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Why Aren't "freighter" Company's Crying Poverty  
User currently offlineRamprat980 From United States of America, joined Mar 2005, 600 posts, RR: 3
Posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 5013 times:

I have a question. Why aren't the freighter company's (ie: fedex, ups) crying poverty like the domestic airlines are ?


With gun control there can be no democracy.. With gun control there can be no Freedom
57 replies: All unread, showing first 25:
 
User currently offlineMD11LuxuryLinr From United States of America, joined Jul 2003, 1385 posts, RR: 14
Reply 1, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 5003 times:

Because the freight industry continues to grow..


Caution wake turbulence, you are following a heavy jet.
User currently offlineLuv2fly From United States of America, joined May 2003, 12090 posts, RR: 49
Reply 2, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4986 times:

Also because they run there business like a business and charge amounts to cover costs and allow for a profit.


You can cut the irony with a knife
User currently offlineFlyinggizmo From United States of America, joined Dec 2003, 98 posts, RR: 0
Reply 3, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4973 times:

A good reason why the freight companies are earning profit can be summed up in two words....EBAY and AMAZON.

User currently offlineMD11LuxuryLinr From United States of America, joined Jul 2003, 1385 posts, RR: 14
Reply 4, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4962 times:

Quoting Flyinggizmo (Reply 3):
A good reason why the freight companies are earning profit can be summed up in two words....EBAY and AMAZON.

Yup.. good point. Think of all the companies in the world that use UPS, FedEx, etc. for their internet sales...



Caution wake turbulence, you are following a heavy jet.
User currently offlineDesertJets From United States of America, joined Feb 2000, 7773 posts, RR: 16
Reply 5, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4950 times:

And boxes don't complain about narrowbodies on transcons and no PTVs in coach.  laughing 


Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
User currently offlineCommavia From United States of America, joined Apr 2005, 11522 posts, RR: 61
Reply 6, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4924 times:

That's simple:

1) their "passengers" don't ever ask for more peanuts or a refund
2) their "customers" generally can't use orbitz
3) their isn't a southwest of cargo, at least not yet
4) as mentioned, freight demand, traffic and yields continues to grow


User currently offlineAeroVodochody From Czech Republic, joined Feb 2005, 540 posts, RR: 2
Reply 7, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4921 times:

Also because you don't have to feed the boxes, have F/A's to wipe the boxes' noses for them, boxes aren't afraid to fly like humans, therefore more of them fly , etc.


Try not to be jealous, we can't all be Czech.
User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 8, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4899 times:

3) their isn't a southwest of cargo, at least not yet

It is THERE for starters... and I don't think THERE is a market for drunk freight boxes who loose THEIR AWB and lot label..!!!



Wally Bird Ruled the Skys!
User currently offlinePhilSquares From , joined Dec 1969, posts, RR:
Reply 9, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4901 times:

Please don't limit this to just "freighter" companies. If you look at the airline industry out of the US and in Europe and Asia in particular, you will find a year of record profits coming.

This is due to several factors. The first is the stronger currency. Oil is priced in US $ and most currencies have appreciated a substantial amount. Thus the price of jet fuel has been dampened by this effect. Secondly, the carriers outside of the US have been very aggressive about fuel surcharges and hedging. Again, this has had a direct impact on the bottom line. Finally, the European and Asian economies are expanding at a much better rate than the US. Thus demand for air travel, both business and leisure, is higher than in the US.

One other reason is, and especially in Asia, most airlines here have a sizeable freight business. Look at airlines such as SQ, CX, KE, CI, BR, MH, they all have a booming freight business. And I'm not talking about the UPS/Fedex type of freight (packages). This is big dollar items such as computers, perishables, pharmacuticals. There is a tremendous demand for those items and people are willing to pay for the shipping.


User currently offlineCruiser From Canada, joined Apr 2005, 1001 posts, RR: 7
Reply 10, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4873 times:

Also, labour costs are much lower for moving freight. Almost everything is fully automated.


