alaskanjackal
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Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 2:09 am

TL;DR alert: questions at the bottom.

A long-time mantra has been, "FedEx is better for air shipments, but UPS is better for ground."

As anyone who's heard the story of Fred Smith's college-paper grade, FedEx started in 1971 as an air-based express parcel carrier and only added Ground service relatively late when they purchased RPS (which they later rebranded as FedEx Ground) in 1998.

UPS started, of course, much earlier (in 1907) as a ground-based parcel carrier and has added air service (and accompanying overnight products) organically and launching its own wholly-owned airline comparatively late, in 1988.

FedEx still operates FedEx Express and FedEx Ground as independent subsidiaries, sharing little, if any infrastructure. A business sending or receiving an Express and a Ground package on the same day will be visited twice. FedEx Express packages travel almost entirely by air, never touching FedEx Ground's surface-based network.

In contrast, UPS operates a combined network. A single UPS truck will pick up or deliver both Air and Ground packages in a single stop. Moreover, if a parcel is tendered for 2nd Day Air or 3 Day Select but UPS's ground infrastructure can get the package to its destination in time (frequently the case if transit includes weekend days), it will often travel overland instead of consuming limited space and expensive jet-A.

Even though both carriers now offer both air and ground and are fairly competitive in price and service standards in both areas nationwide, FedEx's Express division is the company's bread and butter, and a huge chunk of the company's volume still comes from Express shipments. UPS, in contrast, has continued to grow their Air service offerings, but a large percentage of their volume and revenue comes from Ground. (It's also worth noting that UPS's total volume across all of its services is significantly more than FedEx's.)

Furthermore, I've seen references that state that FedEx's fleet dwarf's UPS's. One source claims almost 700 jets in FedEx's arsenal compared to 268 on hand at UPS, clearly illustrating FedEx's superiority in the express shipment arena.

Or does it? Wikipedia (and, similarly, this article, although not this one) quotes 385 aircraft in FedEx's trunk fleet and 284 in their feeder fleet. UPS, on the other hand, claims 251 aircraft in their trunk fleet and doesn't specify their feeder fleet, since they (apparently) contract their feeder flight operations out to third-party carriers like Ameriflight and Wiggins. (That source claims FedEx doesn't contract out its feeder flight operation, although a review of some feeder flights on FlightAware doesn't agree.)

So, is UPS's air operation actually smaller than FedEx's? Ignoring the feeder question, perhaps a bit--FedEx does have 385 mainline aircraft to UPS's 251. The question is: why, and what effect does that have? UPS is still able to serve virtually every ZIP code in the country with overnight service, as is FedEx. How is UPS able to do so with fewer aircraft?

Here's my guess:

FedEx and UPS probably ship similar volumes of express shipments. (UPS doesn't publicly break the numbers of air vs. ground out, so it's hard to compare.)

FedEx requires more aircraft to service this volume because everything that is shipped Express travels by air. If someone ships something on a Monday from Minneapolis to St. Louis by Express Saver, FedEx lets it sit overnight in Minneapolis and then flies it from Minneapolis to Memphis on the Tuesday morning flight (the nighttime departures are often reserved for higher priority Overnight shipments), where it is deferred until the Memphis day sort on Wednesday and then put on the afternoon flight Wednesday afternoon. It then sits at Kansas City overnight and goes out for delivery Thursday morning.

UPS, conversely, would likely take a 3-Day Select shipment sent out on Monday and put it on a truck departing south Tuesday morning. It would arrive in Des Moines on Tuesday afternoon, depart Des Moines Tuesday evening, arrive in Lenexa on Wednesday morning, and then make its way Wednesday afternoon to the local customer center for the customer's area and then out for delivery Thursday morning.

Thus, a package sent 3-Day Select (or, often even 2nd Day Air) on UPS may never see the inside of a plane. Fewer shipments traveling by air means fewer aircraft needed.

FedEx doesn't have the option to do as UPS does, because a package sent FedEx Express can't use FedEx Ground's infrastructure. So the majority of FedEx destinations need to be visited not once daily (as UPS often does) but rather twice daily--an evening departure and morning arrival for the priority Overnight stuff and a morning departure and an evening arrival for the deferred 2 Day and Saver stuff. A check of random city pairs on FlightAware confirms that FedEx often flies two flights a day into mid-sized cities (e.g. MCI, PIT) whereas UPS only visits once a day, likely because a lot of the volume in the deferred Air shipments instead goes by Ground, and only the priority Next Day Air plus a much smaller fraction of 2 Day Air and 3 Day Select volume that won't make the service standards otherwise will travel by air. If destinations only require one flight a day instead of two, fewer aircraft are necessary to meet the needs.

A second supposition is that UPS's more extensive ground operation and ability to move Air shipments via Ground's infrastructure reduces their reliance on the air division. FedEx Express serves tons of small airports with FedEx Feeder aircraft--one example being Dothan, Alabama, which has a nightly FedEx Feeder flight to Memphis. A review of Dothan on FlightAware shows no similar flight to Louisville. My guess is that instead of relying on feeder aircraft, UPS simply moves Air shipments to nearby regional UPS hubs--likely to UPS's massive Atlanta sort center, to which a trailer from Dothan would arrive in time to then make UPS's late-night ATL-SDF flight. In fact, this seems to happen even in larger cities than Dothan--Tallahassee has a daily FedEx TLH-MEM flight on a 752, whereas there's no corresponding TLH-SDF flight, because UPS can dispatch a trailer to Atlanta and only then (as necessary) fly them onward to SDF or, as service standards allow, send them overland instead. Fewer destinations means fewer aircraft needed, even for the same volume.

So, what's my question for the A.net boards?

1) What are the actual sizes of UPS's air fleet as compared to FedEx's fleet after accounting for contract feeders? Are they similar, or is UPS still bigger?
2) How many destinations are served by UPS's air operation as compared to FedEx's? Wikipedia claims 727 for UPS vs. "375+" for FedEx, but that's not cited and seems contrary to actual experience.
3) How does UPS handle (likely) similar volumes with fewer aircraft and a smaller air footprint? Are my suppositions about how the two networks work a plausible (or even actual) explanation?

I thought this post might result in some interesting analysis on the subject of the two carriers and their aviation operations.
 
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flyPIT
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 3:19 am

One thing to keep in mind is FedEx has the USPS contract. This requires a huge amount of additional lift.

UPS is also very conservative with their air network. Domestically there are cities FX serves that UPS dosn't such as PWM, CHS, and SAV. UPS doesn't even serve SFO.

Internationally, UPS uses A LOT of contract carriers. Look no further than the ramp at their CGN hub. Half the ramp is Star Air 767s carrying UPS volume:
Image

In addition, UPS uses a substantial amount of belly cargo internationally.
FLYi
 
USAirKid
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 4:15 am

I'd push back against your assertion that FedEx doesn't use trucks for Express.

I briefly worked for a trucking carrier that had a major contract for Airborne Express, something like 50% of the 2-day package volume could be moved without ever touching an airplane. Moving freight by truck is much cheaper than moving it by airplane, so I'd doubt that FedEx would move freight by air when they didn't have to to meet the service requirements.

I went looking around for a source specific to FedEx Express, but I couldn't quickly find it. That being said, I'd expect that the bean counters at FedEx are as good or better than the ones at Airborne Express, and try to use trucks when and where they can.
 
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UPlog
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 7:15 am

As UPS pilot I can certainly state the air network is no where near 727 destinations. I doubt it’s more than 200.
Also a significant volume of UPS and FedEx traffic internationally is via belly space on commercial airlines, very similar to DHL model.
 
VSMUT
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 8:12 am

flyPIT wrote:
Internationally, UPS uses A LOT of contract carriers. Look no further than the ramp at their CGN hub. Half the ramp is Star Air 767s carrying UPS volume:
Image


That's only the northern side of the cargo ramp. The south side is filled with the plethora of smaller feeders like ATRs and 737s, easily over 20 per night.
 
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flyPIT
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 2:00 pm

VSMUT wrote:
flyPIT wrote:
Internationally, UPS uses A LOT of contract carriers. Look no further than the ramp at their CGN hub. Half the ramp is Star Air 767s carrying UPS volume:
Image


That's only the northern side of the cargo ramp. The south side is filled with the plethora of smaller feeders like ATRs and 737s, easily over 20 per night.

Yes.
FLYi
 
GalaxyFlyer
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 2:22 pm

flyPIT wrote:
One thing to keep in mind is FedEx has the USPS contract. This requires a huge amount of additional lift.

UPS is also very conservative with their air network. Domestically there are cities FX serves that UPS dosn't such as PWM, CHS, and SAV. UPS doesn't even serve SFO.

