ComingInHot

In light of the recent FedEx earnings call I wanted to hear what others thought the near term hiring outlook might be.

I will be in upgrade class at my regional in a month with FedEx as my number one goal in mind. My buddies are all jumping over to LCCs to get hired at mainline while I decided to stay to get PIC time. Now I'm second guessing myself.

Is it really as bad as the news make it out to be or is this just way overblown? Will hiring slow down or even stop? (Parking planes)

I'm just worried that I'm passing on a seniority number at the legacies while waiting to get my qualifications for FedEx. Or be at the bottom of the seniority list when they stop hiring/growing.

I understand no one can predict the future but I thought an inside view point might be more valuable than what I hear on the news. Thank you in advance!

BluePAX

No one truly knows until the end of a career. That being said, my 2c...the timing of a tanking stock price seems oddly correlated with massive stock buybacks and labor negotiations. As to where to go? Fedex tends to do fine when the pax carriers are struggling, but I wouldn't pass up a job at a legacy for FedEx if it means sitting at a regional.

StarClipper

Go get that seniority number at the legacy and hopefully FedEx hires you from there. There is no guarantee FedEx will hire you from the regional even if you check all their boxes.

Swakid8

In this hiring environment, you need to make moves to get to a mainline carrier ASAP then do what you need to do to get to FedEx from there. Upgrades can be had at United on the coastal bases once you are off of probation if PIC is what you are after as an example….

Alpiner

Agreed, this hiring cycle isn’t going to last forever especially if there’s a deep recession. I’d apply everywhere I’m remotely interested in and see what happens. Even once you get the PIC time it could take years to get on here (if ever). Hard to know how some people get called and others don’t.

pangolin

But it does happen.

KC10 FATboy

My post will not be popular. I think pilot candidates should know the truth.

Fedex's FY23 Q1 Earnings Call is September 22nd, 4:30PM Central Time. Fedex did release preliminary results on the 15th and the information shocked the markets. CEO Subramaniam was interviewed on Mad Money. Jim Cramer asked if the world was in a recession and Subramaniam answered yes but also said Fedex will meet FY25 financial targets. Interesting, he's forecasting the next two years but couldn't read the tea leaves that past three months. I'll get back to those FY25 targets.

Is the world crashing? Some say yes. Some say no. The coming weeks will be crucial to Fedex. Will it have egg on its face or will other company's report similar results and expectations? UPS's next Earnings Call is Oct 25th, 8:30AM Eastern. Some reports are critical of Fedex.

My opinion, Fedex is in danger. Over the summer came the reports about the Fedex Ground contractors losing money and many were close to bankruptcy. Fedex canceled contracts with their largest Ground contractor as he went to the press with the bad news and even attempted unionism among the contractors. Now Ground drivers are threatening a walkout during Black Friday.

UPS is the largest package delivery company in the world. If you have listened to a Fedex earnings call, you will hear the analysts beat up Fedex management about how Fedex's costs are almost four times that of UPS and how they will fix that. For example, UPS operates one network no matter which level of shipping priority you choose. FedEx operates three distinct networks: Express, Ground and Freight. Three overlapping networks. UPS and Amazon, one network. Having three different types of trucks deliver packages into the same business park or residential neighborhood is expensive and wasteful. It is possible for a home to receive packages from all three FedEx trucks in a day whereas if UPS was the shipper only one truck would have been used. But not for long.

In 2020 Fedex announced that it was testing putting Express packages onto Ground trucks for the last mile of delivery bringing the two networks closer together but still inefficiently separate. Smith had always been against this but as he goes off into retirement he will slowly lose control over the business. In June 2022 (with not much fanfare I'd say), Fedex announced Network 2.0 where Express and Ground would become much more integrated and expanded throughout the entire network and Freight and Ground would also start combining thus reducing overlap. Fedex executives said this would them $2 billion annually as they expect to close 100 stations. Additionally, internationally, as passenger bellyfreight becomes more available, Fedex will move freight to passenger contractors rather than the Fedex Global Air Network.

Why does that matter to Fedex pilots? UPS currently ships about 6 million more packages a day worldwide than Fedex. UPS (according to APC) has 3,352 pilots. Fedex has 5,912 pilots (as of today). Nearly every big airport that I fly to, Fedex has almost double the amount of UPS planes sitting on the ramp (and on some ramps they have a more planes). Should Fedex be forced to consolidate networks like what UPS operates, and I believe that day is coming very soon as the investors and analysts demand it, Fedex will require much less aircrew and airplanes; especially after Network 2.0 or even 3.0 is perfected. The economics of shipping packages via trucks is much more efficient than by air. As this consolidation furthers, more and more city pairs will be connected via truck.

Just a year ago fellow Fedex pilots told me I was crazy for saying something like this. Now with the recent earnings results, doom and gloom and announcement of Network 2.0, I believe I am more right than ever.

CFIGUY22

I do agree with you that FedEx has a big ground problem That needs to be fixed. FedEx has spent a tremendous amount of money on new sort facility’s, buying airplanes, and TNT in recent years, which may be why you are seeing such a discrepancy comparing balance sheets. Streamlining will happen and raj has already discussed this. Am I crazy, ups and FedEx have long been known to have 2 different business models. UPS domestic and worldwide ground delivery and FedEx global air express network. FedEx has lot more airplanes hence the need for more pilots. The express network alone generates about half off all revenue at FedEx corporation. UPS is a larger company, you can’t just look at how many packages they deliver, they have a different business model although overlap.

In my opinion, yes FedEx has issues with their business, but the pilots are essential to running it. A lot of the money being spent right now, while painful for Wall Street to stomach, has been to drive profit margins up and reduce costs in the future ie. (automated sort facilities, newer airplanes, integrated TNT network). It’s not happening like they said it would back in June, but there is a reason why raj said 2025 target was still a go.

C17B74

Just curious. Expansion is good when markets support it and regarding the hiring dilemma based on current events which fork in the road is better: 1. Continuous hiring max effort or 2. slow it down or stop for a bit to reassess the situation? Impacts of max hiring and demand dissipates significantly is the new hire low hanging fruit. History in Purple Pilot world was to decrease the min guarantee to keep folks on I believe (let me know if a furlough was involved). Slowing hiring down would definitely negate the lowering of min guarantee. Not advocating nor part of Purple of course, but maybe the AVA/Draft Kings or whatever had an 8 ball worth having to bank on. Definitely not negotiation savvy but it does make me go hmmm.

*Personally - based on the complaints, issues and concerns on the other threads relating to scheduling issues during the viral debacle you still have a significant gap to fill seats to help tranq-dart the optimizer for better QOL if that is even possible?

**Ground game definitely needs to pickup no doubt as excellent service wins the day and is paramount during lean times.

DJIA

Question is how much of this is being caused by Amazon slowly chipping away at market share/ operational missteps (ie poor last mile infrastructure)/ actual Macro trends. Bloomberg has an article suggesting it is more of an Amazon story.

Had a friend bring up the Amazon threat at fdx indoc 4 years ago. This was around the time of poor FDX stock performance as well. He recalled that upper mgmt was very dismissive of it.

If i had to rank deliveries to my house it would be Amazon on top, UPS, and FDX a distant 3rd. And i’m sure that is because of FDX contracting out the last mile delivery to unreliable third parties.