Mode Shift
 

Some light reading with pictures for us slow readers…

A snapshot of some (not so good) trends in our industry. Not being gloom and doom…there is still a good market for us. The market, however, is not static and is continually morphing.

https://www.iata.org/whatwedo/Docume...argo-mar14.pdf

And one more….Mode shift a long-term trend that began as early as 2005 - Cargonews Asia

Interesting read Albie...

There has been mode shift, but it has had a larger impact on the Freight Forwarder business (this is our FedEx Trade Network Services), than with our traditional Express Network. Goods typically shipped in our Trade Network are of lower value and can be moved using a combination of rail, ocean, and air freight. The higher value Express freight, has taken a hit as well but the Company has been successful at utilizing belly freight to move lower yielding (dirty freight) onto that, while maximizing the high dollar, priority goods on our express freighters.

The market for J.I.T. shipping has softened over the past decade due to global economic pressures, but remains highly profitable and the largest piece of the FedEx revenue stream. It is not accurately measured in industrial articles that compare "freight forwarding" to global shipping trends. The current data suggests a stabilizing trend in the more important, express shipping trends, as compared to freight forwarding data.

I can't find the ocean shipping option on Amazon.

UPS Seasonal Hiring, Holiday 2014 - Business Insider

No offense but as I read this my 1K brain thought of this:
Old school debate scene - YouTube
:D

Forecasts of further mode shift are somewhat of a red herring, IMHO.


First Quarter Earnings Preview: Here's Why FedEx Looks Well Poised To Improve Performance - FedEx Corporation (NYSE:FDX) | Seeking Alpha


Of course I'm thinking about negotiations and current employees, not long term hiring and upgrade forecasts.

Please forgive as I try to stay focused on current events during negotiations.

:DHa...None taken...I must have "blacked out" while typing it!

Contract Now...It's Time!
 

FedEx Corp. Earnings Surge in the First Quarter
Wed September 17, 2014 7:30 AM|Business Wire | About: FDX
Volume, Yield Growth Drive Improved Results

MEMPHIS, Tenn.--(BUSINESS WIRE)-- FedEx Corp. (NYSE: FDX) today reported earnings of $2.10 per diluted share for the first quarter ended August 31, up 37% from last years $1.53 per share.

FedEx Corp. is off to an outstanding start in fiscal 2015, thanks to very strong performance at FedEx Ground, solid volume and revenue increases at FedEx Freight and healthy growth in U.S. domestic volume at FedEx Express, said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. More customers are relying on FedEx (FDX) because they appreciate the competitive advantages provided by our broad portfolio of solutions.

First Quarter Results

FedEx Corp. reported the following consolidated results for the first quarter:

" Revenue of $11.7 billion, up 6% from $11.0 billion the previous year

" Operating income of $987 million, up 24% from $795 million last year

" Operating margin of 8.5%, up from 7.2% the previous year

" Net income of $606 million, up 24% from last years $489 million

Operating income increased primarily due to higher volumes and increased yields at all three transportation segments. Results in the first quarter also include benefits from lower pension expense and the companys profit improvement programs. These benefits were partially offset by higher aircraft maintenance expense due to the timing of certain engine maintenance events.

During the quarter, the company acquired 5.3 million shares of FedEx common stock. As of August 31, 2014, no shares remained under the existing share repurchase authorizations. Share repurchases benefited earnings in the quarter by $0.15 per diluted share.

Outlook

FedEx reaffirmed its fiscal 2015 earnings forecast of $8.50 to $9.00 per diluted share. The outlook assumes no net year-over-year fuel impact and continued moderate economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.

FedEx reported strong first quarter results, as all three of our transportation segments drove higher revenues and improved profitability year over year, said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. Our profit improvement programs are progressing as planned and we continue to expect strong earnings growth this year.

Contract now! It's time!
 

