FedEx Freight | Fedex CEO sees rapid growth

[HillBilly Frog]

Fedex CEO sees rapid growth in long-haul freight unit

By Ann Keeton
Last Update: 12:38 PM ET May 30, 2006

CHICAGO (MarketWatch) -- The acquisition of a private trucking company, Watkins Motor Lines, will allow FedEx Corp. (FDX) to offer a cheaper longer-distance service for ground freight and package-hauling, serving both existing and new customers, executives said Monday.
"We will grow this business fairly rapidly, we believe," Fred Smith, chairman, president and chief executive of the shipping giant, said during a conference call with analysts.
On Friday, FedEx said it would acquire Watkins, a private Florida company which serves 42 U.S. states, for $780 million. Last year, FedEx had revenue of $32 billion.
The deal isn't expected to be material to FedEx's fiscal-2007 earnings, but should be "very nicely acquisitive" to earnings after that, provided FedEx can improve operating margins at Watkins to match those of FedEx, said Alan Graf, chief financial officer. Executives declined to comment on current margins at Watkins, but said they can bring down costs by cutting back-office and other expenses.

story link...

 

[365Volare]

hmmm, cutting expenses, like running our tires bald,, running fuel filters till the engine cuts out,,, etc.... cool....

 

[CFer]

I've got a question I have not seen addressed yet. What happens to the long haul freight that FedEx Freight now hauls?
My understanding of the buyout is that FedEx National LTL(Watkins) will be handling all long haul freight. Will the long haul freight that's being handled now by FedEx Freight be pulled from them and given to Watkins?

 

[Pinball]

I've got a question I have not seen addressed yet. What happens to the long haul freight that FedEx Freight now hauls?
My understanding of the buyout is that FedEx National LTL(Watkins) will be handling all long haul freight. Will the long haul freight that's being handled now by FedEx Freight be pulled from them and given to Watkins?

For the most part we don't do a tremendous amount of long-haul freight. But, i am sure National will eventually handle it. Express had a heavy freight division when Fedex bought AF, we(AF) almost immediatley started handling that freight. At the same time, WML doesn't just handle long-haul. It'll be a swap, our long-haul for their short/medium-haul.

 

[CFer]

For the most part we don't do a tremendous amount of long-haul freight. But, i am sure National will eventually handle it. Express had a heavy freight division when Fedex bought AF, we(AF) almost immediatley started handling that freight. At the same time, WML doesn't just handle long-haul. It'll be a swap, our long-haul for their short/medium-haul.

Thanks Pinball

 

[pompano]

For the most part we don't do a tremendous amount of long-haul freight. But, i am sure National will eventually handle it. Express had a heavy freight division when Fedex bought AF, we(AF) almost immediatley started handling that freight. At the same time, WML doesn't just handle long-haul. It'll be a swap, our long-haul for their short/medium-haul.

Yo Pinball, what about the freight we are pulling off the west coast? For the most part they are coming out of Ca,Id,Wa,Or, and the rest of the great Nw. We haul alot of are own freight. Heres an example of one lane.
SAC to DEN then to NPL on to RKI then CGT then to TOL and beyond. All relay.

 

[imported_FXCITY]

I can't see Fedex freight giving any freight to national unless it is long haul that is picked up in an area that they don't have a terminal. Freights transit times are so short in alot of our lanes the freight can't set for the period of time it would take for the swap. Example!If we pickup a shipment in Louisiana and it is going to Vermont or Maine.We move it to Shreveport,La and we have to give it to National it would be the next day before we gave it to them. Then it would be that night before it moved from nationals yard.Thats nearly 24hrs and only moved 130 miles.(3 day transit)

 

[trucker4cf]

that is the synergies. FedEx has to break freight 4 times or more to make the coast. If we can move some long haul into a break for National it can go direct. Make sense?

 

[Fish]

that is the synergies. FedEx has to break freight 4 times or more to make the coast. If we can move some long haul into a break for National it can go direct. Make sense?

the freight is usually loaded in sac as a cgt group pos group or a nwb group and is not broke four times it just relays through those yards to the east coast if they are worth breaking they break them to help meet the numbers for the propers they build for the east coast in cgt otherwise they ride all the way as group to the east coast

 

[huckleberry]

The way it was explained to us is that the pick up will be called in to a central department or scheduled on the website. Once destination, how soon they need it delivered, and how much they want to pay is determined either a freight or national dispatcher will be notified of the pick up.