FedEx Woes Continue

Boost_Crazy said:

Would they??  How much income do shippers lose by slow delivery?   How much by lost or damaged  packages?     
 

Yes, they would go out of business. Labor is already the highest cost of most businesses, and I'd wager no business in a competitive environment would survive doubling their labor costs. Who in their right mind would ship FedEx if their cost was much higher than their competition? They don't care about slow deliveries. They don't care about damaged packages. They rarely pay a dime for damaged goods, and when they do, it's pennies on the dollar. Shipping is an odd service as the party requiring the service- the recipient- rarely contracts with the freight company. The shipper contracts with the freight company. Most product is shipped FOB point of origin, it's the recipient's problem if it's lost or broken. So why would a freight company double it's labor costs? They already have more business than they can handle even with their E36 M3ty service. They would go out of business, and everyone working for them would get a change in pay all right, to $0. 
 

But let's pretend that P&L's aren't important, customers don't mind paying a lot more, and the business would survive a doubling of their labor costs. One, it would be more than double. They are messed up right now because the are short handed. To fix the problems, they need to hire. So they would not only double the pay of current employees, but also pay the higher rate for new employees. And most of them would still lose their jobs. Because most of them that are currently working would not be worth the new doubled pay rate, and they will be replaced when someone better is willing to take the job for the higher rate. It may take some time to filter them out, but it will happen eventually.

If you've read everything here you know how many people are choosing not to use FedEx if they have a choice. Now multiply that times the millions of packages shipped every hour.  That loss of business has a dollar value. Plus a PR value which might be even higher. 
  Next look at the actual costs of warehouse people. On a typical package it's what 2-3 cents?  Whatever it's nowhere are near as the cost of trucks, or fuel,  administration costs and all the other numbers that go into a package being delivered.   So instead of paying $15/hr you pay $30 /hr  now that labor costs goes up to 4-6 cents /package.  Except instead of expecting them to handle 50 pkgs/hr they do 100 pkgs/hr.  
  Net cost $0.    
 Management shouldn't keep thinking in 2 gd grade math terms. Start thinking in algorithm terms.  

AnthonyGS (Forum Supporter) said:

You can't deliver anything working from home.

If that's all you took from what I'm saying, either your reading comprehension needs work or I'm really  bad at explaining things. 

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

dculberson said:

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

According to Frenchy if you pay them more, they can do double that.

Amazingly, a package from Fedex actually arrived a day EARLY last Friday. Go figure.

It was still beat up pretty good, but it was a heavy-ass box of metal shelving. 

frenchyd said:

AnthonyGS (Forum Supporter) said:

You can't deliver anything working from home.

If that's all you took from what I'm saying, either your reading comprehension needs work or I'm really  bad at explaining things. 

So your rambling about increased productivity from jobs working from home is applicable to package handlers, how?  Maybe your explaining comprehension could use a little improving.  I remember you typing several paragraphs on how much time Dale E spent adjusting his seat on a topic entitled "how to adjust your seat" too.  It contained no info on how to adjust seats.  I will gleefully admit, my posts aren't always crystal clear.  Can you do the same? 

 Not to mention Dale E also spent a lot of time modifying his seat harnesses..... so not everything he did is a great example. 

And yes, I fail to see what working from home and Henry Ford have to do with package handling.  If you ever come to DFW, I can provide you an opportunity to explain it to the package handlers in person if you'd like. 

Yes, financial incentives can work, but at the end of the day they don't always work. 

dculberson said:

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

It's quite a sight to see.  They also have to scan each of those packages onto a truck and then load them in roughly the correct spot on the truck too.  Let's also say the quality of this effort depends on a lot of direct supervision that doesn't always work well. 

Delivery drivers make anywhere from 50-250 stops per day too (some even more during the holidays I've heard as much as 400 but that would be super rare) depending on driving time, stop density, number of packages per stop etc too.  It's a hard job, but some contractors give stop and package bonuses to encourage the better drivers.  That can also encourage short cuts which is not good.  Incentives can be a double edged sword in package delivery.  You have to balance number of stops, work hours, pay and quality all at the same time.  The remote, profit driven, investor mentality owners are pretty bad at this.  The highly involved owners can be quite a bit better.  It still requires lots of good people in key positions to pull it off.  When Fed Ex went to 7 day ops a lot of people weren't able to figure it out in a good way.  Fed Ex is also combining Home and Ground delivery and signed a huge contract with USPS which created more problems to be solved.  And then the world tried to have everything delivered at home so no one ever left their house.  It's a crap business right now, but there is money to be made if you can figure it out. 

In reply to frenchyd :

If you've read everything here you know how many people are choosing not to use FedEx if they have a choice. Now multiply that times the millions of packages shipped every hour.  That loss of business has a dollar value. Plus a PR value which might be even higher. 
  Next look at the actual costs of warehouse people. On a typical package it's what 2-3 cents?  Whatever it's nowhere are near as the cost of trucks, or fuel,  administration costs and all the other numbers that go into a package being delivered.   So instead of paying $15/hr you pay $30 /hr  now that labor costs goes up to 4-6 cents /package.  Except instead of expecting them to handle 50 pkgs/hr they do 100 pkgs/hr.  
  Net cost $0.    
 Management shouldn't keep thinking in 2 gd grade math terms. Start thinking in algorithm terms.  

