FedEx Freight | Purchase Transportation

[SwampRatt]

The cost of PT has increased each year.........not necessarily the schedules. Where are the figures supporting your claim that more drivers are sitting at home now than before? How many drivers were hired in the past year? Quite certain that they are not all sitting at home right now while PT pulls the freight........

Bottom of the board can always have rough spots during the slower period..........if you dont recognize that, you havent been here long or you have been very fortunate. Some years are better than others........planning is the key to getting through it.

I would contend that this year they over hired to a significant extent, making is worse than years past... They hired for a number of reasons, one we won't get into here. The other is since there was such difficulty attracting qualified applicants, the hired every possible hand. Even, unlike the past, trainees off the street. A shortage can have that effect.

In my opinion, this was a business decision, based on the fact that every driver we hired, was one that other companies could not hire, thus making it hard for other companies to grow. A competitive advantage, by gobbling up the available market, to the extent possible.Just my theory.

 

[aflifer]

In my opinion, this was a business decision, based on the fact that every driver we hired, was one that other companies could not hire, thus making it hard for other companies to grow. A competitive advantage, by gobbling up the available market, to the extent possible.Just my theory.

I would say it probably depends on where you are at.......seems linehaul is like real estate in that regard......

A less "black helicopter-ish" explanation might be that the extra growth caught a lot of locations with their pants down as far as staffing in the past year or so and over-compensations were made to avoid a repeat.

No comment on the cost vs schedule issue? Looks like a shade over 6% increase year over year.........surely TL carriers would have a GRI wouldnt they?

 

[SwampRatt]

Numbers can be skewed to back either side of an argument, we both know this.
Of that 17%, how much of that was PT being used during the summer months vs the winter months?

What would be your solution to PT?
Most think we should cut back on PT and hire more drivers to cover the said runs...but this would only help during the heavy months, what happens in the winter when freight slows down again...more drivers sitting at home than we have now?

Again, I don't like PT anymore than the next driver but they are a necessary evil.

I personally don't think we'll ever see 60%, 50%, or even 40%, but that's my opinion. You claimed there's no evidence of leveling off but according to the graph provided by CT, there was only a 1% growth over 3 years....and you claimed we went from 2% to 17% under FedEx (I'm sure your numbers are probably correct), that's over a 14 year span.

Again, the 17% is due to the rise in the workforce, freight levels, revenues, etc...it's all relative.

Not wanting to re post every year's numbers again, You can see the numbers for EVERY year since 2002 if you look back at this thread:
http://www.truckingboards.com/bb/threads/listen-to-the-anti-union-guys-please.62690/page-5

Page 5, I believe, about mid way down. Are we THAT unbalanced, and continuing to be? Every year, more and more? See the numbers and make up your own mind. Curious what you think...

 

[SwampRatt]

What is up with the spike from 3% to 8-9% in 2001-2002 range? I dont remember noticing it being so severe at the time..........maybe had something to do with the accounting then, as AF and Viking were still operating "separately"? The other big spike I see came later, which would presumably coincide with the finalization of the merger and the advent of choo-choo's into the Economy network.......


Proceed.......

Not sure about 2001-2002... Only limited time to dig. But I did find this:

"(1) Results for 2001 include the financial results of FedEx Freight West from December 1,
2000 and of FedEx Freight East from January 1, 2001 (the date of acquisition for financial
reporting purposes). Therefore, 2001 results are not comparable to 2002.
(2) Statistics for 2001 are based on the portion of the year including both FedEx Freight
West and FedEx Freight East (January through May)".

Regardless, I would be careful using straight cost to assume fluctuations of PT schedules. If you are correct and the driver shortage is in effect (which I would concur with)..........the demand would have driven our cost up, which would up the cost but not necessarily the schedules........just food for thought there........

Looks like "both". More and more expensive..

From the annual report Page 24 http://annualreport.van.fedex.com/2014/docs/FedEx_2014_Annual_Report.pdf

"Purchased transportation expense increased 13% in 2014 due to
increased use of rail and road third-party transportation providers and
higher rates."

 

[Crazy Trucker]

The cost of PT has increased each year.........not necessarily the schedules. Where are the figures supporting your claim that more drivers are sitting at home now than before? How many drivers were hired in the past year? Quite certain that they are not all sitting at home right now while PT pulls the freight........

Bottom of the board can always have rough spots during the slower period..........if you dont recognize that, you havent been here long or you have been very fortunate. Some years are better than others........planning is the key to getting through it.