FedEx to add 50,000 seasonal jobs

DAVID KOENI, Associated Press
By DAVID KOENIG, AP Business Writer

Updated 9:00 am, Wednesday, September 17, 2014


http://ww2.hdnux.com/photos/32/16/45.../5/628x471.jpg
In this July 9, 2014 photo, Mitchell Rodgers loads packages into his delivery truck at the FedEx Express station in Nashville, Tenn. FedEx Corp., on Wednesday, Sept. 17, 2014, reported profit of $606 million in its fiscal first quarter. Photo: Mark Humphrey, AP

DALLAS (AP) — Growth in online shopping is boosting profit at FedEx, and the company plans to hire more than 50,000 extra workers to handle what is shaping up as another record year for holiday-season package deliveries.

That's up from about 40,000 temporary holiday workers hired last year.

The hiring plan from FedEx Corp. came a day after rival UPS said it would hire up to 95,000 seasonal workers. Both companies are trying to avoid the problems that plagued them last year, when they were inundated by more holiday shipments than they expected and some packages didn't arrive until after Christmas.

FedEx Corp. announced Wednesday that it earned $606 million in the June-through-August quarter, up 24 percent from the same period in 2013. The results beat expectations, and the stock rose more than 3 percent in midday trading.

CEO and Chairman Fred Smith said the company was helped by strength in the ground-shipping segment, solid volume and revenue increases at the freight division and growth in U.S. volumes for the core FedEx Express business.

"We expect continued revenue and earnings growth in fiscal year '15," which ends next May, "assuming moderate global economic growth and stable fuel prices," Smith said on a conference call with investors.

The holidays are a crucial part of the year for FedEx, and the company will again be challenged by a compressed peak season. Thanksgiving, the traditional kickoff to the season, falls late again this year — Nov. 27. That will push so-called Cyber Monday, one of the biggest days for online shopping, back to Dec. 1.

Executive vice president Michael Glenn said FedEx expects another record season for delivery volumes, and that explains the plan to hire more temporary drivers, package handlers and other workers.

Both FedEx and UPS were caught short last holiday season. FedEx had announced it would hire 20,000 temporary workers, but wound up adding twice that number, a spokesman said Wednesday. United Parcel Service Inc. planned to add 55,000 seasonal workers but ended up hiring 85,000.

FedEx officials said they are talking with retailers about other steps to avoid a repeat of last year's delivery problems, but they declined to detail those discussions.

Memphis, Tennessee-based FedEx said its fiscal first-quarter earnings equaled $2.10 per share, up from $1.53 per share a year ago. Analysts surveyed by FactSet expected $1.96 per share.

Revenue rose 6 percent to $11.68 billion, topping Wall Street's forecast of $11.48 billion.

The ground-delivery segment accounted for about one-fourth of FedEx revenue but was more profitable than the much larger express-delivery business. Revenue rose in both businesses and at the smaller freight-shipping segment.

"It was another solid quarter for FedEx," said Logan Purk, an analyst with Edward Jones who rates the stock a "hold." The company is aided by growth in the economy and online shopping, "but what is really helping FedEx is their cost-reduction initiative for the express segment," he said.

The company's goal is to cut annual costs by $1.7 billion, mostly at the express unit and largely through voluntary buyouts to shed jobs. The plan is designed to offset a shift by customers from pricey air deliveries to slower but cheaper services.

Despite beating expectations in the quarter, FedEx did not change its forecast for the full fiscal year. It still expects to earn between $8.50 and $9 per share through May 2015. Analysts predict full-year earnings of $8.84 per share.

The earnings report came one day after FedEx announced that it will raise U.S. rates for express, ground and home-delivery shipments by an average of 4.9 percent on Jan. 5. It will also charge more for SmartPost, a service that uses the U.S. Postal Service for final delivery, and U.S. freight deliveries.

On the same day in January, FedEx will also begin charging more for bulky but light parcels that are shipped by ground by changing the pricing formula to increase the emphasis on package dimensions, not just weight. UPS is making a similar change. Big, lightweight packages take up more space in delivery trucks.