Leahy on Per Seat Costs: "Have you seen the B-2 fly-by at almost US$1bn a copy? It has only 2 seats!"
User currently offlineDLKAPA From , joined Dec 1969, posts, RR:
Reply 11, posted (9 years 3 months 2 weeks 3 days 22 hours ago) and read 4873 times:

Boxes go when people don't.

User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 12, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4829 times:

Fed Ex and UPS are integrators. They basically have 90% of the overnight market. If AA and UA owned 90% of the passenger market they would not be crying poverty either.

User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 13, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4821 times:

But air freighter companies come and go like the wind.

User currently offlineDallas74 From United States of America, joined Aug 2004, 95 posts, RR: 0
Reply 14, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4806 times:

The difference between freight and passenger carriers in the USA is simple.

Freight carriers are allowed to merge or go out of business without much government interference. For example - FedEx grew its global network by acquiring Flying Tigers in the late 1980's. Tigers became a global carrier by merging with Seaboard World in 1980.

UPS acquired Challenge Air Cargo to expand their reach in Latin America. They recently acquired the old Emery Worldwide and their Dayton Hub. This hub will be shut down some time in 2006 and the work transferred to the UPS hub in Louisville.

Airborne Express was recently allowed to merge into DHL. Again there was little interference from the US government.

Now look at the passenger side of the business. After 9/11 did the US Government allow America West and US Airways to go out of business? No! Instead of letting the free market dictate that these two carriers had to go (and reducing market capacity) the US Government creates the ATSB which offers each carrier government guaranteed loans in order for them to stay in business.

Can you imagine what the US airline industry would look like right now without AWA and US Airways? Here are two companies that haven't produced a profit between them in 5 years. (Please do not come back and tell me AWA had a profit in 2003. That profit was based on a government refund of security fees. It was not a profit from operations). America West and US Airways were not exactly world beaters for the past 10 years. In fact AWA has been a joke for most of its 20 plus years of existence.

So there you have it the freight carriers operate in the world of capitalism and the passenger airlines operate in the world of government supported capitalism.

I quote the late President Ronald Reagan, "the scarcest words in the English language are, I'm from the Government and I'm here to help".

One last point. Fed Ex and UPS pay wages that are higher than most airline workers enjoy today. It takes many people to move the freight these companies carry. This process - unlike envelopes - is not automated. In addition Fed Ex and UPS deliver their own cargo and parcels. This cost is included in the price. These companies are profitable because like Southwest Airlines they are efficiently run and maximize their return on assets. That concept is a lost art amongst most US major airlines.


User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4788 times:

That's a good point about mergers in the air cargo business, but UPS/FED EX basically have the overnight business locked up. ( DHL may have recently made inroads) I think this explains the high profits high wages more than anything.

I've seen them screw up heavy cargo shipments (not their focus) worse than any US airline. I don't consider them any more efficient than airlines. Basically packages are a lot easier to deal with.


User currently offlinePadcrasher From , joined Dec 1969, posts, RR:
Reply 16, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4777 times:

I googled the current market share of Fed Ex/UPS. Not 90% but 79%.

"DHL's acquisition of Airborne would allow it to chisel into the 79 percent American market share of express delivery commanded by FedEx and UPS, company officials said. DHL officials said they would target underserved small- and medium-sized businesses for shipping needs."


User currently offlineCosmicCruiser From United States of America, joined Feb 2005, 2255 posts, RR: 15
Reply 17, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4728 times:

Quoting PhilSquares (Reply 9):
And I'm not talking about the UPS/Fedex type of freight (packages). This is big dollar items such as computers, perishables, pharmacuticals

You might be surprised what we carry and it "aint" just packages.


User currently offlineFLY2LIM From United States of America, joined May 2004, 1184 posts, RR: 10
Reply 18, posted (9 years 3 months 2 weeks 3 days 21 hours ago) and read 4715 times:

Also, airline companies sometimes fly with empty seats. Do freight companies ever leave with less than full loads?
FLY2LIM



Faucett. La primera linea aerea del Peru.
User currently offlineMidnightMike From United States of America, joined Mar 2003, 2892 posts, RR: 14
Reply 19, posted (9 years 3 months 2 weeks 3 days 20 hours ago) and read 4696 times:

Quoting Ramprat980 (Thread starter):
I have a question. Why aren't the freighter company's (ie: fedex, ups) crying poverty like the domestic airlines are ?