Do you really think Fed Ex is going to put out a figure about screwing their own drivers while PT is moving the freight??

 

[Crazy Trucker]

Not wanting to re post every year's numbers again, You can see the numbers for EVERY year since 2002 if you look back at this thread:
http://www.truckingboards.com/bb/threads/listen-to-the-anti-union-guys-please.62690/page-5

Page 5, I believe, about mid way down. Are we THAT unbalanced, and continuing to be? Every year, more and more? See the numbers and make up your own mind. Curious what you think...

It looks like PT has grown 1-2% each year the past 9 years anybody can see that. Freight has increased but no one can sit here and say that are unbalanced lanes are the only place the freight has increased.

 

[SwampRatt]

It looks like PT has grown 1-2% the past 9 years anybody can see that. Freight has increased but no one can sit here and say that are unbalanced lanes are the only place the freight has increased.

Exactly! Each and every year... In unbalanced lanes... Highly unlikely.

 

[Canadian Flyer]

Kindersley runs WTO-WNP, then wanders into the US for their own freight to bring to Mississauga. Back to WTO empty. Challenger Motor Freight moves loads for a high value customer from TOL-WTO, bringing their own freight south from elsewhere and back to TOL empty.

Personally, the guys who genuinely believe that a union contract is the same as a contractor contract need a reality check. FedEx can cancel a contractor any time they choose, same as any of you. This includes PT contracts. They can scrub the contract any time they choose if you don't perform to their expectations. If you want my contract, buy a truck and get a contract with FedEx. They'll be happy to inform you that if you screw up once, you'll be suspended pending investigation. Then probably be fired. Sound familiar? You also don't get any bennies or pension from a contractor's contract.

And no, I'm not defending FedEx. I'm so fed up with being hamstrung by them that I'm actively looking for a place to go that pays comparatively. A union won't help a contractor like me, it'll just hamstring me even more. We got a notice last week reminding all of us contractors in Canada that FedEx has a zero tolerance policy for preventables because 24 trucks had preventables last year nationwide. Like we all suck at driving or something.

 

[aflifer]

Do you really think Fed Ex is going to put out a figure about screwing their own drivers while PT is moving the freight??

Do you really think you have the information needed to accurately quantify the amount of drivers hurting for work this slow season versus previous ones?

How many PT schedules ran out of your center?

 

[SwampRatt]

Again, I don't like PT anymore than the next driver but they are a necessary evil.

I personally don't think we'll ever see 60%, 50%, or even 40%, but that's my opinion. You claimed there's no evidence of leveling off but according to the graph provided by CT, there was only a 1% growth over 3 years....and you claimed we went from 2% to 17% under FedEx (I'm sure your numbers are probably correct), that's over a 14 year span.

Again, the 17% is due to the rise in the workforce, freight levels, revenues, etc...it's all relative.

I really hate to be the one pointing this out. Being a city driver, this has little effect on my personally. In fact, one could argue that "savings" on the line-haul side "could" translate into the city side being brought (up) "closer" to the higher standard that line-haul enjoys, in terms of compensation. That a different issue, so let's get back on topic.

Think about these numbers for just a minute. That 17% is not a percentage of freight put on purchase trucks. That 17% is a percentage of the TOTAL budget, gross revenue. NOT a percentage of the line haul budget.

I don't know what percentage line haul makes up, but it has been said to be the largest cost of the entire system. Now, we have to speculate just a little bit. Total Salaries/benefits make up 42.5%. Let's add add total Maint/repair cost (3.1%) & Fuel (10.3%). That brings us up to 55.9% of the total budget.

Now for the speculation part: What portion of this 55.9% do we assign to line haul? Half? Maybe more, likely less. Surly most of the Fuel cost can be attributed to line, for example. In order to make this exercise easier to stomach, let say 60% of all of the above cost is line haul. That would be 33.54% or the total budget. That puts Purchase Transportation (17%) right there at the 50% mark compared to line haul in 2014.

If line haul is a smaller portion than 60% (of wage/benefit/fuel/maint.), then the ratio for P/T goes up. Perhaps someone who is well connected (Redracer?) could find out what portion line haul actually is.

 

[Crazy Trucker]

Do you really think you have the information needed to accurately quantify the amount of drivers hurting for work this slow season versus previous ones?

How many PT schedules ran out of your center?

