Watch out, UPS.. Amazon delivering half...
12-18-2019, 07:45 AM
#31
Gets Weekends Off
Thread Starter
Joined APC: Feb 2013
Posts: 1,339
Originally Posted by C2078
...
...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...
.
...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...
.
I don’t know who’s right but personally I wish we’d cut those ties as I feel it’ll hurt us in the long run. (How long until they block their 3rd party sellers from shipping ups? An honest question)
Regarding your reassuring ALPA statement..
(sorry, but I find your trust in alpa’s stance somewhat amusing.
) Are we talking about the same ALPA?? Does age 65 ring a bell?
For years Alpa was against raising the age 60 retirement age - until one day they were for it.
..and their change of heart happened pretty much overnight..
I still remember crashpad roommate telling me ALPA would NEVER give in to raising the retirement age back then... haha..
_____
Pilots union backs 65 as new retirement age
John Schmeltzer, Tribune staff reporter
CHICAGO TRIBUNE
May 25, 2007
The Air Line Pilots Association, the nation's largest pilots union, on Thursday said it will support raising the retirement age of pilots to 65 from 60, a move that likely will hasten the end of a long-running dispute about how old is too old to fly a commercial jet.
The switch risks dividing the union, which for the last 15 years has actively opposed efforts to raise the retirement age...
____
https://www.chicagotribune.com/news/...797-story.html
12-18-2019, 09:59 AM
#32
Gets Weekends Off
Joined APC: Jan 2006
Position: MD-11 F/O
Posts: 232
Its interesting that our flying has increased dramatically, and many airframes added... but we are still below 3000 pilots. They have covered the flying by adding legs so we fly more milk runs. In addition, people are flying a lot of open time and taking JA calls. For years, this wasn’t an option. There is no way this place would operate without the open time pickups or JA staffing model. In the end, we will be a lot better served if the pilots would would fly less of both.
If there is a slowdown, then it should still require hiring to staff the planes. So while the fear of a repeat from the recent history may exist, I don’t think we’re anywhere near where we were with the bean counter running the place. There has been a lot of investment into offloading pressure on SDF.
Amazon has developed a market where everyone expects everything tomorrow. The business has grown the entire segment, so there is probably room for another player. Albeit one that is putting pressure on the low yield segment.
If there is a slowdown, then it should still require hiring to staff the planes. So while the fear of a repeat from the recent history may exist, I don’t think we’re anywhere near where we were with the bean counter running the place. There has been a lot of investment into offloading pressure on SDF.
Amazon has developed a market where everyone expects everything tomorrow. The business has grown the entire segment, so there is probably room for another player. Albeit one that is putting pressure on the low yield segment.
12-18-2019, 02:23 PM
#33
Occasional box hauler
Joined APC: Jan 2018
Posts: 1,683
https://www.washingtonpost.com/business/for-fedex-it-can-always-get-worse/2019/12/18/28b471be-21ae-11ea-b034-de7dc2b5199b_story.html
More piling onto FedEx management by Wall Street types. Could be a great time to buy stock in FedEx or a lousy time to be approaching contract negotiations.
More piling onto FedEx management by Wall Street types. Could be a great time to buy stock in FedEx or a lousy time to be approaching contract negotiations.
12-18-2019, 04:24 PM
#34
Gets Weekends Off
Thread Starter
Joined APC: Feb 2013
Posts: 1,339
Hmm, maybe our management’s approach to doing business with Amazon was right after all? Time will tell.
In the long run I hope the government declares Amazon a monopoly and breaks it up in accordance with the Clayton Antitrust Act.
____
By Paul Ziobro
Updated Dec. 18, 2019 5:13 pm ET
It turns out there is no such thing as free shipping.
Shares of FedEx Corp. tumbled 10% on Wednesday, highlighting investor concerns about the delivery giant’s ability to adapt as more of its business shifts to delivering less profitable e-commerce packages to homes.
The overnight delivery pioneer on Tuesday reported a 40% drop in fiscal second-quarter profits and cut its earnings targets for the fourth time in 2019.
FedEx has been squeezed by a global drop in profitable Express air shipments, generally sent between businesses, and the added costs of building its Ground network, which is typically associated with package delivery from online merchants. In the latest quarter, domestic Express parcel volumes fell 4.1% from a year ago, while Ground shipments rose 3.5%.