Frenchyd- You are missing so much of the picture,  your math has zero chance of working. You are trying to simplify a complex problem by leaving out key variables. They aren't thinking in 2nd grade math terms. It only seems like that to you because you are missing the vast majority of the problem. Let's use your labor per package example. I doesn't even matter how accurate it is, let's pretend it's spot on. You forgot a big variable. Your math above assumes the package is touched once. How many times is the average package touched? I don't know, but it's not once, you are off by orders of magnitude. Your tenure as CEO was short lived, since you forgot to multiply your raises over every time a package is touched. Numbers matter. It also matters that the actual wage is just a portion of the cost of employing someone. You forgot that too. I could go on and on, and those are just the obvious flaws in your calculations. All these numbers are important. On this scale, decimal points matter, yet you are talking about 100% increases and leaving out multiples! 

Your "simple" solution- doubling wages to increase bottom line- how many companies have implemented that policy? Zero. So either you know more about business than every company on the planet, or it's a worldwide conspiricy to keep wages low at the expense of profits. 

Every business has a sweet spot on how much labor is needed to maximize profits. This number can change by month, week, by hour. Too low or too high, you give up profits. Many professionals spend their whole lives fine tuning that balance and rarely get it right, and if they do, it doesn't last long. Yet here you are with "just double wages." Why just double? Why not triple, or quadruple? How exactly did you determine that double was the sweet spot number? 
 

Steve_Jones said:

dculberson said:

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

According to Frenchy if you pay them more, they can do double that.

Again if that's what you took from my post you failed to understand the benefits Henry Ford got by doubling the wages.

    To briefly summarize he hired only the motivated workers, who creatively improved productivity and quality.  
   Raise wages a buck or two an hour and you'll still get the same applicants.  Double the wages and the free PR gets you motivated workers. Who give you productivity gains. 

In reply to frenchyd :

As someone with actual experience in a package handling facility, no amount of money will get people to work any faster than they already do. I can take that even further and say it's more to do with the production line that Henry Ford started.

Pace in the hubs is set by the sort, then by the conveyor system, then finally by the people loading the truck. When any of them gets out of tune, it screws everything up. 

If they wanted things done faster, they'd get better machines and eliminate the human aspect. Sounds far fetched, but it shouldn't be that difficult to teach a conveyor belt to play tetris. 

I don't know current FedEx rates, but UPS is paying $20/hour for warehouse workers. 20 hours a week because they run 4 hour shifts because they expect you to be running full steam the entire time. But you also get into the teamsters union after 60 or 90 days, which for the people that last that long, a lot of them see as a break. Keep in mind also that reporting injuries affects monthly bonuses for union labourers and non union managers, so you are encouraged to work through and hide injuries, which slows people down, whether because they're injured or they're trying to avoid making their jobs even harder.

The turnover rate 10 years ago was ridiculous, I can't even imagine what it's like now. Even paying what they do for a part time job, or maybe because it's only part time paying the take home equivalent of $8/ hour 40 hours a week. The majority of the staffing is college students or people using it for a second job to supplement their income.

Think of it this way. If I'm paying you $10/hour to dig holes all day, then double it, are you going to dig twice as many holes a day? No. I'll be lucky if you still get the same amount if holes dug every day, because your incentive is to take longer. Now, if I offered a bonus for X holes dug per day, you'll dig all you can to get that bonus until you're worthless as a digger, which leaves me needing to spend more money to train your replacement.

I'm curious how much of an effect this actually has on FedEx and how much of it is analogous to companies moving their call centers overseas.  Or facebook/google/amazon not having a phone number to call or any other substantive customer support function.  Or automakers not letting you buy a Civic with a manual in any color but grey.  There exists a small group of dissatisfied customers who may be very vocal, but the vast majority of the customers just suck it up and keep coming back.  If you polled 1,000 random people off the street, how many of them would honestly say that they won't ship FedEx or they won't buy from companies that only ship FedEx?  And follow that up with what would they do if the non-FedEx option was 5% more expensive.  What about 10%?  As a society, we've decided that we're willing to sacrifice customer service and quality in order to get a less expensive product.  Most of the time that's why we're having stuff shipped to us in the first place, let's be honest.

I know, that doesn't apply to you because you always buy local and happily pay two or three times more and so on.  First of all, I don't believe you - there is always something that you'll decide that the quality or service isn't worth spending THAT much more for THIS little thing.  Secondly, even if that is true, you're a weirdo in relative terms.  And thirdly, yes, I do think the world would be better in many ways if more people were like you, but yet here we are.

Anyway, my point is simply this:  I don't think FedEx actually cares because I think the general public doesn't care so much that they'll ever do anything that will have enough of an effect to move the needle on their revenue.  And, frankly, if you're not going to generate more revenue or prevent the loss of revenue, it doesn't make sense to increase operating expense.  For the most part, we aren't their customers, the large volume shippers are.  And those contracts are won mostly on price.