Nice spin, the numbers don't lie they are posted in this thread. I would ask can you prove that all the PT increases from 2006 to now (1 to 2% yearly) are in unbalanced lanes?

 

[SwampRatt]

Nice spin, the numbers don't lie they are posted in this thread. I would ask can you prove that all the PT increases from 2006 to now (1 to 2% yearly) are in unbalanced lanes?

There were certainly times over the past 12 yrs when truckload rates were down. But P/T numbers never went down. Did they?

 

[aflifer]

Nice spin, the numbers don't lie they are posted in this thread.

Not sure what I am supposedly spinning...........simply asking if the statement you made regarding PT and the "screwing" of linehaul drivers was made with anything tangible to back it up or if it was based on your apparent disdain for anything FedEx.

X/B and lower seniority road drivers can always be faced with sporadic work opportunities during the winter, that is nothing new. Some of the worst I recall happened when the scariest part of the initials PT for our drivers stood for Paternity Test.

In my opinion, if used properly, PT could actually help some of our road boards during the slower times. If it is used mainly during peaks, it would help ensure we do not over hire to cover the extra volume, thus fewer people struggling during the slower periods. I assume your answer would be to hire enough guys to launch all the freight on company equipment, which would certainly be noble, however the only benefit I could see would be the extra advertising we would gain by an increased number of extra billboards rolling down the highways with no freight on them.........

I would ask can you prove that all the PT increases from 2006 to now (1 to 2% yearly) are in unbalanced lanes?

Not sure why you are asking me to prove something that I never stated was true or even let on that I believed would be true........

 

[aflifer]

There were certainly times over the past 12 yrs when truckload rates were down. But P/T numbers never went down. Did they?

Fair and logical assumption.......

Honestly, I probably dont like PT any more than anyone else............but I did have an interesting thought on the subject that I have been mulling on a bit..

What if the extra schedules were added mainly during peak times to offset hiring need, thus saving the issues and cost of excess drivers sitting during slower times?

I honestly have no idea if that is or was the case, but it is certainly a question that I have found to be interesting to think about.........obviously too many drivers can sometimes be as bad as not enough........cost of hiring and educating is quite significant, throw in unemployment benefits for guys that do not have enough work and you could be looking at a large issue that could be somewhat mitigated............

Carry on sir......

 

[Crazy Trucker]

Not sure what I am supposedly spinning...........simply asking if the statement you made regarding PT and the "screwing" of linehaul drivers was made with anything tangible to back it up or if it was based on your apparent disdain for anything FedEx.

X/B and lower seniority road drivers can always be faced with sporadic work opportunities during the winter, that is nothing new. Some of the worst I recall happened when the scariest part of the initials PT for our drivers stood for Paternity Test.

In my opinion, if used properly, PT could actually help some of our road boards during the slower times. If it is used mainly during peaks, it would help ensure we do not over hire to cover the extra volume, thus fewer people struggling during the slower periods. I assume your answer would be to hire enough guys to launch all the freight on company equipment, which would certainly be noble, however the only benefit I could see would be the extra advertising we would gain by an increased number of extra billboards rolling down the highways with no freight on them.........



Not sure why you are asking me to prove something that I never stated was true or even let on that I believed would be true........

No disdain towards the company as stated before, but in the dead of winter when we have guys sitting at home at certain centers even though at those same centers the PT is running every day thats where my problem lies.

Do you really think you have the information needed to accurately quantify the amount of drivers hurting for work this slow season versus previous ones?

How many PT schedules ran out of your center?

This post is why i asked you to prove that all the increased PT in past years is in unbalanced lanes. If guys are not sitting at home why do you think the issue was brought up?

 

[Cab Lizzard]

Kindersley runs WTO-WNP, then wanders into the US for their own freight to bring to Mississauga. Back to WTO empty. Challenger Motor Freight moves loads for a high value customer from TOL-WTO, bringing their own freight south from elsewhere and back to TOL empty.

Personally, the guys who genuinely believe that a union contract is the same as a contractor contract need a reality check. FedEx can cancel a contractor any time they choose, same as any of you. This includes PT contracts. They can scrub the contract any time they choose if you don't perform to their expectations. If you want my contract, buy a truck and get a contract with FedEx. They'll be happy to inform you that if you screw up once, you'll be suspended pending investigation. Then probably be fired. Sound familiar? You also don't get any bennies or pension from a contractor's contract.

