Hey Vito,

In post 33 I did play the other hand a bit. Just wanted to point out that we aren't currently blowing the legacies out of the water when you factor in PS, time and a half pickup, etc., and neither does our retirement though we beat them on diversification. So is it reallly worth the beating we take night flying all the time...?

On job security, one factor to consider is the retirement numbers at the legacies over the next decade. Even if the ship hits the fan again their numbers should prevent or at the very least minimize any mass furloughs. Plus they are much leaner, the industry is consolidated, and they are all taking back a lot of the previously outsourced regional flying. Going forward, the passenger side will be in a much better position to weather whatever shipstorm is lined up next.

We've got a decent amount of uncertainty. Our core revenue is in a transitional phase from B2B to B2C = lower revenue and less demand for next day air service (high revenue) and second day air. As we all know Amazon is taking on more of its own distribution and even though it's somewhere between 3-10% of total revenue and low yield business, that will negatively affect demand for our services. Who knows what their long term plans are for getting into logistics. Technology is another area of concern. Once driverless trucks start operating we will lose a noticeable portion of our lift to them, for example. Trade wars will affect our business much more than the legacies and its looking like there will be multiple ones on the near horizon. 60% of our flying is international but our scope language isn't particularly strong for the international flying and we already charter a lot of intl lift. UPS could easily reduce inhouse Intl block hours on a whim. And don't forget, the legacies never furloughed to make a point on dominance. UPS did and will again when the environment is right. So I don't feel particularly safe at UPS.

Another reason to choose UPS/FX that I didn't mention before is, basically right from the beginning you can live and commute from anywhere in the world. Another: UPS vacation policy gives you the option for 4 consecutive weeks off* after year 1. You can take that trip to Australia, sail across an ocean, or do absolutely nothing for a month. Doesn't suck.

FTFF,

Your insight, information, and comparisons are truly enlightening and appreciated. Just wanted to say thank you for your time on the posts you've made. Also, I highly recommend the Australia trip (spent 8 weeks backpacking the east coast).

Highly unlikely... as Google and Apple are all but abandoning driverless cars. The risk of a 60,000lb truck going off an exit ramp because the GPS data base wasn't updated to the latest DOT construction project... and killing 20 kids in a school bus, just isn't worth it.

You bring up some valid points and concerns, but I would add that as market shares shrink, UPS and FDX will be the last to be affected severely. The first to go are the Kalitta's ABX Atlas type companies. And just like the airlines did, I would never rule out a merger of UPS with "insert whoever" if market shares/commerce and profits drove it.

As for Prime Air, I have studied Amazon in depth for several years now. They are not immune to competition. If Walmart wanted to invest a Billion or two and truly market a .com shopping experience for their customers and include "free shipping"... Amazon stock would fall 10% overnight. This whole Prime Air experiment started because Amazon didn't want to pay us or FDX the rates we charged. Some brainchild accountant convinced their BOD they could start their own airline. Time will tell if it proves profitable for them.


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Also.....percentage wise....and that's the number the really matters......UPS will retire the same amount as all the majors in the next 10-15 years.

That may be true. But for the last 10 to 15 years the number is probably 30% of what the legacies have retired. If that high. And add the 8 years of zero hiring, growth and total stagnation. A decade of a sh*t sandwich one will never get back. 10 years is 1/3 to 1/2 of one's career. Tell this to the 2005-07 hires.

"Past results are not indicative of future performance."

It usually is at Brown; )

FTFF,
Again, great, insightful post. My son is starting his pilot career and the industry trends you mentioned are some of the same trends I see too. As with all decisions one makes in life, the underlying factors dictate individual choices. Personally I value stability more than any other factor, to include pay. My Dad's businesses went bankrupt twice, causing untold stress and trauma in my life, hence My decision to go to UPS in 94 rather than United, despite United's much higher pay at the time. Your correct about the "leveling" between cargo and pax. It's going to be a tough decision in a few years for my Son.

It may be starting. I got a postcard in the mail from Costco last week saying that they were teaming with Google to start GoogleExpress with next day delivery. Maybe just an experiment in my area, maybe the race is on?

Edit, found this :

GOOGLE EXPRESS CONTACT US
About Google Express
Google Express is an online marketplace that connects shoppers with popular stores. You can get fast delivery of household items, apparel, electronics, pantry staples such as bread and cereal, and more. The service is available throughout the continental United States.

Depending on your area, delivery day availability and the retailer you’re shopping from, your order may arrive the same day you place your order, the following day, in 2 days or in 3 days.

Here's how it works:

Shop from an array of popular stores, all in one place
Add items to your cart
Choose a delivery day
Check out using Google Payments
We arrange for a delivery company to bring it to you
With a monthly or yearly Google Express membership, you can get fast and free delivery on eligible orders*
For non-members, delivery starts at $4.99 per store for eligible orders. Find out more about service costs.
You can also place voice orders with your Google Home device. Read more!
*Free delivery means no shipping & service fees. Eligible orders (a) meet store minimums before taxes & fees in select delivery areas, (b) exclude restricted items, and (c) are placed by someone with an active membership subject to terms. Pricing may change.

Walmart bought jet.com a few months ago...