Shares of FedEx rose $4.88, or 3.2 percent, to $159.54 in midday trading. They began the day up 8 percent in 2014.


=======================================

The Commercial Appeal article on the same topic which went "Subscriber Only" before I could Copy/Paste it (Subscriber only on internet, but free to all on the Android App - -go figger) also stated that over half of the 50,000 seasonal hires could expect to be permanent positions.






.

Hire 50,000 seasonal and FDX won't need 1 extra pilot because we will cover it with draft, carryover, max BLG, and vacation buyback. Enjoy your Jan 15 paycheck with all that on it because you will not see a raise for a while.

4.9% Sounds about right to me....
 

"The earnings report came one day after FedEx announced that it will raise U.S. rates for express, ground and home-delivery shipments by an average of 4.9 percent on Jan. 5."

4.9% should be the starting point for salary increases under the new contract. FedEx knows the real Cost of Living increase necessary to survive long term. Anything short of 4.9% is putting more money in the companies pocket at employees expense. :(

I don't mean to be a cynic. I saw this at least 5 years ago. Although not a number-crunching air cargo business guru, I predicted this myself with one look at a ship like this.

31 knots with the motivation to be fast....and cheap. :(

Big Ship - Emma Maersk, Wal-Mart gets its stuff from China - YouTube

This wasn't for Fedex pilots. It was for the 29-35 year old looking at his/her next airline. The industry is changing and hard to predict. I do not think its gloom and doom. I think basing expectations for the next 20-30 year career needs to be done with a reasonable understanding of trends.

For non FedEx/Brown people looking at Atlas and ACMI this trend effects business. Freight forwarders are shifting to non shipping lane places (see inter Africa and other garden spots) and the belly capacity in pax planes is killing rates. One potential bright spot could be ACMI work for foreign airlines if growth continues in expanding markets with no pilots to fly planes. As we all know it only takes one terrorist act to change all our guesses so your guess is as good as mine! Maybe they'll start blowing up ships...

Sounds low to me. They've been exceeding expectations just fine at their current rates. Increasing them another ~5% in January is all the more reason to get a pay increase well above that.

With respect to the 50000 FedEx needs for peak. Last year in Indy the ramp guys were telling me they couldn't find enough to fill the open positions. Heard there is stiff competition in the Indy area for the type of box handling skills FedEx needs. Probably will only be worse this year with the grey clouds (unemployment) finally parting over the economy

Belly freight will help peak go off without a hitch, while we walk around semi-oblivious arguing about the shiny object of the week.

Yeah - just like last year - right?

The results of the Nov 4th elections could change the whole dynamic of our economy and belly freight will be even less capable of handling the demand for peak!

Boeing forecasts air cargo traffic to double in the next 20 years - The Boeing Company (NYSE:BA) | Seeking Alpha


Boeing forecasts air cargo traffic to double in the next 20 years

Oct 7 2014, 12:57 ET | About: The Boeing Company (BA) | By: Carl Surran, SA News Editor

Boeing (BA -1.3%) says it expects its air freight traffic to more than double in the next 20 years, increasing at an annual rate of 4.7%, as cargo traffic levels continue to strengthen after several years of stagnation.

Boeing predicts carriers will buy 840 new freighter planes valued at $240B in the next 20 years, with 70% expected to be large planes such as the 747-8 and 777, which can carry more than 80 tons of cargo in a single takeoff.

Stronger air cargo demand also would be good news for FedEx (FDX -0.7%) and UPS (UPS -1.2%), but shares of all three companies are lower today amid global growth concerns.

I'm a chief pilot for a reserve KC-10 squadron at Travis AFB. I've been watching great pilots, more importantly great people being hired elsewhere on a weekly basis. When FedEx officially announced hiring, I told the gang that I'm ready to update/write letter of rec for anyone interested. Only 1 reply. The word is out

Who has that number to the boat driving school???

1-800-usa-navy

Why the heck would a company that sells freighters publicly predict a growth in the need for freighters? :rolleyes: