acidradio
Crew
Topic Author
Posts: 1595
Joined: Mon Mar 12, 2001 3:19 pm

Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 8:02 pm

The US Postal Service recently announced (actually it was more discovered through regulatory filings) that its $1 billion contract for air cargo service will be up for grabs. It is theorized that the large contract, set to expire in Sep 2013, could also be bid on by UPS. FedEx provides air freight movement for USPS First Class, Priority and Express Mail products. Somebody correct me if I'm wrong but I remember FedEx saying that this contract necessitated the use of at least 20 aircraft systemwide!

In unrelated news but with interesting timing FedEx will start removing drop boxes placed at post offices throughout the nation. The USPS either leased space or permitted FedEx to place dropboxes for its services at about 5000 post offices around the US. Apparently the contract expired in June.

http://finance.yahoo.com/news/fedex-...ks-losing-1-billion-191406155.html

FedEx risks losing $1 billion-plus Post Office contract to UPS
Reuters – 26 minutes ago


By Lynn Adler

(Reuters) - Package-delivery company FedEx Corp (FDX) risks losing its business with the U.S. Postal Service, worth more than $1 billion a year, when the beleaguered postal service puts the contract up for bid next year.

The postal service alerted FedEx that it will seek bids for the contract after it expires in September 2013, FedEx said in a regulatory filing late on Monday.

That clears the way for larger competitor United Parcel Service (UPS) to grab the business - domestic air transportation for first-class, priority and express mail - that FedEx has had since 2000.


I wonder if the USPS will do anything down the road to reduce costs and/or usage of these contracts. A while back an audit was performed and it was determined that the USPS was "overusing" its FedEx capacity, especially for classes of mail that didn't require the speed of (and the cost of) the FedEx service. More about this audit can be found in this article: http://www.commercialappeal.com/news...-spent-too-much-on-fedex/?print=1. Granted this is not FedEx's fault necessarily but I wonder if it could play into how the contract is done on the next round.

[Edited 2012-07-18 09:21:00]
Ich haben zwei Platzspielen und ein Microphone
 
rwy04lga
Posts: 1976
Joined: Mon Jul 18, 2005 7:21 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 8:06 pm

C'mon Delta, make a bid!
Just accept that some days, you're the pigeon, and other days the statue
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 8:35 pm

Quoting rwy04lga (Reply 1):

C'mon Delta, make a bid!

It's not going to happen, as they don't have the infrastructure for such an operation. They don't have enough late evening and overnight flights to be able to handle all of the packages, plus those would have to go immediately from planeside to the USPS facility at an airport and that would require hiring more employees to work overnight shifts. Let's not forget that this sort of contract is better suited to airlines with dedicated cargo a/c as they can handle the volume much better.

I remember when Emery Worldwide had this contract and at certain times of the day they had priority at the drop-off belts at ATL and everyone else who may have been unloading had to stop unloading and take their carts with them. There would be a number of large containers that would come off of the Emery flights and it would take them anywhere from 90 minutes to 2 hours+ to unload all of them.

UPS bidding for it is not surprising, but I wouldn't be surprised if someone tries to piece together something with several smaller cargo airlines to go after the contract.

[Edited 2012-07-17 13:56:10]
 
rwy04lga
Posts: 1976
Joined: Mon Jul 18, 2005 7:21 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 8:43 pm

Quoting srbmod (Reply 2):
I remember when Emery Worldwide had this contract and at certain times of the day they had priority at the drop-off belts at ATL and everyone else who may have been unloading had to stop unloading and take their carts with them.

Mail moves the country and the USPS moves the mail.
Just accept that some days, you're the pigeon, and other days the statue
 
HPRamper
Posts: 4602
Joined: Sat May 14, 2005 4:22 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 8:57 pm

It's about time FX pulled the dropboxes out of the Post Office locations, it was always a dumb idea and they have some of the lowest profits of the entire dropbox network. Each market only has X number of dropboxes and they need to be placed in the best spots with the most traffic.

As for the billion dollar contract, it will be interesting to see what happens. Without postal volume, FX would turn into a one-shift-daily operation instead of the current day and night-turns. That said, it's fairly common knowledge in the industry that the USPS loves FX, and FX loves their money but hates their shoddy equipment and two-bit contractors we are forced to work with daily. USPS rarely works directly with FX, there is a middle-man contractor who does handling for the post office at just about every Fedex ramp.
 
User avatar
rotating14
Posts: 1124
Joined: Sat Jan 21, 2012 11:54 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 9:27 pm

If FX is buying 767's and 777's, would they already have some insight of what's ahead?? Papa Smith wouldn't let the contract slip away to UPS or somebody else so easily. I remember that around the time of 9-11, they were desperate for the USPS contract because they didn't get it it would have changed the way FX did its operations, . With volume down, and the USPS proposing cuts it's anybody's guess where the wind will blow but I see it as FX's contract to lose.
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 9:31 pm

Quoting srbmod (Reply 2):

It's not going to happen, as they don't have the infrastructure for such an operation.

Remember that FedEx started doing this after 9/11 when the airlines severely cut back on the mail they carried and the contract was awarded to FedEx. The USPS has the infrastructure as long as the airlines can get the mail to them in a timely manner.


BTW, as far as late night and overnight flights are concerned, what do you think happens when FedEx can't move a particular package when they want to? They take it to an airline, to be shipped on that airline's small package service. Happens quite frequently, actually.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
HPRamper
Posts: 4602
Joined: Sat May 14, 2005 4:22 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 9:38 pm

Quoting mayor (Reply 6):
Remember that FedEx started doing this after 9/11 when the airlines severely cut back on the mail they carried and the contract was awarded to FedEx. The USPS has the infrastructure as long as the airlines can get the mail to them in a timely manner.

USPS can, but the passenger airlines cannot absorb the kind of capacity needed.
 
slcdeltarumd11
Posts: 3278
Joined: Fri Jan 09, 2004 7:30 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Tue Jul 17, 2012 11:48 pm

Quoting rwy04lga (Reply 1):
C'mon Delta, make a bid!

I cant see Delta being able to absorb this? Even if delta stopped accepting checked bags i doubt they could absorb this whole contract
 
FI642
Posts: 992
Joined: Sat Mar 12, 2005 9:48 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 1:38 am

No scheduled carrier could carry that volume. Either FX or UPS will win the contract.
737MAX, Cool Planes for the Worlds Coolest Airline.
 
greenwichsud
Posts: 52
Joined: Tue May 13, 2008 11:18 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 1:55 am

Quoting FI642 (Reply 9):
No scheduled carrier could carry that volume. Either FX or UPS will win the contract.

While admittedly not knowing the full extent of the logistics involved, does it have to be a single scheduled carrier?
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:06 am

Quoting FI642 (Reply 9):
No scheduled carrier could carry that volume.

Who do you think hauled it before FedEx got the contract?
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
FX1816
Posts: 300
Joined: Thu Mar 25, 2004 8:02 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:26 am

Quoting mayor (Reply 11):
Quoting FI642 (Reply 9):No scheduled carrier could carry that volume.
Who do you think hauled it before FedEx got the contract?

Emery Worldwide but the airlines did carry their fair share too.

FX1816
 
jporterfi
Posts: 463
Joined: Sat Feb 25, 2012 6:25 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:32 am

Could we see the contract split between a large cargo carrier such as FX or 5X and a smaller carrier (specifically A8- Ameriflight)? I think A8's smaller aircraft could be beneficial for smaller markets, and A8 seems to have a very geographically spread-out route network.
 
seabiscuit
Posts: 32
Joined: Mon Jan 01, 2007 1:08 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:53 am

i think that USPS will be putting a lot pressure on the carriers to significantly reduce costs or at least the majors interested in the bidding.
Seabiscuit
 
geg2rap
Posts: 721
Joined: Sun Sep 21, 2003 11:02 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:54 am

Quoting mayor (Reply 11):

Who do you think hauled it before FedEx got the contract?