Internationally, UPS uses A LOT of contract carriers. Look no further than the ramp at their CGN hub. Half the ramp is Star Air 767s carrying UPS volume:
Image

In addition, UPS uses a substantial amount of belly cargo internationally.


Can’t say about the other cities, but KPWM is served by FDX for one customer-LL Bean. I doubt FDX would serve it without that contract.

GF
 
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flyPIT
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 2:33 pm

FX has been in PWM for as long as I can remember (my first trip there was almost 20 years ago); UPS had the LL Bean contract at one point yet they only served PWM during Peak at the time.
FLYi
 
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 2:55 pm

UPS Air network is smaller than FDX. Trucks cost a lot less than Aircraft. When you ship Next day or 2 Day on UPS, chances are it never sees an aircraft. I've seen shipments make it from PHL to MCO in 1 day via ground. UPS is a much more efficient system over all than FDX primarily due to labor. UPS is union. FDX only has pilots as Union. This is why FDX shouldn't be transporting air via ground. FDX subcontracts out their ground network. This reduces labor costs but increases operational costs. Pro's and con's to the way each company operates. I am seeing much more aircraft utilization at UPS as in past years. UPS is also short of lift hence more 747-8's and 767's. UPS is contacting out to Western Global still after peak because of needing additional aircraft. Both Airlines are on hiring sprees and are offering flow thru programs from feeder networks now.
 
jetblueguy22
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 3:45 pm

flyPIT wrote:
FX has been in PWM for as long as I can remember (my first trip there was almost 20 years ago); UPS had the LL Bean contract at one point yet they only served PWM during Peak at the time.

We still have the LL Bean contract. We run an operation right in their facility. The air just doesn’t flow through PWM outside of peak. It goes to MHT.
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club
 
jetblueguy22
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 4:01 pm

alaskanjackal wrote:
TL;DR alert: questions at the bottom.

A long-time mantra has been, "FedEx is better for air shipments, but UPS is better for ground."

As anyone who's heard the story of Fred Smith's college-paper grade, FedEx started in 1971 as an air-based express parcel carrier and only added Ground service relatively late when they purchased RPS (which they later rebranded as FedEx Ground) in 1998.

UPS started, of course, much earlier (in 1907) as a ground-based parcel carrier and has added air service (and accompanying overnight products) organically and launching its own wholly-owned airline comparatively late, in 1988.

FedEx still operates FedEx Express and FedEx Ground as independent subsidiaries, sharing little, if any infrastructure. A business sending or receiving an Express and a Ground package on the same day will be visited twice. FedEx Express packages travel almost entirely by air, never touching FedEx Ground's surface-based network.

In contrast, UPS operates a combined network. A single UPS truck will pick up or deliver both Air and Ground packages in a single stop. Moreover, if a parcel is tendered for 2nd Day Air or 3 Day Select but UPS's ground infrastructure can get the package to its destination in time (frequently the case if transit includes weekend days), it will often travel overland instead of consuming limited space and expensive jet-A.

Even though both carriers now offer both air and ground and are fairly competitive in price and service standards in both areas nationwide, FedEx's Express division is the company's bread and butter, and a huge chunk of the company's volume still comes from Express shipments. UPS, in contrast, has continued to grow their Air service offerings, but a large percentage of their volume and revenue comes from Ground. (It's also worth noting that UPS's total volume across all of its services is significantly more than FedEx's.)

Furthermore, I've seen references that state that FedEx's fleet dwarf's UPS's. One source claims almost 700 jets in FedEx's arsenal compared to 268 on hand at UPS, clearly illustrating FedEx's superiority in the express shipment arena.

Or does it? Wikipedia (and, similarly, this article, although not this one) quotes 385 aircraft in FedEx's trunk fleet and 284 in their feeder fleet. UPS, on the other hand, claims 251 aircraft in their trunk fleet and doesn't specify their feeder fleet, since they (apparently) contract their feeder flight operations out to third-party carriers like Ameriflight and Wiggins. (That source claims FedEx doesn't contract out its feeder flight operation, although a review of some feeder flights on FlightAware doesn't agree.)

So, is UPS's air operation actually smaller than FedEx's? Ignoring the feeder question, perhaps a bit--FedEx does have 385 mainline aircraft to UPS's 251. The question is: why, and what effect does that have? UPS is still able to serve virtually every ZIP code in the country with overnight service, as is FedEx. How is UPS able to do so with fewer aircraft?