Historically, FedEx largely avoided e-commerce shipments, leaving much of that business to rival United Parcel Service Inc. and the U.S. Postal Service. Amazon.com Inc., the biggest online retailer, accounted for just 1.3% of its revenue last year, the company says.
But FedEx executives decided over the last year to embrace e-commerce orders, a strategy they said they have been preparing for years as they watched the shift to online shopping and the deteriorating finances of the Postal Service, its key partner in handling such packages.
The company has added dozens of facilities to sort packages, including specialized centers to handle oversize packages, and now makes regular weekend deliveries.
The transition is shaping up to be one of the most arduous in FedEx’s four-decade history, and some on Wall Street are openly questioning longtime CEO Fred Smith’s strategy.
One reason is that FedEx is chasing growth in a less profitable sector. Online parcels are generally small and lightweight, a combination for lower revenue per package. They are also costly to deliver since drivers generally drop off one package to individual homes.
That contrasts with FedEx’s larger business delivering shipments between businesses. In that business, packages are larger and generate more revenue, while companies often ship multiple packages to each other. Such shipments tend to be more profitable, but growth there has stalled.
Operating profit margins in FedEx’s e-commerce-heavy Ground business plunged to 6.7% in the fiscal second quarter, down from 12.4% in the first quarter. Executives blamed issues including the costs of delivering seven days a week, the timing of the Cyber Monday holiday, a compressed holiday shipping season that required more staffing and the loss of Amazon as a customer.
“Standing up to [a] six- and seven-day network was very expensive for us,” Mr. Smith told analysts on a conference call Tuesday. “And we certainly anticipated some of it, but we probably underestimated the cost of standing it up.”
FedEx executives vowed that Ground profit margins would return to prior levels after the holiday crush. But some analysts were skeptical, arguing that the timing of Cyber Monday and condensed holiday calendar were known in advance. UPS, which has invested to expand and modernize its ground network, has posted strong sales and profits in recent quarters.
“It is difficult to have clear visibility to improvement on Ground margin given the magnitude of decline and the number of moving parts,” said UBS analyst Tom Wadewitz. “There remains a sharp contrast between the favorable trends at UPS and the margin weakness plaguing FDX.”
Mr. Smith defended his strategy to stop delivering packages for Amazon this year and embrace e-commerce deliveries from companies like Walmart Inc. and Target Corp. It also has decided to deliver more of the residential orders that it previously handed off the Postal Service.
The shift has moved the company into a lower-margin business where it will compete not just with UPS and Postal Service but also Amazon, which is ramping up its own delivery network.
“In the last weekend that just finished, we delivered over 14 million packages on Saturday and Sunday,” Mr. Smith said on Tuesday. “We weren’t even delivering packages on the weekend a couple of years ago.”
To curb spending, FedEx on Tuesday said it would reduce capacity in its Express air network, including grounding 10 cargo planes and cutting flight hours. Previously, Mr. Smith has come under fire for his reluctance to pare the Express network and the decision to spend on new jets.
Analysts asked executives on the conference call whether FedEx needs to consider bigger strategic changes, such as integrating its Express and Ground units. The two currently operate independently, which can result in employees from each division visiting the same address on the same day. Mr. Smith has argued the arrangement is necessary to ensure critical Express deliveries arrive on time.
“Wall Street is looking for a silver bullet to magically ‘fix’ FedEx,” Rick Paterson, an analyst at Loop Capital Markets, wrote in a note to clients. “The dual [pickup and delivery] networks may at some point be a luxury FedEx can no longer afford.” Mr. Paterson said he was surprised “we haven’t yet seen any [investor] activism with regard to FedEx, touting structural changes such as this one.”
Mr. Smith, 75 years old, has run FedEx since he started the company in 1971. He remains one of the company’s largest shareholders with a nearly 6% stake. But like other investors, he has suffered investment losses over the last year. FedEx shares, worth more than $250 last year, closed Wednesday at $146.86.
Write to Paul Ziobro at [email protected]
https://www.wsj.com/articles/fedex-s...688289?mod=mhp
In the long run I hope the government declares Amazon a monopoly and breaks it up in accordance with the Clayton Antitrust Act.
____
By Paul Ziobro
Updated Dec. 18, 2019 5:13 pm ET
It turns out there is no such thing as free shipping.
Shares of FedEx Corp. tumbled 10% on Wednesday, highlighting investor concerns about the delivery giant’s ability to adapt as more of its business shifts to delivering less profitable e-commerce packages to homes.