It was really spread out, Southwest used to haul it's share too.
Really hurt the airlines when 9-11 happened then losing this revenue too.
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 3:41 am

Quoting GEG2RAP (Reply 15):
Really hurt the airlines when 9-11 happened then losing this revenue too.

I think we were very lucky that the legacies managed to convince the feds to let us keep hauling air freight. It was a close run thing, because the feds were using there usual all or nothing approach and they almost shut our (DL) cargo down. In SLC, NW quit hauling cargo altogether and closed their freight office.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
FI642
Posts: 992
Joined: Sat Mar 12, 2005 9:48 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:52 pm

Quoting FX1816 (Reply 12):

Quoting mayor (Reply 11):
Quoting FI642 (Reply 9):No scheduled carrier could carry that volume.
Who do you think hauled it before FedEx got the contract?

Emery Worldwide but the airlines did carry their fair share too.

FX1816

USPS always had additional lift beside what scheduled carriers could handle. For a while they even had a fleet of leased 727's painted in the current USPS logo.
737MAX, Cool Planes for the Worlds Coolest Airline.
 
FX1816
Posts: 300
Joined: Thu Mar 25, 2004 8:02 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 2:57 pm

Quoting FI642 (Reply 17):
USPS always had additional lift beside what scheduled carriers could handle. For a while they even had a fleet of leased 727's painted in the current USPS logo.

Yes and those 727's were from Emery/Ryan International.

FX1816
 
bigbird
Posts: 280
Joined: Fri Aug 13, 2004 10:38 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 3:08 pm

Back in the 1970s and 1980s when I worked the ramp at DL when passenger loads were heavy we used to 'no ride" mail regularlly. During the the the Christmas rush it was worse. There were times when we would have 200 to 300 conveyances ie. containers and carts full of backlog mail that could not be handled. Sometimes even more. It got so bad that they wound up having to send it out by truck. With the passenger loads even heavier today there is no way that DL could even handle their share if the contract was split between the carriers like it was then. Give it to FX or UPS.
bigbird from georgia
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 3:18 pm

Quoting bigbird (Reply 19):
Give it to FX or UPS.

Oh, I've got no problem with that. More room for air freight then. You make more, per pound, on air freight than you ever would on mail.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
threeifbyair
Posts: 939
Joined: Tue Aug 21, 2007 1:44 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 3:50 pm

Do passenger aircraft carry any USPS packages, or just letters? I thought USPS boxes above a certain size were restricted on passenger aircraft.

Quoting acidradio (Thread starter):
wonder if the USPS will do anything down the road to reduce costs and/or usage of these contracts. A while back an audit was performed and it was determined that the USPS was "overusing" its FedEx capacity, especially for classes of mail that didn't require the speed of (and the cost of) the FedEx service.

Indeed - I once recieved a Media Mail package that traveled IAH-SEA in two days. Prettty cool for me.

Quoting HPRamper (Reply 4):
It's about time FX pulled the dropboxes out of the Post Office locations, it was always a dumb idea and they have some of the lowest profits of the entire dropbox network. Each market only has X number of dropboxes and they need to be placed in the best spots with the most traffic.

I never understood the Post Office FX boxes either. For retail customers USPS Express Mail letters are considerably cheaper than even Standard Overnight letters (although Express Mail only has a 1-day delivery guarantee in certain corridors). Both letters are probably fllying in different cans on the same FX flight.
 
MaverickM11
Posts: 15323
Joined: Thu Apr 06, 2000 1:59 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 4:05 pm

Quoting mayor (Reply 6):
Remember that FedEx started doing this after 9/11 when the airlines severely cut back on the mail they carried and the contract was awarded to FedEx. The USPS has the infrastructure as long as the airlines can get the mail to them in a timely manner.

