DLax85

In TA 1.0, what was that additional pay raise on Jan 1, 2024 ??

https://www.reuters.com/business/fed...ar-2023-08-29/

(Reuters) - FedEx Corp said on Tuesday it would increase shipping rates and customs clearance service fees on imports from Jan. 1, 2024 as the parcel delivery company aims to boost its profitability.FedEx Express shipping rates will increase by an average of 5.9% for U.S. domestic, export and import services, the company said in a statement. It will also hike shipping rates for its Ground and Home Delivery units by the same amount. FedEx Freight shipping rates will increase by an average of 5.9% to 6.9%, the company said, adding that these newer rates would apply to only shipments within the U.S "The price adjustments reflect incremental costs associated with the current operating environment," the company said. The Memphis, Tennessee-based firm has been striving to boost its profitability and last year outlined a plan to slash $4 billion in costs by the end of its 2025 financial year. Last fiscal year, FedEx slashed about 29,000 jobs, retired 18 planes, shuttered offices and pared back profit-sapping Sunday deliveries to cut costs.

JackStraw

5.9% is on the low end in an effort to undercut UPS.

DLax85

Over the past 15 years, Fedex and UPS price increases have risen in virtual lock-step. However, annual pilot pay raises have lagged these prices increases almost EVERY year. Under TA 1.0 this would have happened again - the TA included a 3% pay increase in Feb 2024. Given the "current operating environment" I'm unsure why we would find that raise acceptable.

VR,
DLax

Thrust Hold

Turns out they aren't raising prices just to cover our costs. Apparently, there are other costs involved in running this operation.

threeighteen

Or they’re realizing their pilot cost is actually going to go up at some point instead of go down like it would have with this TA

DLax85

Maybe the easiest piece of business data to predict - Fedex & UPS annual price increases. The almost perfection correlation continues. See article below.

If two companies offer virtually identical prices then how are they competing?
Answer: Best value and/or Product Differentiation.

What determines "best value" in the business of world-wide shipping/logistics?
Answer: Reliablity

Pilots are definitely a cost center, the company wants to minimize. But, they are also a critical, and possibly pivotal, component in Fedex reliability. Note the article referencing customers switching to Fedex when UPS labor agreements were uncertain.

Profit = Revenue - Cost. Pilots can have an affect on both variables.

Know our value. Demand our value!

In Integrity, Transparency & Unity (for Everyone),
DLax

************************************************** **** UPS Inc. (NYSE: UPS) said late Thursday that it will raise 2024 tariff rates 5.9% on all air, ground and international services, effective Dec. 26.

The move matches rival FedEx Corp. (NYSE: FDX), which announced a 5.9% increase late last month.

Both carriers have thus reduced their tariff rate increases by 1 full percentage point from 2023’s record increase of 6.9%. Tariff, or noncontract, rates are infrequently utilized in the parcel-delivery world, where virtually all goods move under contract. However, they generally serve as a jumping-off point for contract negotiations.

After FedEx’s announcement, there was speculation that UPS might come in with a higher increase to offset the higher labor costs of the first year of the five-year contract with the Teamsters union.

FedEx’s fairly restrained increase might have been a way to further pressure UPS, especially in the first year of the contract when labor costs are expected to rise as high as 9% year on year.

There was also speculation that UPS, trying to win back business diverted to FedEx and other rivals in the months leading up to the labor agreement, could not risk alienating those customers with an increase that was higher than FedEx’s.

The post UPS to raise tariff rates 5.9%, matching FedEx appeared first on FreightWaves.

Shaman

I've heard numerous pilots refer to flight ops a "cost center. every time I hear it I think back to my accounting class and say that's not what a cost center is.

Merle Haggard

I think most of us say that management VIEWS us as a cost center. The ongoing fight is for them to recognize the added value that we actually do represent.

Ironically, most management could legitimately be viewed as a cost center by the strictest definition.

dckozak

Dean Maciuba
Dean MaciubaDean Maciuba
• Following • Following
Crossroads Parcel ConsultingCrossroads Parcel Consulting

Like FedEx, UPS Has too Many Pilots

Many sources rate UPS pilots as the highest paid in the airline industry, including both passenger and cargo carriers. UPS pilots are also sitting on a fairly recent 2-year contract extension ratified in August of 2022 that resulted in a pay raise that was negotiated just prior to the air cargo industry starting to tank. Unlike FedEx, UPS is more able to fund a pilot buyout while FedEx is sitting on 700 pilot positions that they currently do not need. The passenger airline segment is seeing growing passenger volume while freight carrier volume is down globally, after crazy growth during COVID that is driving over capacity today.

Being a pilot in the cargo industry is a much easier job than serving on a flight crew for a passenger carrier as packages do not complain and resist rule compliance. Like it or not, both UPS and FedEx pilots are going to have to move to probably lower paid positions with the passenger carriers if they choose to remain employed in the industry or retire.




I have lifted this from a public posting on LinkedIn dated around Sept 4th.

Mr. Maciuba is a regular on Linkedin and a consultant speaking (and no doubt) making his current living by speaking to the greater integrator industry (Fedex, UPS, DHL, Amazon). Online his postings are as an "influencer". If you are a member of Linkedin you can add your thoughts about Mr. Maciuba's opinions. It is always interesting to hear non aviators speak with such authority about a profession they only know by way of other's opinions or by way of siting at the airport or on a flight.

Unfortunately this greater sphere of influencers, whether knowledgeable or not, will impact the opinions of the industry press, the larger national press, Wall Street financiers, and of course, political powers whether elected or not.

NotMrNiceGuy

People are so willing to put ignorance on display. As someone that put ten years with the regionals, I can tell you that there was no recovery time needed from a four day trip with with 20 legs that blocked 25 hours.

On the cargo side, I need at least a day to recover from three hub turns that blocked 8 hours.

Unfortunately the supply of interns to write these ignorant pieces is unlimited.