And no, I'm not defending FedEx. I'm so fed up with being hamstrung by them that I'm actively looking for a place to go that pays comparatively. A union won't help a contractor like me, it'll just hamstring me even more. We got a notice last week reminding all of us contractors in Canada that FedEx has a zero tolerance policy for preventables because 24 trucks had preventables last year nationwide. Like we all suck at driving or something.

Good luck finding another carrier.. Their all the same don't let the door hit ya in the B-hind.....
In their eyes the only thing lower in life than a O/O is a truck load driver.......

 

[aflifer]

No disdain towards the company as stated before, but in the dead of winter when we have guys sitting at home at certain centers even though at those same centers the PT is running every day thats where my problem lies.

I hear ya.........anyone who has been it the situation of sitting wouldnt wish it on anyone. Like I said in an earlier post, I know for a fact that PT schedules have been getting cancelled with the lower freight levels of late, which tells me some effort is there.

Part of the issue is this damnable weather..........once the freight flow gets out of kilter it seems like a lot of the centers anywhere near the storms become extremely inconsistent and out of sync. There can be minimal linehaul for days at a time and then when it breaks loose it takes all available road and city to even put a dent in it, hosing the x/b who would normally have run that freight spread out over the previous missed days.

This post is why i asked you to prove that all the increased PT in past years is in unbalanced lanes. If guys are not sitting at home why do you think the issue was brought up?

Like I said, I cant say that I believe that PT has increased only in unbalanced lanes. As many issues as we had hiring drivers in the past 12-18 months in certain areas certainly could have driven additional PT in many lanes, simply to ensure freight cycles through the system timely. Most of the PT I have seen over the years is in pretty obvious backhaul lanes, but I certainly would not claim to know much about what goes on system-wide.

Proceed sir........

 

[SwampRatt]

You claimed there's no evidence of leveling off but according to the graph provided by CT, there was only a 1% growth over 3 years.....

Good catch Red, But... That 1% is actually over 2 years (not 3), and at 17% (of total revenue), we're spending in excess of 50% as much on P/T as on the entire rest of the line-haul operation (post 110 above). At some point that figure will level off. Not sure at what point.

The savings have been good for the Company. Other than drivers sitting home, during the seasonal slow down, the only other effect had been the (good) road runs that were not added.

Again, we can only hope those saving are somehow shared with the dedicated employees...

 

[Canadian Flyer]

Good luck finding another carrier.. Their all the same don't let the door hit ya in the B-hind.....
In their eyes the only thing lower in life than a O/O is a truck load driver.......

I'm looking at selling out and going to Manitoulin Transport. Canadian LTL is something of a specialty of theirs, and I wouldn't have to cross the border anymore.

 

[Redracer3136]

Good catch Red, But... That 1% is actually over 2 years (not 3), and at 17% (of total revenue), we're spending in excess of 50% as much on P/T as on the entire rest of the line-haul operation (post 110 above). At some point that figure will level off. Not sure at what point.

The savings have been good for the Company. Other than drivers sitting home, during the seasonal slow down, the only other effect had been the (good) road runs that were not added.

Again, we can only hope those saving are somehow shared with the dedicated employees...

Sorry, must've overlooked your post (#110). Here goes...

Actually, according to the numbers you posted in your link... http://www.truckingboards.com/bb/threads/listen-to-the-anti-union-guys-please.62690/page-5 ...that 1% growth occurred over 4 years...from 2010 to 2014, not 2 years. I'd say 4 years shows a trend of PT starting to level off, wouldn't you agree?

If we go with your "guesstimated" number of 33.54% of the total budget for line haul expenses and 17% for transportation, I could see where PT would seem to be 50% of the total budget compared line haul...but let's also look at the profits these numbers have generated as pointed out by AFlifer.

We could also look at the other side of the coin...it was said back in the early 2000's that it cost (a loss) the company on average $800 per set to run empties down the highway. With that being said, we'd have to assume that if PT was reduced, a large portion of that 17% would result in more empty sets rolling down the road. Now if we factor in the rising cost of fuel, maintenance, wages, bennies, etc...say 12 years later, that cost (loss) would be substantially higher. By looking at this side of the coin, wouldn't it be safe to say that if the PT percentage of the total budget were lower and the line haul cost percentage was higher, the overall profit would also be lower due to the fact of the company losing money by running empties?

Again, I don't like PT's anymore than the next guy, but they are a necessary evil....and if managed properly, they can also be a benefit to the company and all of the employees...IMO.