Because the media does not pay to much attention to the Freighter dogs. UPS & FEDEX are kind of like Southwest, been turning a profit for years.

Atlas/Polar have been having financial problems over the years, Gemini has had it's problems over the years, but are getting better.

Don't forget Emery went belly up years ago.



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User currently offlineAirWillie6475 From United States of America, joined Jan 2005, 2448 posts, RR: 1
Reply 20, posted (9 years 3 months 2 weeks 3 days 20 hours ago) and read 4676 times:

Because they charge what ever they want for the shipments of packages. People have no idea how much they should be paying but pay anyways because no body knows the ideal amount that should be payed. $15 bucks for a dvd on express, crazy. They make a lot of profit and their payload is guaranteed to be there for every flight unlike the airlines.

User currently offlineSebring From Canada, joined Jul 2004, 1663 posts, RR: 14
Reply 21, posted (9 years 3 months 2 weeks 3 days 20 hours ago) and read 4686 times:

1. After the Sept 11 attacks, boxes weren't afraid to fly. The freight carriers never took the big hit that the passenger airlines absorbed. The same was true of SARS and the Iraq War. Indeed, freighter operators did very well flying freight for the US war effort in Iraq.

2. Even with the more favorable environment for freight carriers, Atlas Air, which also owns Polar Air Cargo, has just been through a Chapter 11 reorganization and has a significant number of its older freighters parked in the desert. And World Airways, a half passenger half freight charter and wetlease provider, also had severe financial difficulties after Sept 11. And a couple of other significant cargo operators - Tower Air comes to mind - have gone through Chapter 11. There are others. Their names escape me. One was flying overnight for Eagle Air Freight. Indeed, the US freight sector has been far from unaffected, and some carriers have availed themselves of government financial support.

3. Neither FedEx nor UPS are pure airfreight operators. Both have large sea freight and trucking operations.

[Edited 2005-05-07 05:44:14]

User currently offlineArkhem From Ghana, joined Jul 2004, 128 posts, RR: 0
Reply 22, posted (9 years 3 months 2 weeks 3 days 20 hours ago) and read 4632 times:

Because the last overnight envelope I had to send cost almost $20.  crazy 

User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 38
Reply 23, posted (9 years 3 months 2 weeks 3 days 19 hours ago) and read 4605 times:

Quoting DesertJets (Reply 5):
es:
And boxes don't complain about narrowbodies on transcons and no PTVs in coach.

And they don't demand frequent flyer programs and upgrades to first class.

Quoting PhilSquares (Reply 9):
Finally, the European and Asian economies are expanding at a much better rate than the US.

Uh, the last I checked most of Europe was not expanding faster than the US.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlinePilotpip From United States of America, joined Sep 2003, 3150 posts, RR: 11
Reply 24, posted (9 years 3 months 2 weeks 3 days 19 hours ago) and read 4611 times:

And there are thousands of those $20 envelopes in a single can. And there are a few of those cans on each airplane. Oh, and if fuel would require that package to be shipped for $30 you would still pay because it has to be there tomorrow.

And there are enough cans to need 2 DC-10s for a 45minute flight from STL to IND and MEM respectively.

And the other guys just upped 2 nighly DC-8s to LOU and RFD to an A-300 to LOU.