I've always heard it's a time consuming, laborious operation for next to no profit. I think most carriers have done away with it b/c it's not worth their time.
E pur si muove -Galileo
 
NWAESC
Posts: 859
Joined: Thu Aug 30, 2007 1:02 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 4:08 pm

Quoting rwy04lga (Reply 1):
C'mon Delta, make a bid!

As someone that was originally hired to "throw mail," it'd be nice, but outside of maybe a small expansion of what we handle now, I don't see it happening- at least not like it used to be, anyway.

Quoting mayor (Reply 6):
They take it to an airline, to be shipped on that airline's small package service. Happens quite frequently, actually.

  

Quoting slcdeltarumd11 (Reply 8):
I cant see Delta being able to absorb this? Even if delta stopped accepting checked bags i doubt they could absorb this whole contract

No, but that's not how it used to be either... Most everyone carried at least some...

Quoting mayor (Reply 16):
In SLC, NW quit hauling cargo altogether and closed their freight office.

That was one of a handful that all closed at once. I want to say 8 or 9 of 'em? SLC, MSN, FSD are 3 that come to mind... Not sure what the other ones were (SNA?)... After that, they only accepted VIPS (our equivalent of Dash)...
"Nothing ever happens here, " I said. "I just wait."
 
User avatar
KLASM83
Posts: 397
Joined: Mon Aug 01, 2005 10:08 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 4:47 pm

I can see this as an opportunity for the Post Office to shed some of that excess contracting they do. Having it go from the Post Office to say, Matthson Flight Forwarders or Integrated Airline Services, to FedEx, back to IAS or some other company than to a contracted trucking company that takes it to the Post Office may be a bit much.

As one of the many middlemen, I can see the opportunity for it to be cut, but honestly, you get a pretty penny for throwing mail from a ULD into one of them there postal carts (a BMC or an APC), and I'd hate for that to dry up.
Don't you want to hang out and waste your life with us?
 
boeing773er
Posts: 480
Joined: Sat Dec 03, 2011 7:23 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 5:05 pm

I personally believe FX should retain the contract, their service is consistent (my mother works for the government and receives packages daily from her office in PHL and they always arrive at the same time everyday)

I don't think 5X really has enough equipment to really meet the government demands, while taking care of the rest of their customers. Keeping in mind they have about 500 less aircraft then FX, granted 5X doesn't fly anything smaller than a 757-200 but I believe the government is looking for frequency.

I don't think this contract should be split, I just feel like that would be absolute chaos. There would be no organization there, and this process would possibly lose hundreds of packages daily while trying to move the once package to another carrier/operator.

But knowing how poorly USPS is doing I'm sure they are going to choose whoever can do the work the cheapest.
Work Hard, Fly Right.
 
HPRamper
Posts: 4602
Joined: Sat May 14, 2005 4:22 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 5:13 pm

Quoting threeifbyair (Reply 21):
I never understood the Post Office FX boxes either. For retail customers USPS Express Mail letters are considerably cheaper than even Standard Overnight letters (although Express Mail only has a 1-day delivery guarantee in certain corridors). Both letters are probably fllying in different cans on the same FX flight.

They most likely were both on the same flight. It gets worse. FX Express has drop boxes at Fedex Office locations too. Since all the Fedex companies operate separately, they have these drop boxes to poach freight from Office since Office employees make a commission on every package they accept on behalf of Express. *Worst* setup ever.

Quoting MaverickM11 (Reply 22):
I've always heard it's a time consuming, laborious operation for next to no profit. I think most carriers have done away with it b/c it's not worth their time.

A lot of carriers handle mail in conjunction with cargo. If the rampers have free time - and let's be honest, there are fewer bags than there used to be since everyone brings it carryon - it's no problem to lump a thousand pounds of first class mail trays into the bin. Yeah cargo pays more, but there isn't always cargo - especially later in the day since cargo usually moves early.

