Interesting
06-24-2019, 07:11 AM
#3
done, gone skiing
Joined APC: May 2005
Position: Rocking chair
Posts: 1,601
Nothing here we haven't all speculated about for years. Flying boxes has always been way more expensive than a ground option. In the age of "free" shipping, where nothing is or ever was "free", nobody likes paying for first class when economy is offered for free. Fedex, UPS and DHL need to continue to cultivate the market for expedited freight. It will always be a niche part of the delivery business and as a precent of shipping, will only grow smaller. Amazon's warehouses can't store everything possible thing that someone near by need/wants. Expensive and perishable medical supplies are but one product we will all be flighting to keep out of Amazon's clutches. Time will tell.
06-24-2019, 01:53 PM
#4
Banned
Joined APC: Jun 2014
Posts: 311
Originally Posted by BluePAX
Same. Seems like a good move to me. Stay ahead of the game .
06-24-2019, 02:34 PM
#5
Gets Weekends Off
Joined APC: Nov 2016
Posts: 386
Originally Posted by howardhughes8
Further erosion of profit margins. This is like quantitative easing from the Fed. When they try to snap rates back up customers will balk and look for cheaper option and/or walk. Fedex likes to fly their packages, UPS trucks as much as they can. Creates less opportunities for the airline but better for business. Flying packages at ground rates is simply unsustainable with the cost structure that Express has.
06-24-2019, 02:43 PM
#6
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Joined APC: Jun 2014
Posts: 311
Originally Posted by BluePAX
then cornering that market early with low prices could certainly be beneficial long term.
06-24-2019, 02:54 PM
#7
Gets Weekends Off
Joined APC: Nov 2016
Posts: 936
Originally Posted by howardhughes8
With unsustainable cost structure. This is a big pivot for Fedex, which usually prefers higher yielding business instead of trying to hook and catch, then trying to raise prices and hoping people will stay. Racing to the bottom is never a good strategy as history has proven. Look at Apple, they will not sacrifice margins, they are simply transforming the business to become less dependent on a single product. Transformation/evolving is the key.
06-24-2019, 03:01 PM
#8
Banned
Joined APC: Jun 2014
Posts: 311
Originally Posted by Fdxlag2
I am not sure you know what the term unsustainable means. Do you think they are losing money filling the airplane with a marginal decrease in pricing? If so provide evidence.
And by the way, “marginal decrease in pricing”? I don’t think so. Ground to Express is around 30-40% higher. So charging ground (with it’s cost structure) for a much more expensive unit cost delivery charge service like Express IS a big difference.
06-24-2019, 03:47 PM
#9
Negotiations
Joined APC: Apr 2013
Position: FO
Posts: 18
Originally Posted by howardhughes8
Read all the info relating to the recent stock price decline. TNT plus rapidly shrinking profit margins. Maybe not loosing money, but further squeeze of net margins absolutely. It is listed on 10Q/10K, acknowledged my management and not liked at all by Wall Street. Fedex/UPS already operate on thin margins, this will only make it worse. To the point of loosing money? Very unlikely.
And by the way, “marginal decrease in pricing”? I don’t think so. Ground to Express is around 30-40% higher. So charging ground (with it’s cost structure) for a much more expensive unit cost delivery charge service like Express IS a big difference.
And by the way, “marginal decrease in pricing”? I don’t think so. Ground to Express is around 30-40% higher. So charging ground (with it’s cost structure) for a much more expensive unit cost delivery charge service like Express IS a big difference.
If that’s the case, then even though what you say is true big picture, in this specific case margins may still be higher.
06-24-2019, 03:51 PM
#10
Gets Weekends Off
Joined APC: Nov 2016
Posts: 936
Originally Posted by Carahog
I wonder however these prices are still higher than the Amazon volume that got cancelled.
If that’s the case, then even though what you say is true big picture, in this specific case margins may still be higher.
If that’s the case, then even though what you say is true big picture, in this specific case margins may still be higher.
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