DMI
25 PhilSquares : Last freighter trip I flew 8 polo horses from SHJ-LHR. They were actually boarded in AKL. 5 horses alone would have paid for the entire trip. In addi
26 RedFlyer : Europe's economy is actually almost stagnant at around 1% growth (as compared with >3.1% in the U.S.). At least that's the numbers for "Old Europe".
27 Flyer732 : Yep. All the time, there are flights such as some of the Far-East to DFW/ATL that come in to Dallas and Atlanta completly full, but leave almost comp
28 Fedex : We have around a half dozen aircraft (MD-11's) that we use for horse charters sporadically year round.
29 LTBEWR : Let us not forget the exponential boom in manufacturing in Asia, especially China, where high value to weight products such as clothing, electronics a
30 CosmicCruiser : Someone beat me to it but yes we do horse charters too. I flew one SYD-HNL-JFK. We also carry F-1 cars, medical supplies, bacterial agents, DG that c
31 Rabenschlag : and let us not forget that around the world there are a couple of pax airlines generating sound profits. so maybe its also a management issue.
32 Luv2fly : Well SAID!
33 Texdravid : You ARE kidding, right? Europe's economies are in much worse shape than America's. It's not even close. Our economy is much more flexible, well run a
34 Jeb94 : As pointed out, Fed Ex and UPS have huge package and trucking operations. UPS just bought Overnight trucking company to compete with Fed Ex, who bough
35 Post contains images Patroni : The boxes don't, but it can be assumed that a big global customer will not accept paying the same rates like a small agent who brings one 100kg shipm
36 B744F : Specialized freight companies such as Atlas might be chartered to take X amount of goods to Y, and those X goods might not even fill up half the plane
37 NorCal : If airlines could charge people based on weight, then they wouldn't be bitching either. Think about how much money they would make off of our fat Amer
38 Alessandro : One reason is that cargo don´t mind being flown in Russian/Ukrainan planes, something some people who say "Boeing or I wont go" or something similar.
39 UPS Pilot : UPS has been in business longer than any airline. 2007 UPS will celebrate it's 100th anniversary. The key at making a profit was smart but aggressive
40 KC135TopBoom : I think your are trying to say: "If it ain't Boeing, it ain't going" But, boxes don't really care.
41 FLY2LIM : Thanks, I guess that was what I was asking. The economics of freight are obviously different. If one flight can pay for one round trip, then imagine
42 Checkraiser : They actually fly that?? I'm really surprised STL wouldn't be trucked to either of those hubs. Several years ago I used to work with an air freight c
43 UPS Pilot : Another note is we impose fuel surcharges. It's costing 20 grand more this year to fuel a 747 over last year.
44 Patroni : Well, this is of course the ideal scenario that one flight pays for the whole round trip and everything else is pure profit. Unfortunately it is rare
45 L-188 : I have issues with that statement. Tigers was worldwide long before that, through virtue of their extensive MAC charter operation. Of course at the t
46 CaptOveur : Boxes can't bitch. Boxes don't get pissed off by moronic security procedures that do nothing for security Boxes can fly whenever Boxes can be moved wi
47 Oftwftwoab : It's 1.7% in the EU, compared with 3.6% in the US. The EU isn't all of Europe, and growth rates are higher in the non-EU countries, but the weight of
48 LJ : One of the benefits of cargo airlines is that they don't have to offer a roundtrip and thus can adjust their schedule according to the cargo flows. Fo
49 ClipperNo1 : Please don't forget that "legacy" air cargo carriers, like AF Cargo and LH Cargo (I'm not talking about integrators...that's more or less a different
50 FDXMECH : Do you have a Money-Back Guarantee when your flight arrives late? Well, your package does. Perhaps that's why, "Boxes don't b!tch".[Edited 2005-05-21
51 Post contains images Iowaman : Wouldn't make much off me.
52 MD-90 : My sister graduated from Mississippi State a few weeks ago with a BS in Industrial Engineering. She starts with UPS in Memphis June 6. I suspect that
53 UPS Pilot : MD-90 Congrats to your sister. UPS' IE had even help set up departures out of Louisville during peak hours. They keep aircraft spaced during taxi so t
54 Browntailwhale : And screws it up even more each time! Total morons.
55 WhiteHatter : The box haulers have also consistently benefitted from the gradual switch of customers from inventory to the "just in time" model. Parts or supplies a
56 57AZ : Another reason that the freight lines are profitable is that they only use their more expensive air transportation when it is cost effective. While ev
57 Ikramerica : Yep, and they charge a fuel surcharge, too. Mentioned earlier, but needs repeating. While airlines are stupidly lowering fares below break even, the f
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