Here's my guess:

FedEx and UPS probably ship similar volumes of express shipments. (UPS doesn't publicly break the numbers of air vs. ground out, so it's hard to compare.)

FedEx requires more aircraft to service this volume because everything that is shipped Express travels by air. If someone ships something on a Monday from Minneapolis to St. Louis by Express Saver, FedEx lets it sit overnight in Minneapolis and then flies it from Minneapolis to Memphis on the Tuesday morning flight (the nighttime departures are often reserved for higher priority Overnight shipments), where it is deferred until the Memphis day sort on Wednesday and then put on the afternoon flight Wednesday afternoon. It then sits at Kansas City overnight and goes out for delivery Thursday morning.

UPS, conversely, would likely take a 3-Day Select shipment sent out on Monday and put it on a truck departing south Tuesday morning. It would arrive in Des Moines on Tuesday afternoon, depart Des Moines Tuesday evening, arrive in Lenexa on Wednesday morning, and then make its way Wednesday afternoon to the local customer center for the customer's area and then out for delivery Thursday morning.

Thus, a package sent 3-Day Select (or, often even 2nd Day Air) on UPS may never see the inside of a plane. Fewer shipments traveling by air means fewer aircraft needed.

FedEx doesn't have the option to do as UPS does, because a package sent FedEx Express can't use FedEx Ground's infrastructure. So the majority of FedEx destinations need to be visited not once daily (as UPS often does) but rather twice daily--an evening departure and morning arrival for the priority Overnight stuff and a morning departure and an evening arrival for the deferred 2 Day and Saver stuff. A check of random city pairs on FlightAware confirms that FedEx often flies two flights a day into mid-sized cities (e.g. MCI, PIT) whereas UPS only visits once a day, likely because a lot of the volume in the deferred Air shipments instead goes by Ground, and only the priority Next Day Air plus a much smaller fraction of 2 Day Air and 3 Day Select volume that won't make the service standards otherwise will travel by air. If destinations only require one flight a day instead of two, fewer aircraft are necessary to meet the needs.

A second supposition is that UPS's more extensive ground operation and ability to move Air shipments via Ground's infrastructure reduces their reliance on the air division. FedEx Express serves tons of small airports with FedEx Feeder aircraft--one example being Dothan, Alabama, which has a nightly FedEx Feeder flight to Memphis. A review of Dothan on FlightAware shows no similar flight to Louisville. My guess is that instead of relying on feeder aircraft, UPS simply moves Air shipments to nearby regional UPS hubs--likely to UPS's massive Atlanta sort center, to which a trailer from Dothan would arrive in time to then make UPS's late-night ATL-SDF flight. In fact, this seems to happen even in larger cities than Dothan--Tallahassee has a daily FedEx TLH-MEM flight on a 752, whereas there's no corresponding TLH-SDF flight, because UPS can dispatch a trailer to Atlanta and only then (as necessary) fly them onward to SDF or, as service standards allow, send them overland instead. Fewer destinations means fewer aircraft needed, even for the same volume.

So, what's my question for the A.net boards?

1) What are the actual sizes of UPS's air fleet as compared to FedEx's fleet after accounting for contract feeders? Are they similar, or is UPS still bigger?
2) How many destinations are served by UPS's air operation as compared to FedEx's? Wikipedia claims 727 for UPS vs. "375+" for FedEx, but that's not cited and seems contrary to actual experience.
3) How does UPS handle (likely) similar volumes with fewer aircraft and a smaller air footprint? Are my suppositions about how the two networks work a plausible (or even actual) explanation?

I thought this post might result in some interesting analysis on the subject of the two carriers and their aviation operations.

I’m on the planning side for Brown. Let’s see how well I can help.

1) Our own fleet is 256 aircraft with 31 on order at the end of Q1. We lease an additional 298.

2) This I don’t have a count of. But it’s pretty hard to get an actual count because of all the leasing we do. Small Feeder Aircraft carry no UPS branding, yet visit a lot of smaller airports every day. Not to mention the feeder carriers we utilize in Europe.

3) You’re on the right track. Our ground footprint is massive and the efficiencies we gain with that is huge. From my building in SW CT we can hit as far down as Delaware and most of Maine by the next day without ever seeing an aircraft. Two day shipments are even better, we can get to nearly everything east of Chicago without ever touching a plane.