Quoting KLASM83 (Reply 24):
As one of the many middlemen, I can see the opportunity for it to be cut, but honestly, you get a pretty penny for throwing mail from a ULD into one of them there postal carts (a BMC or an APC), and I'd hate for that to dry up.

That was my first airport job, working for Matheson, and I agree, the USPS deals with WAY too many contractors. And those contractors, being the lowest-bidder types, always have crappy management and crappy equipment. I've seen MANY a dolly wheel fall off and roll across a ramp because the contractors don't spend any money on equipment maintenance. The money was very nice, but maybe that's why the USPS can't make any money....because tossing packages probably shouldn't pay 15-16 bucks an hour when the airlines pay their employees barely half that to do the same thing.
 
KC10Guy
Posts: 6
Joined: Sat Jan 28, 2012 4:36 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 5:27 pm

Keep in mind that Regional Jets are more popular now in the domestic market versus years ago when heavier and less frequent jets (DC-10, L1011, 747, etc) were used. The carrying capacity is down but the frquency is up so maybe that would balance it out. Im just throwing out my 2 cents.

P.S.. Long time watcher first time poster here on the forum..
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 5:36 pm

Quoting HPRamper (Reply 26):
but there isn't always cargo - especially later in the day since cargo usually moves early.

Depending on where you are, cargo moves 24/7
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
User avatar
tb727
Posts: 1765
Joined: Thu Jun 30, 2005 1:40 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 6:26 pm

Quoting greenwichsud (Reply 10):
While admittedly not knowing the full extent of the logistics involved, does it have to be a single scheduled carrier?

I wish it would go back to the way it used to be with a lot of smaller cargo carriers flying the mail to spread the flying around a little but I don't think it's gonna happen. Most of those companies like Emery/Ryan and Express One are gone!
Too lazy to work, too scared to steal!
 
b6a322
Posts: 125
Joined: Thu Jan 14, 2010 7:44 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 6:44 pm

Maybe someone here knows the answer to this, but doesn't UPS already carry some mail on behalf of the USPS? The service is called UPS Mail Innovations.

Short of everything else, it really is FX's to lose. But I could definitely see the USPS try to shed some dead weight. Buy trucks to take mail right to the plane, and it would still be cheaper than all the third parties.
The content I post are my own thoughts, nothing more. :)
 
threeifbyair
Posts: 939
Joined: Tue Aug 21, 2007 1:44 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 6:50 pm

Quoting HPRamper (Reply 26):
Since all the Fedex companies operate separately, they have these drop boxes to poach freight from Office since Office employees make a commission on every package they accept on behalf of Express. *Worst* setup ever.

That is ridiculous, but it might explain why the completely bored Fedex Office people were so happy to see me when I would drop off packages for work. Do Office people get a commission for accepting Ground packages too or is Ground not valuable enough?

The other factor relevant to the new air contract is that USPS has been looking into trucking more mail and using less air transportation. USPS is also trying to consolidate the various mail streams (Priority, 1st Class, Bulk, Packages, etc.) in major sorting hubs to improve cross-utilization of resources and transportation. I could see 2-day trucking taking over for air in a lot of the East and Midwest corridors.
 
aztrainer
Posts: 713
Joined: Thu Oct 13, 2011 2:17 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 7:14 pm

Quoting B6A322 (Reply 30):
Maybe someone here knows the answer to this, but doesn't UPS already carry some mail on behalf of the USPS? The service is called UPS Mail Innovations.

That is a good question as I have received items from Amazon when tracking it it has said that it was a USPS, but when it arrived it was by UPS or FedEx.

OK, Don't flame me on this, but when the mail comes into a FedEx/UPS facility does it comes in as a bulk load or loose? Could FedEx/UPS or whomever has the contract simply have people at the major sorting facilities to assemble the cargo container so that they could be taken from the sorting facilities to the plane without having to go through the cargo facilities? Thanks for any input.
 