The overnight delivery pioneer on Tuesday reported a 40% drop in fiscal second-quarter profits and cut its earnings targets for the fourth time in 2019.
FedEx has been squeezed by a global drop in profitable Express air shipments, generally sent between businesses, and the added costs of building its Ground network, which is typically associated with package delivery from online merchants. In the latest quarter, domestic Express parcel volumes fell 4.1% from a year ago, while Ground shipments rose 3.5%.
Historically, FedEx largely avoided e-commerce shipments, leaving much of that business to rival United Parcel Service Inc. and the U.S. Postal Service. Amazon.com Inc., the biggest online retailer, accounted for just 1.3% of its revenue last year, the company says.
But FedEx executives decided over the last year to embrace e-commerce orders, a strategy they said they have been preparing for years as they watched the shift to online shopping and the deteriorating finances of the Postal Service, its key partner in handling such packages.
The company has added dozens of facilities to sort packages, including specialized centers to handle oversize packages, and now makes regular weekend deliveries.
The transition is shaping up to be one of the most arduous in FedEx’s four-decade history, and some on Wall Street are openly questioning longtime CEO Fred Smith’s strategy.
One reason is that FedEx is chasing growth in a less profitable sector. Online parcels are generally small and lightweight, a combination for lower revenue per package. They are also costly to deliver since drivers generally drop off one package to individual homes.
That contrasts with FedEx’s larger business delivering shipments between businesses. In that business, packages are larger and generate more revenue, while companies often ship multiple packages to each other. Such shipments tend to be more profitable, but growth there has stalled.
Operating profit margins in FedEx’s e-commerce-heavy Ground business plunged to 6.7% in the fiscal second quarter, down from 12.4% in the first quarter. Executives blamed issues including the costs of delivering seven days a week, the timing of the Cyber Monday holiday, a compressed holiday shipping season that required more staffing and the loss of Amazon as a customer.
“Standing up to [a] six- and seven-day network was very expensive for us,” Mr. Smith told analysts on a conference call Tuesday. “And we certainly anticipated some of it, but we probably underestimated the cost of standing it up.”
FedEx executives vowed that Ground profit margins would return to prior levels after the holiday crush. But some analysts were skeptical, arguing that the timing of Cyber Monday and condensed holiday calendar were known in advance. UPS, which has invested to expand and modernize its ground network, has posted strong sales and profits in recent quarters.
“It is difficult to have clear visibility to improvement on Ground margin given the magnitude of decline and the number of moving parts,” said UBS analyst Tom Wadewitz. “There remains a sharp contrast between the favorable trends at UPS and the margin weakness plaguing FDX.”
Mr. Smith defended his strategy to stop delivering packages for Amazon this year and embrace e-commerce deliveries from companies like Walmart Inc. and Target Corp. It also has decided to deliver more of the residential orders that it previously handed off the Postal Service.
The shift has moved the company into a lower-margin business where it will compete not just with UPS and Postal Service but also Amazon, which is ramping up its own delivery network.
“In the last weekend that just finished, we delivered over 14 million packages on Saturday and Sunday,” Mr. Smith said on Tuesday. “We weren’t even delivering packages on the weekend a couple of years ago.”
To curb spending, FedEx on Tuesday said it would reduce capacity in its Express air network, including grounding 10 cargo planes and cutting flight hours. Previously, Mr. Smith has come under fire for his reluctance to pare the Express network and the decision to spend on new jets.
Analysts asked executives on the conference call whether FedEx needs to consider bigger strategic changes, such as integrating its Express and Ground units. The two currently operate independently, which can result in employees from each division visiting the same address on the same day. Mr. Smith has argued the arrangement is necessary to ensure critical Express deliveries arrive on time.
“Wall Street is looking for a silver bullet to magically ‘fix’ FedEx,” Rick Paterson, an analyst at Loop Capital Markets, wrote in a note to clients. “The dual [pickup and delivery] networks may at some point be a luxury FedEx can no longer afford.” Mr. Paterson said he was surprised “we haven’t yet seen any [investor] activism with regard to FedEx, touting structural changes such as this one.”
Mr. Smith, 75 years old, has run FedEx since he started the company in 1971. He remains one of the company’s largest shareholders with a nearly 6% stake. But like other investors, he has suffered investment losses over the last year. FedEx shares, worth more than $250 last year, closed Wednesday at $146.86.