We also utilize our ground network heavily for next day shipments over the weekend. We don’t need to fly it Friday night for Monday delivery, so we don’t. It’s cheaper to put it on a truck with a sleeper team and drive it to Louisville. We can do that almost nationwide and still make the Monday Commitment. I’ve seen the cost difference between ground, rail, and Air, you’d be shocked to see the actual savings putting it over the road.

As for FedEx, I can’t really speak for them and I’m not even going to pretend. But from what I can tell our network is set up more efficiently and allows us more options to control cost. Their advantage is for sure on the labor cost, however.
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club
 
alaskanjackal
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Re: Comparing FedEx vs UPS air operations and fleet

Tue Jun 18, 2019 4:43 pm

Great responses and helpful to understand the networks--even better than I was expecting! Thanks!

Interesting points about UPS using a lot more contract carriers.

jetblueguy22 wrote:
As for FedEx, I can’t really speak for them and I’m not even going to pretend. But from what I can tell our network is set up more efficiently and allows us more options to control cost. Their advantage is for sure on the labor cost, however.


That pretty much has been my take on UPS vs. FedEx. My question has always been that with a more efficient operation, why isn't UPS cheaper than FedEx? I suppose the higher labor cost (unionized workforce) may have some effect on that, but a trucker or a delivery driver who makes an extra $50 per day in wages spread over the 50 or 500 packages in the back of his/her truck is dwarfed by the thousands of gallons of fuel saved by not flying packages that can be moved over the road.

jetblueguy22 wrote:
It’s cheaper to put it on a truck with a sleeper team and drive it to Louisville. We can do that almost nationwide and still make the Monday Commitment. I’ve seen the cost difference between ground, rail, and Air, you’d be shocked to see the actual savings putting it over the road.


Interesting that you made that comment. Rail is another area that UPS surpasses FedEx. I've seen it referenced that UPS tries to put anything going more than about 700 miles on a train. Having worked in the railroad industry myself for a short time, I'm well aware of the significantly improved fuel economy of a locomotive-hauled train over a truck. (For those not aware, a train will have ~12,000 horsepower pulling 100 53' or 200 28' trailers vs. ~500 horsepower for one 53' or two 28'. The rolling resistance of a train is orders of magnitude less than a truck, thanks to the steel wheels on steel rail: each of the eight wheels on any given car only contacts the ground with the surface area of about half a dime, and a 100-car train only has about an 8.5x11 sheet of paper's worth of contact with the ground.)

The big issue, of course, is time-competitiveness. Some railroads, like BNSF, have really worked to make hotshot intermodal trains very nearly time-competitive with team-driven trucking, and there's a reason UPS is BNSF's biggest customer. (Just sit by the tracks next to I-40 in the Southwest for any length of time and guaranteed you'll see UPS trailers racing by before too long; the Los Angeles-Chicago route is a massive one for BNSF and Brown.) That said, FedEx still doesn't really believe in intermodal rail and still uses sleeper team trucking even for cross-country shipping, which may explain in part why FedEx Ground's service standards are a day shorter in some shipping lanes than UPS's.

Anyway, as someone who has seen the numbers, I'm curious how much rail saves over truck--presumably a significant amount, but an amount that FedEx is foolish to ignore? Or is it only a moderate savings?
 
bhxdtw
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Re: Comparing FedEx vs UPS air operations and fleet

Wed Jun 19, 2019 12:42 am

I'm interested in this discussion too.

For one, i'm curious why I see various UPS and occasionally FEDEX planes routing thru non hubs...
For example a UPS 767 flying DTW to ORD or GRR to MSP. Those are just examples to illustrate my point but ive seen similar on FR24 and other tracking sites.
Usually larger mainline aircraft , not feeder.
Also, on a side note, why has MSP been seeing UPS 747-8 eqpt ? I've seen some photos of them and I didn't realize that any other stations other than SDF or ANC saw those.

Thx
 
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flyPIT
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Re: Comparing FedEx vs UPS air operations and fleet

Wed Jun 19, 2019 1:42 am

alaskanjackal wrote:
My question has always been that with a more efficient operation, why isn't UPS cheaper than FedEx?

Simply put, why should they be? The efficiencies in the UPS network may allow for greater margins but it is a duopoly. One raises rates then the other follows and vice versa. One adds a fuel surcharge, so does the other, etc.
FLYi
 
VC10DC10
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Re: Comparing FedEx vs UPS air operations and fleet

Thu Jun 20, 2019 4:36 pm

flyPIT wrote:
alaskanjackal wrote:
My question has always been that with a more efficient operation, why isn't UPS cheaper than FedEx?

