfare on this forum? "My negotiating committee speaks for me" Don't get distracted!

Busboy

When I saw the title of this thread...I thought it was going to be more drivel about BMI's.