Saturday, January 16, 2010

FedEx Express Not Out of the Woods Yet

Martha Coakley, the MA Attorney General and candidate for the Senate seat vacated by the late Ted Kennedy, paid a visit yesterday to a UPS facility in Watertown, MA to meet with Teamsters Local 25 and to sign on to support the Express Carrier Employee Protection Act.

UPS and the Teamsters claim that FedEx has operated at an unfair advantage since its inception by being allowed to classify employees of the Express business unit as railroad and airline employees. UPS employees are organized under the Teamsters.

Coakley's support comes after last month's ruling that the IRS would drop all pending investigations into FedEx Ground operations. The Ground business unit was under investigation for the same employee misclassification which would have lead to the IRS' involvement in auditing previous years of FedEx revenue.

Also present was Sean O'Brien, president of Teamsters Local 25. "This loophole has allowed FedEx to operate on an unfair playing field," O'Brien said. "Most workers at FedEx in the Boston area don't have anything to do with aircraft operations, yet they are trapped under the jurisdiction of the Railway Labor Act. These sorters, drivers, truck mechanics and package delivery drivers deserve the opportunity to join a union to improve their working conditions and benefits."

The Express Carrier Employee Protection Act is cleverly attached to the FAA reauthorization bill which will be heard and discussed by the Senate in the coming months. Some government action is expected.

Teamsters Gain Support From Coakley for FedEx Express Carrier Legislation -- BOSTON, Jan. 15 /PRNewswire-USNewswire/ --

Saturday, January 9, 2010

Retail Pricing at Pack and Ship Stores - Is There a Better Way?

[note: this article is in response to the large number of new Facebook fans PA & Associates has garnered since last month; many of which are not commercial shippers, but retail consumers who will, from time to time, need to ship a package FedEx or UPS]

A few years ago, I was in a pack and ship store (the type of retail operation offers post office boxes/mail receipt, shipping supplies, ships packages FedEx/UPS, etc.) picking up some mail. At the counter was a delightful, elderly woman with one small, beautifully wrapped holiday package.

She approached the counter and the clerk asked if he could help her. She said, "Yes; I'd like to send this Christmas present to my grandson in Boise, Idaho. Can you tell me how much that would cost?". Recalling his sales training, the young man working the counter went right in for the kill, "sure -- I'm assuming since its a gift its valuable and you want to make sure it gets there, right?". Grandma replied, "yes, I would guess so". And with that, the clerk had the open door to scare the kindly old woman in the hazards of blindly handing Junior's package off to the black hole that is the US Postal Service versus sending the package through the highly-reliable and trackable service of a parcel package carrier.  The whole time, I'm eavesdropping while I pretend to sort the mail from my box.

She seemed very thankful that the clerk had taken such an interest in her and the package's well-being. After her crash course in parcel shipping, she was sold on the value of sending the package UPS. The clerk took the package from her and placed it on the scale. He called out the weight of the small box to her, "Looks like five pounds...from here to Boise would be $65". She seemed bewildered at the price, but knowing that it was important to have the extra care and handling of Brown on her side, she nodded her head. I just about had a coronary. It took everything in me not to come to her rescue, put my arm around her shoulders and escort her outside to safety -- and ship the package on her behalf at about a 90% savings.

To understand the independent pack and ship retail pricing, you need to know that FedEx and UPS provide three levels of pricing: daily rates, retail rates and discounted rates. Simply put, daily rates are undiscounted "list rates" offered to commercial shippers who have a daily UPS pickup. Retail rates are also undiscounted and provided to shippers that do not have a daily pickup with UPS -- in the past, these were also called counter rates. Retail rates are usually 13%, or so, higher than the daily rates. The remainder of the shippers have some carrier agreement in place with UPS and/or FedEx that provide some level of discount from the daily rate based on package volume and spend.

Independent pack and ship facilities -- those not part of the FedEx Office (formerly Kinko's) or UPS Store system -- usually use the retail rate and add a markup to the price. Remember that the retail rate is already 13% higher than the "list" rate published at or The "independents" frequently have discounts with UPS and FedEx and make a significant profit margin between the amount they charge their customers and what the carriers charge them.

Is there a better way?