Simply put, why should they be? The efficiencies in the UPS network may allow for greater margins but it is a duopoly. One raises rates then the other follows and vice versa. One adds a fuel surcharge, so does the other, etc.


Just pointing out that in a deregulated environment, such as the express delivery business, the cost of providing service doesn't determine the price--the value the marketplace puts upon the good or service does.
 
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Re: Comparing FedEx vs UPS air operations and fleet

Mon Jun 24, 2019 3:06 pm

 
jetblueguy22
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Re: Comparing FedEx vs UPS air operations and fleet

Sun Jul 07, 2019 6:07 am

bhxdtw wrote:
I'm interested in this discussion too.

For one, i'm curious why I see various UPS and occasionally FEDEX planes routing thru non hubs...
For example a UPS 767 flying DTW to ORD or GRR to MSP. Those are just examples to illustrate my point but ive seen similar on FR24 and other tracking sites.
Usually larger mainline aircraft , not feeder.
Also, on a side note, why has MSP been seeing UPS 747-8 eqpt ? I've seen some photos of them and I didn't realize that any other stations other than SDF or ANC saw those.

Thx

Here's the thing, SDF, RFD, PHL, and ONT may be our major sorting facilities, but it doesn't mean every piece that goes into the air network needs to flow through those hubs. So lets take your DTW-ORD example. Perhaps, for whatever reason, there are a large amount of pieces that move between those two areas. Maybe it's car parts, or just a geographical connection. We have the opportunity to take pieces out of SDF or RFD and move it from origin to destination in one shot. We call it bypass.

The other reason can simply be lift needs. Maybe the gateway at DTW has a huge amount of inbound pieces, but significantly less outgoing. ORD on the other hand is the opposite. Instead of sending an extra plane to ORD that is only half full, and receiving one from DTW the same way we can better utilize that aircraft by loading up the early pickups onto the DTW, and then it can sweep the extra cargo in ORD. It may not be the traditional "sweeper" flights everyone thinks about, but it's a planned thing to better utilize our assets.

Can't speak exactly on the 747, but MSP does service a huge area. Plus if the YWG feed comes in heavy they have room for the volume.
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club
 
jetblueguy22
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Re: Comparing FedEx vs UPS air operations and fleet

Sun Jul 07, 2019 6:10 am

UPS Pilot wrote:

My best friend is in Business Development for brown, and the discounts he's told me FX is handing out is borderline outrageous. We're talking customers getting 2 Day for $8 a piece with pickups in the middle of nowhere. And I don't mean suburban New Jersey, I mean backwoods Minnesota. Nobody can make money at that price.
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club
 
UPS Pilot
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Re: Comparing FedEx vs UPS air operations and fleet

Wed Jul 17, 2019 1:06 pm

jetblueguy22 wrote:
UPS Pilot wrote:

My best friend is in Business Development for brown, and the discounts he's told me FX is handing out is borderline outrageous. We're talking customers getting 2 Day for $8 a piece with pickups in the middle of nowhere. And I don't mean suburban New Jersey, I mean backwoods Minnesota. Nobody can make money at that price.


That is outrageous. My understanding they have been doing that for years too. Doing it for higher revenue but lower profit. I think we will see FDX integrate Express with Ground someday, like UPS.
 
jetblueguy22
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Re: Comparing FedEx vs UPS air operations and fleet

Sun Jul 21, 2019 6:20 am

UPS Pilot wrote:
jetblueguy22 wrote:
UPS Pilot wrote:

My best friend is in Business Development for brown, and the discounts he's told me FX is handing out is borderline outrageous. We're talking customers getting 2 Day for $8 a piece with pickups in the middle of nowhere. And I don't mean suburban New Jersey, I mean backwoods Minnesota. Nobody can make money at that price.


That is outrageous. My understanding they have been doing that for years too. Doing it for higher revenue but lower profit. I think we will see FDX integrate Express with Ground someday, like UPS.

They need to create efficiencies in their network to remain competitive. Their lower wage advantage gets destroyed by the increased cost of transportation. MEM has to be a nightmare capacity wise. The amount of volume they could probably take out of the air network and inject in the ground network has to be staggering.
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club

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