135mech
Posts: 410
Joined: Wed Oct 04, 2006 5:56 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 7:49 pm

Quoting threeifbyair (Reply 21):
Quoting acidradio (Thread starter):
wonder if the USPS will do anything down the road to reduce costs and/or usage of these contracts. A while back an audit was performed and it was determined that the USPS was "overusing" its FedEx capacity, especially for classes of mail that didn't require the speed of (and the cost of) the FedEx service.

Indeed - I once recieved a Media Mail package that traveled IAH-SEA in two days. Prettty cool for me.

I agree, I paid about $50 to overnight some documents from GFK to Burlington, Vt and holy crap, it got there before 10:00 a.m. by using FX. No offense to any UPS lovers, but the places I have lived (GFK and RAP) over the last 15 years, FX is the only one that could get anything in via true "priority". UPS would still charge me an arm and a leg for it, but take up to 5 days longer (repeatedly) to get it to me and FX would be there as advertised or even better. I'm rooting for FX.
135Mech
 
rwy04lga
Posts: 1976
Joined: Mon Jul 18, 2005 7:21 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 7:55 pm

Quoting FI642 (Reply 17):
For a while they even had a fleet of leased 727's painted in the current USPS logo.

Part of my 1/400 collection
Just accept that some days, you're the pigeon, and other days the statue
 
User avatar
par13del
Posts: 6688
Joined: Sun Dec 18, 2005 9:14 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 7:56 pm

Quoting rotating14 (Reply 5):
If FX is buying 767's and 777's, would they already have some insight of what's ahead?? Papa Smith wouldn't let the contract slip away to UPS or somebody else so easily.

Well UPS has government oversight / control, once this contract is put out to bid it is anyones guess who will be the final winner, all FX can do is to submit their bid and pray.
There are too many politicians on both side of the aisle to influence, and at the end of the day, the winner may well be chosen based on which obscure law / bill is being passed and needs votes which has actually nothing whatsoever to do with UPS, essentially, a crap shoot.
 
HPRamper
Posts: 4602
Joined: Sat May 14, 2005 4:22 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 7:56 pm

Quoting B6A322 (Reply 30):
Maybe someone here knows the answer to this, but doesn't UPS already carry some mail on behalf of the USPS? The service is called UPS Mail Innovations.
Quoting aztrainer (Reply 32):
That is a good question as I have received items from Amazon when tracking it it has said that it was a USPS, but when it arrived it was by UPS or FedEx.

Yes they do, FX has a similar program called Smartpost. From what I hear they are quite profitable. It's not the same as regular mail though, it's a special service.

Quoting threeifbyair (Reply 31):
That is ridiculous, but it might explain why the completely bored Fedex Office people were so happy to see me when I would drop off packages for work. Do Office people get a commission for accepting Ground packages too or is Ground not valuable enough?

They get commission for everything they put a scan on. They don't touch the dropboxes nor do they even know the combination to open it. Since they are competitors, they will not even stock the dropbox with supplies if it goes empty.

Quoting aztrainer (Reply 32):
OK, Don't flame me on this, but when the mail comes into a FedEx/UPS facility does it comes in as a bulk load or loose? Could FedEx/UPS or whomever has the contract simply have people at the major sorting facilities to assemble the cargo container so that they could be taken from the sorting facilities to the plane without having to go through the cargo facilities?

It's already loaded in FX ULD containers. The contract allows for the middle-man contractor to take possession of FX containers and load them with freight at their facility before bringing them back. FX simply weighs and loads the containers on the aircraft. When it is inbound, FX puts the postal ULDs directly onto contractor dolly equipment and immediately passes them to contractor control.
Theoretically yea cutting out that contractor can be done, but the post office doesn't want to pay their own employees to do the work.
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 8:04 pm

Quoting HPRamper (Reply 36):
It's already loaded in FX ULD containers. The contract allows for the middle-man contractor to take possession of FX containers and load them with freight at their facility before bringing them back. FX simply weighs and loads the containers on the aircraft. When it is inbound, FX puts the postal ULDs directly onto contractor dolly equipment and immediately passes them to contractor control.
Theoretically yea cutting out that contractor can be done, but the post office doesn't want to pay their own employees to do the work.

