FedEx Freight | Fx Express walked away from the USPS contract.

[No F-bdy Bs]

This is a HUGE deal. They've had that contract over 2 decades. I can only assume they didn't want it anymore. That will GREATLY reduce the # of flights, and thereby, the # of FX workers at the respective ramps.

UPS replaces FedEx to become U.S. Postal Service's primary air cargo provider

UPS' shares rose 1.4% before the bell while FedEx's stock fell 1.6%. USPS is the largest customer for FedEx's air-based Express segment. FedEx, which has been on a drive to rein in expenses to combat sagging freight demand and a bloated cost structure, said on Monday it would not extend its...

finance.yahoo.com

 

[SmackyJack]

Does this surprise you? It’s like this Corp. is purposely sabotaging itself.

 

[SwampRatt]

Margins, margins, margins...

I have no clue as to the profitability of USPS freight, but it seems to me to be a negotiation tactic, showing they're willing to walk.

They told us it's their biggest domestic customer.

I wonder who else has the available capacity to take on that account AND have reasonable reliability.

 

[SMOKESTACK]

You just knew this was going to happen.

 

[SmackyJack]

Margins, margins, margins...

I have no clue as to the profitability of USPS freight, but it seems to me to be a negotiation tactic, showing they're willing to walk.

They told us it's their biggest domestic customer.

I wonder who else has the available capacity to take on that account AND have reasonable reliability.

UPS.

 

[No F-bdy Bs]

Also wonder if it's a middle finger to the pilot unions. Those postal flights make up a LOT of FX's total.

I remember back about 17yrs ago when FX was going through negotiations with them. We had a regional director state a number of times that the postal contract was one of the things keeping air ops afloat.

 

[SmackyJack]

I read another article that stated that 300 pilots could be affected by this failed contract negotiation with the USPS.

 

[Iceman00]

We are losing money on the usps contract. Big part of the reason why express is doing so poorly they are obligated to keep hauling all of their stuff at a loss doesnt make much sense to keep doing it

 

[seabreeze]

Rumors are, that Big Dave is selling maps to the nearest ravines to UPS drivers.

 

[Triplex]

Rumors are, that Big Dave is selling maps to the nearest ravines to UPS drivers.

Ravine? I know that place! I used to pass it on the way to... Oh, never mind.

 

[SwampRatt]

Also wonder if it's a middle finger to the pilot unions. Those postal flights make up a LOT of FX's total.

FedEx, it seems, is always capitalizing on any chance to use the economics of the situation to their advantage. Be it negotiation with customers, labor, or suppliers, they love them all, except when working on favorable contracts.

A shame we (drivers) didn't do the same...

 

[oversteer]

I wonder how many accounts might be on the chopping block at Freight

 

[SwampRatt]

I wonder how many accounts might be on the chopping block at Freight

The earnings report makes it sound like THIS contract applies to Experss - Air Service. My interpretation.

"The current contract for FedEx Express to provide the U.S. Postal Service (“USPS”) transportation services within the United States expires on September 29, 2024. The parties are in negotiations for a new multi-year agreement for FedEx Express to provide airport-to-airport transportation services for the USPS within the United States. See “Item 1A. Risk Factors” for more information."

 

[SmackyJack]

We are losing money on the usps contract. Big part of the reason why express is doing so poorl they are obligated to keep hauling all of their stuff at a loss doesnt make much sense to keep doing it

We are losing money on the usps contract. Big part of the reason why express is doing so poorly they are obligated to keep hauling all of their stuff at a loss doesnt make much sense to keep doing it

Keep believing that narrative FedEx is feeding you. Losing a $2 billion a year contract will cause this Corp to lose money not make money, and most likely will result in layoffs.

 

[SmackyJack]

The earnings report makes it sound like THIS contract applies to Experss - Air Service. My interpretation.

"The current contract for FedEx Express to provide the U.S. Postal Service (“USPS”) transportation services within the United States expires on September 29, 2024. The parties are in negotiations for a new multi-year agreement for FedEx Express to provide airport-to-airport transportation services for the USPS within the United States. See “Item 1A. Risk Factors” for more information."

If they’re willing to lose a major contract like this, what makes you think they won’t do the same with the freight division?

 

[GirthQuake]

Eventually we will screw every customer over.

Granted the post office contract was dragging Express down big time, but they didn’t have to chuck it out completely. FedEx is just giving business away to the competition. If it was so bad or there wasn’t any decent counter-offers UPS wouldn’t have taken it either.

They tried to call their bluff and lost just like they did with Amazon last year during those negotiations. C level management at this company is delusional. Short term gains in stock price and margins aren’t worth screwing over every customer we do business with. Eventually they won’t ship with us. It’s already happening around here. We’ve been hemorrhaging customers for months.

 

[SmackyJack]

Eventually we will screw every customer over.

Granted the post office contract was dragging Express down big time, but they didn’t have to chuck it out completely. FedEx is just giving business away to the competition. If it was so bad or there wasn’t any decent counter-offers UPS wouldn’t have taken it either.

They tried to call their bluff and lost just like they did with Amazon last year during those negotiations. C level management at this company is delusional. Short term gains in stock price and margins aren’t worth screwing over every customer we do business with. Eventually they won’t ship with us. It’s already happening around here. We’ve been hemorrhaging customers for months.

You are absolutely correct.

 

[Boats n hoes]

Volume is what keeps drivers and runs going. Even if it is a little profitable. I would expect things to shrink going into next winter.

 

[SmackyJack]

Yep….

 

[SwampRatt]

If they’re willing to lose a major contract like this, what makes you think they won’t do the same with the freight division?

Where did I suggest that?

I've watched Freight lose many a good customer. REALLY good ones. But on the Freight side, I think most USPS shipments we haul are from shippers that are printing mailing type outfits who choose us, or not. It does seem like we don't haul as much as we used to into USPS. Again, that's my impression, since I've not delivered the full trailers to them (in a long time) like I once did. Maybe someone else can correct me / us on that part.