767pilot

Like I can afford a wall street journal subscription! How about a cut and paste?

I'm saving up so I can afford bid pro

SaltyDog

Same business, but FedEx and UPS have long had different strategic but successful strategies.
If look back at UPS history, they fought the USPS everywhere in the government. FedEx took the omnipotent USPS contract in 2013 that they already had and have it till Oct 2024. It provides FedEx 1.5 billion a year. UPS didn't really want it and lost the opportunity in 2013. UPS went after TNT, but European competition committee gutted the deal and UPS wisely left.
FedEx has had a tough time with TNT.
Much of the business is on the ground. UPS has always been determined to minimize exposure in last mile of delivery. Amazon is investing huge in ground delivery. UPS now allows private vehicle delivery. UPS is heavily unionized, FedEx and Amazon zero. UPS sees an in, they just rolled out temporary workers using own vehicles.


https://www.detroitnews.com/story/bu...ries/40704203/

"United Parcel Service Inc. is expanding its hires of drivers using their own vehicles to help with the avalanche of holiday deliveries spawned by online shopping, and that’s rattling veteran drivers of the iconic brown van from New York to Kentucky."

Unlike competitors FedEx Corp. and Amazon.com Inc., UPS has a unionized workforce, and local Teamsters leaders aren’t happy with a trend they see as reducing opportunities for their members and hurting the UPS brand.

“They’re lowering their own standards so much,” said Vincent Perrone, president of Local 804 in New York City and Long Island, where the personal-vehicle drivers will be used for the first time this year. The local has filed a labor grievance with UPS to challenge the jobs.

UPS’s expanding use of temporary employees who use their own cars to make deliveries is stoking tension between the courier and unionized workers after a contentious battle over a new labor contract last year. One sore point: Permanent drivers worry the expanded seasonal hires will mean they’ll earn less overtime during the busiest season of the year."

Am certain UPS is going for permanent private vehicles in certain areas. Later, they will team with non union Amazon workers to deliver stuff just like UPS uses USPS to deliver UPS stuff. Staying close moving high yield Amazon volume gives many strategic cost benefits to UPS. Fred chose another path, but common for each to choose own path. Nothing new strategically in my view. Just a change in opportunity for the big companies. I think UPS has got some great opportunity staying in the mix with Amazon. Both can work out cost advantages outside of simply air side. (and UPS will still move it profitably)
Lots of moving parts.

BrownDoubles

Now that's funny right there, I don't care who you are.

whalesurfer

Salty - I have tremendous respect for you, the EB and for our union in general. ..and I definitely listen to people who’ve way more experience and knowledge than I ever will.
I consider myself a half-full guy; if anything my friends tell me that sometimes I’m somewhat naive and too optimistic. However, I’m also a realist.
It’s too early to tell whether our amazon gamble will pay off. I hope it will but I view them as an increasingly hostile competitor rather than someone we “work with”.

I’m skeptical of our upper management’s plans because they’ve shown us before they value short-term gains (dividends) over long-term plans for our company.
There have been sooo many huge mistakes made here and yet, in each case, the top brass ended up with lavish retirement packages. Does anyone remember the DHL deal that fell through? TNT? Postal contract? I’m sure I’ve forgotten others.
As far as Fdx regretting TNT deal - apparently Petya, the ransom-ware virus they experienced a couple of years ago, and which they’re still recovering from, cost them MUCH more than fdx is willing to admit. ...and they admitted to $300 million..

The economy is great right now and we keep hiring new pilots so many people have forgotten, or maybe have never experienced the setbacks of our seemingly recent past.

I remember the 2004~2007 time-frame. Things were great, we were hiring like crazy, getting new airplanes (767s) and many guys and gals were retiring early. Then the slowing economy, the age 65 rule and the parking of our 72s and dc8s brought ALL early retirements to a screeching halt. In a blink of an eye we went from “you’ll be a captain in 5-6 years” to “I hope I don’t get furloughed”.

Why am I bringing this up? Frankly, because sometimes it feels like a case of déjà vu. ...because I think the upper management cares more about raising the dividend than about having a long term plan for growing the company/airline. Sounds familiar?

The way I see it we are hiring primarily because of the incredible economy the country is experiencing right now (people tend to retire early when the stock market is up). However, instead of focusing on growing our own business we seem to be helping our future competition to grow their business - exponentially may I add.

