tnkrdrvr

My anecdotal experience is that we are rarely flying lightly loaded jets. On the MD domestically, the payloads are very healthy. I’ve only flown one empty jet this year. Fred is a business genius, but he may have grown FEDEX Express too aggressively. He wouldn’t be the first genius to make a mistake. It doesn’t mean they are sunk, just that they may experience a few lean years while they sort it out. UPS definitely prefers not to make capital expenditures until it absolutely has to. We miss opportunities for growth as a result, but it tends to make us a more consistently profitable and boring company.

whalesurfer

Good comments all..

I disagree. They’ve got issues for sure, just like we do, but I think this decision will only strengthen them as a company.


I agree.

Very true.

However, this thread is really about FedEx’s latest Amazon decision. (offloading Amazon’s business).

So to go back to my original question - will/should we follow fdx in shedding Amazon’s airside business? I realize no one listens to pilots (and they probably shouldn’t lol) BUT I’m curious why we haven’t already done what fdx just announced?
Several managers have told us we make very little money on amazon shipments.. if so, why are we helping them in growing their own business?
An honest question.

Rocket Bob

We waded much more deeply into the AMZN pool than FedEx. It would be roughly 10% revenue hit and over 20% if the volume, Ive heard that number is much higher at World port. Should we walk away today, I think the answer is yes. Force AMZN to pay higher rates on a guaranteed volume number for xxx number of years, or tell them to Have a nice day. They are going to pull the rug out from under us sooner or later, I hope we are prepping for that

fly2ski

We are in deep trouble, why the hell are we hiring 60 pilots a month and buying so many freaking new airplanes??? I don't get it, maybe one of you enlightened cargo geniuses should be talking to Fred....

Tango Uniform

How profitable is the mail hauling at FDX?

UPS is capable of delivering most of the AMZ air on the ground. FDX can’t unless AMZ ships vis FDX Ground.

FDX Express is the only union shop in FDX. Regulations for FDX to ship Express on a plane. It cannot go ground. FDX Ground is all contractors. How many of them, especially the tractor trailer drivers will jump to AMZ? There is a trucking shortage so AMZ and FDX will have to figure out how much they are willing to pay. UPS full time feeder drivers make 6 figures and don’t have to pay for their truck or gas. They can haul Air. UPS’ network is more efficient and profitable.

As far as FDX hiring as another posted? So is UPS and a number of pilots retiring.

I look for major changes as FDX in coming years. Either they drop the contractor model on ground and integrate it with Express. Reducing the need for aircraft and capable of hauling Express in Ground Network like UPS or eventually turning to an AMZ model where the Express is subcontracted out to reduce labor costs like they do on ground. I’m thinking Ground contracting goes away and Express network shrinks.

G550Guy

https://www.usnews.com/news/business...in-coming-year


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tnkrdrvr

Yikes! Going from an almost $2 billion dollar profit 4th quarter 2018 to an over $1 billion dollar loss 4th quarter 2019. Hope Fred figures things out quick. On the plus side, this might delay UPS deciding to copy 7 day a week deliveries. I’m not looking forward to what that may do to the bidpack.

atpcliff

I would not be surprised if Amazon and UPS work together in some form...

And, FedEx only ended the N. American delivery of Amazon stuff. They are still doing worldwide Amazon delivery, which seems strange...

BoilerUP

That was due to a non-cash, $3.9B pension mark-to-market adjustment.

Operating profit was north of $1.3B.

Their sky isn’t falling...

tnkrdrvr

I agree their sky isn’t falling. However, UPS also has significant pension costs and didn’t turn in a loss. Their pension obligations are a built in cost of doing business. If they can’t turn a profit right now, when the economy is relatively booming, how will they do when the economy crumps during the next recession?