Write to Paul Ziobro at [email protected]
https://www.wsj.com/articles/fedex-s...688289?mod=mhp
12-18-2019, 08:53 PM
#35
Banned
Joined APC: Oct 2019
Posts: 923
There is something to be said, high efficiencies gained by having a fully integrated network, ground/air all one employee group. Having seen it first hand, when UPS drivers get their trucks loaded (they don’t do it themselves), the Express/Air packages get sorted separately and the drivers have a very high degree of sensitivity to the importance of getting the Express/Air packages delivered by the time required. So to the main argument, UPS delivery trucks operate as ONE source, and they understand the importance of the Air side packages, they bust their butts to get those packages delivered first/on time. The UPS delivery system has gotten very good at sorting out time sensitive/time constrained items. For example, say you have a Next Day Air package in your truck, but it’s not a morning delivery, just an economy by the nd of day next day. The UPS sorting system has gotten very good at organizing packages to combine geographical deliveries, meaning a non time sensitive Air package in a truck is combined with a ground delivery. So you make ONE stop, deliver on time the Air package and while in the area deliver the ground package as well. I do believe Fedex is starting to realize the efficiencies gained with an integrated system. It always cracks me up when Fedex call 490k+ teammates, when virtually ALL the Ground side folks are 1099/independent contractors! No benefits, no retirement, nothing!! Pay attention to the Fedex Ground trucks, they all have “Operated by.....” on the side.
The UPS drivers have a very high level of stress and performance on them, they deliver ALL for UPS, and know of they don’t deliver the Air side packages on time it’s a huge cost to eat. There is a reason UPS drivers make the most money, they earn it big time. They are very appreciative of the pension being accumulated, and also being the highest earning delivery drivers.
This post may be biased, I try hard not to put down any competitor, especially one as formidable as Fedex, but the integrated network and the independent contractor info is fact, not opinion.
The UPS drivers have a very high level of stress and performance on them, they deliver ALL for UPS, and know of they don’t deliver the Air side packages on time it’s a huge cost to eat. There is a reason UPS drivers make the most money, they earn it big time. They are very appreciative of the pension being accumulated, and also being the highest earning delivery drivers.
This post may be biased, I try hard not to put down any competitor, especially one as formidable as Fedex, but the integrated network and the independent contractor info is fact, not opinion.
12-19-2019, 04:07 AM
#36
Gets Weekends Off
Joined APC: Apr 2017
Posts: 110
Originally Posted by cessnapilot
Its interesting that our flying has increased dramatically, and many airframes added... but we are still below 3000 pilots. They have covered the flying by adding legs so we fly more milk runs. In addition, people are flying a lot of open time and taking JA calls. For years, this wasn’t an option. There is no way this place would operate without the open time pickups or JA staffing model. In the end, we will be a lot better served if the pilots would would fly less of both.
12-19-2019, 04:15 AM
#37
The NeverEnding Story
Joined APC: Sep 2005
Posts: 7,512
Watch out, UPS.. Amazon delivering half...
I don’t want overstaffed...but appropriately staffed would sure be nice.
What’s “appropriately staffed” look like? IMO, no reserve turn-outs or extensions into days off.
Trip Trade Denied: Insufficient Reserve Coverage has gotten rather old....
What’s “appropriately staffed” look like? IMO, no reserve turn-outs or extensions into days off.
Trip Trade Denied: Insufficient Reserve Coverage has gotten rather old....
12-19-2019, 08:04 AM
#39
Gets Weekends Off
Joined APC: Jan 2006
Position: MD-11 F/O
Posts: 232
Originally Posted by fightandflight
Completely honest question - So please don’t think I’m picking a fight here. I’ve heard this same idea in numerous places and I’m just wondering what the thought process is. What do we gain from being over staffed? I like having flexibility with JA and open time. For many junior commuters, open time trading makes life far easier. I feel That when pilots are needed it ultimately gives us more leverage. I also feel like it gives us a buffer when things aren’t going so well with the economy. The only argument I’ve really heard is that we get better lines....as if having a lot of pilots means we can run things less efficiently. Overmanned and inefficient doesn’t seem like a recipe for successful competition. What am I missing?
As to what we gain by not picking up open time and JAs... it’s part of their staffing model. If we didn’t do all the extra flying, they would ultimately hire more and upgrades come quicker.
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