Again Salty, I respect your perspective, I truly do and I’ll always remember the tremendous amount of work you and others put in to help the junior guys/gals here who’re about to get furloughed back then. ..but I hope you understand why I don’t trust them and why I’m skeptical when it comes to this blue & brown marriage of convenience.

To me amazon is a Trojan horse the enemy left behind. ..and we took the bait because we are in it together. ...riiight?

Sincerely hope I’m wrong.

Back to regular programming..


LOL!!

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BoilerUP

I don't think ATL is kowtowing to Amazon; they've admitted that volume is low margin and as such previously refused to add airframes to support it.

I could be wrong, but arguably that is as much if not more a reason for the creation of Prime Air as the 2013 Christmas debacle was.

August was when FedEx announced it would end its shipping contract with Amazon, and by that point we had already announced 49 growth airframes to be delivered between 2017 and 2022.

Even if every MD got rapidly parked ala the DC8, that'd still result in a net gain of 12 airframes from 1 Sept 16.

As a new guy (I think all 14+ hires are going to be called that for another decade or so, lol) I can certainly understand suspicion toward management's intentions...but Abney isn't Davis and the CapEx spent to grow the business in general and Air in particular these last few years seem to demonstrate that.

What's that Sideshow always says "Expectation something something"?

whalesurfer

All very good points Boiler and I’ll (again!) be the first one to admit when/if I’m wrong. I truly hope you’re right.
New airplanes being delivered doesn’t mean much to me as we were getting new planes back then too. Age 67/68, a slowing economy and/or parking of MD11s, BCFs and some 757s on the other hand would change the equation in a heartbeat.

I’m used to “Expectation Zero”. However, sometimes it feels as though our company’s slogan of “Worldwide Services” is slowly being replaced with ”Work Hard. Have Fun. Make History.”

C2078

So let me get this straight? Revenue growth of near consistently 5% quarter after quarter, BILLIONS spent upgrading sorting facilities, expanding/hedging new revenue sources (health care, B2B, B2C), creating new Asian lanes and lowering delivery times, a CEO who consistently says he is “cautiously” optimistic, laser focus on unit profitability, etc, etc. Not even going to mention new airplanes as they are almost irrelevant to the growth.

I would argue a company focusing on short term gains would not be spending billions in CAPEX. A decade+ ago we were not about to enter a prolonged period of massive retirements, no one was even close to 30 years. You can be all the skeptical you want, much different times. And age 67, everyone has an opinion, let’s just say one big player (ALPA) wants no part of it and will fight it very hard, just one player among many (including EASA) that don’t want it.

That is also why I commend Fedex for taking the long view, thinking years from now. Wall street (not that it means anything) had been very critical of UPS the last few quarters for being behind on CAPEX, now finally onboard CAPEX finally being made in a big way. If you are referring yo short term gains with Amazon, well, that is to be seen. I figure they have 2-3 years to wean off it, slowly while replacing with a different revenue source. Maybe their approach is why rip off the bandage when I can nurse the wound a bit longer and slowly get rid of the medication. Or maybe, just maybe, they will negotiate a long term deal to carry a guaranteed portion of their stuff. No one knows.

NOTHING is impossible, of course. But comparing middle 2000’s and now is simply misguided and based in emotion. Very different set of economic and situational circumstances. Oh, and consumers keep buying MORE AND MORE online rather than brick and mortar, another phenomena that did not exist back then.

Firefighter

Interesting. How can we say amazon “delivers” 50% of their packages, when really its contracted out. The many DSP companies that deliver their packages, and also wear their uniform and drive an amazon branded vehicle or sometimes not. From what I know, amazon has very few of their own drivers, which they’re currently trying to phase out of the picture. Apparently the liability isn’t worth it. Makes sense, but contracting these jobs out has to cost more, so even if they have that huge estimate, UPS or FedEx’s estimate would likely result in profits that are almost identical if not a tad bit less??


Sent from my iPhone using Tapatalk

Duffman

Out of curiosity, how do you guys see Amazon Air playing out for pilots? Low-pay, high turnover, stepping stone or eventually a decent place to spend a career?

BoilerUP

So long as Amazon utilizes the DHL model of multiple carriers to whipsaw against each other, 'decent' is probably going to be as good as it gets.