Basically, FedEx is providing the air transportation, just as the airlines used to do.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
HPRamper
Posts: 4602
Joined: Sat May 14, 2005 4:22 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 8:15 pm

Quoting mayor (Reply 37):
Basically, FedEx is providing the air transportation, just as the airlines used to do.

That's it. There is some bulk handling of express and first class mail but the vast majority of what FX carries is priority mail which is generally not handled unless it is in a bulk compartment on the aircraft.

The fuss that was mentioned earlier is about first class mail being shipped with the priority mail. It has always been a space available thing, if there is any room left after the priority is loaded, toss in some first class. However, the problem here is that according to the contract postal freight has priority over FX freight on their own aircraft. Someone performing the audit mentioned probably found that FX cans were getting bumped because of excess postal freight, but that a lot of that postal volume was first class mail and therefore not a part of the contract. Proper consolidation of freight in containers could save a lot of space.
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 8:24 pm

Quoting HPRamper (Reply 38):
The fuss that was mentioned earlier is about first class mail being shipped with the priority mail. It has always been a space available thing, if there is any room left after the priority is loaded, toss in some first class. However, the problem here is that according to the contract postal freight has priority over FX freight on their own aircraft. Someone performing the audit mentioned probably found that FX cans were getting bumped because of excess postal freight, but that a lot of that postal volume was first class mail and therefore not a part of the contract. Proper consolidation of freight in containers could save a lot of space.

If that's the case, it seems like FX (being the handler and loader of the a/c) is to blame and not the USPS.


In SLC, the ramp would load the express/air mail and then, before loading any air freight, would load the first class mail, even tho that was space available.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
HPRamper
Posts: 4602
Joined: Sat May 14, 2005 4:22 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 8:34 pm

Quoting mayor (Reply 39):
If that's the case, it seems like FX (being the handler and loader of the a/c) is to blame and not the USPS.

FX doesn't control what goes into the containers at the USPS contractor facilities. Don't get me wrong, plenty of first class mail does travel with the priority, but it's probably only when major problems crop up that someone takes notice. It is basically honor system that if postal goes over their forecast volume and bumps FX freight, it will be priority mail. Doesn't mean that is the case.

Quoting mayor (Reply 39):
In SLC, the ramp would load the express/air mail and then, before loading any air freight, would load the first class mail, even tho that was space available.

Very unusual, at least in my experience, unless it was normal to have plenty of room for freight as well as mail.
 
User avatar
mayor
Posts: 6188
Joined: Sun Mar 09, 2008 3:58 pm

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Wed Jul 18, 2012 9:43 pm

Quoting HPRamper (Reply 40):

Very unusual, at least in my experience, unless it was normal to have plenty of room for freight as well as mail.

No, but I think they were under the mistaken assumption that first class mail rode ahead of air freight, also.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
User avatar
KLASM83
Posts: 397
Joined: Mon Aug 01, 2005 10:08 am

RE: Usps $1 Bil Contract W/ FedEx Expiring Soon

Thu Jul 19, 2012 6:19 am

Quoting HPRamper (Reply 26):
because tossing packages probably shouldn't pay 15-16 bucks an hour when the airlines pay their employees barely half that to do the same thing.

Yeah, I thought it would be an $8 or $9 an hour job, and now with the raise it's $15.29/ hour. Not many hours, granted, but it's still kind of trippy to think that such a simple job would command such a high per hour rate!

Quoting HPRamper (Reply 36):
The contract allows for the middle-man contractor to take possession of FX containers and load them with freight at their facility before bringing them back

FedEx get's the pay to fly it, the middle man does all the work loading it    Now THAT's Logistics (and Logic)!

Pretty good deal for FX!
Don't you want to hang out and waste your life with us?