For the average person needing to ship a package FedEx or UPS, here are some tips to reduce the cost:

  • If you're employer has a daily pickup and relationship with FedEx or UPS, inquire with your managers or mailroom about shipping the package for you (check with your Human Resources department about company policy). Offer to reimburse your employer for the shipment. If you use one of the "user defined" fields when you create the airbill to include your name or other identifying text, it will be quite easy to find that shipment in the billing data from the carrier for reimbursement.
  • Use the US Postal service -- although the tracking isn't as sophisticated as FedEx and UPS, they offer a number of options at a much, much lower rate. For example, Granny's box would have shipped for $4.95 using the Flat Rate Box (inclusive price, no surcharges, boxes and pickup are free).
  • And a tip for reducing the shipping fees for items you order online; look for an option to use your own account number (if you have one). Always try to send the package to a commercial address, such as your place of employment, if given the option. Online retailers will pass on the FedEx and UPS residential delivery surcharge to you when you state your home address as your delivery address.

Tuesday, January 5, 2010

2009: The Year of Paralysis - How Business is Like Surfing

Now that we've turned the corner and closed the last chapter on the year 2009, I'm seeing many posts, tweets and status updates about people ready to say goodbye to the year that was. I will agree that 2009 certainly wasn't the best year for many (in the way we all usually measure success). For some businesses, though, 2009 was a critical and pivotal year for business.

For starters, most trials of any type usually produce something positive. The old adage, "what doesn't kill you will only make you stronger" tends to be true most of the time. Considering the trial by fire that 2009 was for many individuals and businesses, the tough times do serve to burn away the dead brush and make way for healthy growth to come. And, in some cases, the fire got so hot under some businesses that much of what was built (or, really, the unnecessary bloat that was piled on over the years) was burned away so completely that refinement took place; not unlike the way that impurities are scoured from gold to create a more pure and valuable form.

I was recently reflecting with my business partner on what this past year has brought (and what it hasn't).  We discussed how interesting it was that the year started with so much activity. Smaller, more nimble businesses were among our new clients as their CFOs and CEOs were about cutting costs and managing indirect spend categories in an effort to thoroughly ensure the careful stewardship of their organizations and to go about the hard tasks of making difficult decisions designed to weather this storm and ensure that the value of what they serve their market would survive when their market returned. Thinking about a matrix for a second, I'll put these leaders and their businesses in the lower, left quadrant -- SMB market leaders at the early part of the year that took advantage of cost reduction, spend management and looked after the health of their organizations.

At the other end of matrix -- larger companies and later in the year -- we found that most of them couldn't get out of their own way to make a decision. Was it the confusing signals coming from employment numbers, the stock market, the media? A number of false starts and no real turnaround to the economy? I think that's part of it.

Another part of it that we found so very interesting was how organizations make decisions. I'm not talking about the obvious differences between the bureaucracy of large organizations versus the lack thereof in smaller ones. This is something much more subtle; almost like the big (leveraged) organizations were so close to the edge that any decisions -- good or bad -- were not being made. Not unlike the avalanche survivor that can see a pinhole of sunshine as they're buried under the snow, yet so afraid to make a move toward it for survival in fear of the rest of what's around them caving in and taking their life.

And, so, we scratched our heads throughout the last quarter of 2009. Never in the nearly 20-year history of PA & Associates did we have a year in which we spoke with more prospects and issue more service agreements for review. Never, or at least as far back as my now 44-year old memory will allow, can I remember a time when CFOs and others considering our services were more enthusiastic about our approach, our references and our results. Yet, many of these same organizations never figured out how to push past whatever was holding them back; likely the fear of making any decision...good or bad. The paralysis had taken hold.

In my younger years I did a fair bit of surfing and windsurfing. Anyone that's spent any amount of time in the ocean with waves knows that swells come in sets; increasing in size and strength. Good surfers understand where to be at all times. This not only allows for them to catch the best waves, but also provides safety. As waves increase in size and power, they can also break further from shore. This requires paddling TOWARD a wave...and not away from it. Counterintuitive, until you've been caught in the impact zone and you get pounded. That's a feeling you never forget and are not keen on reliving soon.

A long way around to get you back to the point...2009 (and 2010 -- a New Year's celebration doesn't mean this is over) saw some organizations paddling to stay out of the impact zone. It expended energy, but their still alive to catch the next great wave. Others were paralyzed -- caught like a deer in the headlights as the monster waves mounted one after another and pounded them.These were the organizations that needed to paddle the hardest and many of them had the resources to do so. They froze in fear. Shaking their head from the last beating and coming up in the white water, they're big enough to weather another set. They're also over-analytical and fearful of making any decision, good or bad. The sets don't seem to be letting up any time soon. I wonder how many will paddle toward the waves and how many will wash up on the shore licking their wounds from the safety of the beach.

As always, your comments are welcome.