I say all this while I wait on FedEx to make three deliveries to my shop this week.  One claims to be OFD today, one claims to be arriving tomorrow, and the third says that FedEx hasn't received the shipment yet, but it'll be there Friday.  These are all to a commercial address and it's always the same driver.  Some days, he'll leave the package when I'm not there.  Some days, he'll leave an "attempted delivery, no one was here" note.  And some days he'll just drive right on by and not even make an attempt even though the tracking info will report that there was an attempt.  So, it'll be interesting to see what happens this week.

frenchyd said:

Steve_Jones said:

dculberson said:

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

According to Frenchy if you pay them more, they can do double that.

Again if that's what you took from my post you failed to understand the benefits Henry Ford got by doubling the wages.

    To briefly summarize he hired only the motivated workers, who creatively improved productivity and quality.  
   Raise wages a buck or two an hour and you'll still get the same applicants.  Double the wages and the free PR gets you motivated workers. Who give you productivity gains. 

A person can only load x number of boxes per hour. Doubling the wages does not fix the physical limitations of that. Since you have a solution for FedEx, I suggest you contact them, they'll pay a fortune for a solution. 

Steve_Jones said:

frenchyd said:

Steve_Jones said:

dculberson said:

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

According to Frenchy if you pay them more, they can do double that.

Again if that's what you took from my post you failed to understand the benefits Henry Ford got by doubling the wages.

    To briefly summarize he hired only the motivated workers, who creatively improved productivity and quality.  
   Raise wages a buck or two an hour and you'll still get the same applicants.  Double the wages and the free PR gets you motivated workers. Who give you productivity gains. 

A person can only load x number of boxes per hour. Doubling the wages does not fix the physical limitations of that. Since you have a solution for FedEx, I suggest you contact them, they'll pay a fortune for a solution. 

Well, I mean, I kind of get what he's saying there:  If you have a higher wage - say $40/hr for a package handler (heh heh) - then you'll get a higher class of applicant and you can be more choosy in the hiring process. 

I don't know if that applies to FedEx's situation, though, because if they're already pushing towards the limits of human physical capability, then as long as the current wage doesn't only get you applicants that are physically damaged in some way you're not going to see that much benefit.  Now, if the problem is that you cannot get applicants at all, then I could see trying to attract more with a higher wage.  If you're at 60% staffing (making up a number) and doubling the wage gets you to 100%, does that make it worth it?  Or do you then price yourself out of business?

My USPS package showed up yesterday.  Unfortunately they broke a headlight lens.  A european one at that.  Awesome.

Boost_Crazy said:

In reply to frenchyd :

If you've read everything here you know how many people are choosing not to use FedEx if they have a choice. Now multiply that times the millions of packages shipped every hour.  That loss of business has a dollar value. Plus a PR value which might be even higher. 
  Next look at the actual costs of warehouse people. On a typical package it's what 2-3 cents?  Whatever it's nowhere are near as the cost of trucks, or fuel,  administration costs and all the other numbers that go into a package being delivered.   So instead of paying $15/hr you pay $30 /hr  now that labor costs goes up to 4-6 cents /package.  Except instead of expecting them to handle 50 pkgs/hr they do 100 pkgs/hr.  
  Net cost $0.    
 Management shouldn't keep thinking in 2 gd grade math terms. Start thinking in algorithm terms.  

Frenchyd- You are missing so much of the picture,  your math has zero chance of working. You are trying to simplify a complex problem by leaving out key variables. They aren't thinking in 2nd grade math terms. It only seems like that to you because you are missing the vast majority of the problem. Let's use your labor per package example. I doesn't even matter how accurate it is, let's pretend it's spot on. You forgot a big variable. Your math above assumes the package is touched once. How many times is the average package touched? I don't know, but it's not once, you are off by orders of magnitude. Your tenure as CEO was short lived, since you forgot to multiply your raises over every time a package is touched. Numbers matter. It also matters that the actual wage is just a portion of the cost of employing someone. You forgot that too. I could go on and on, and those are just the obvious flaws in your calculations. All these numbers are important. On this scale, decimal points matter, yet you are talking about 100% increases and leaving out multiples! 

Your "simple" solution- doubling wages to increase bottom line- how many companies have implemented that policy? Zero. So either you know more about business than every company on the planet, or it's a worldwide conspiricy to keep wages low at the expense of profits. 

Every business has a sweet spot on how much labor is needed to maximize profits. This number can change by month, week, by hour. Too low or too high, you give up profits. Many professionals spend their whole lives fine tuning that balance and rarely get it right, and if they do, it doesn't last long. Yet here you are with "just double wages." Why just double? Why not triple, or quadruple? How exactly did you determine that double was the sweet spot number? 
 

But you are using second grade math to solve a complex problem. .  OK let's assume $15/hr is the going rate.   Labor shortage rules say you raise rates to attract employees.  Big deal  so instead of making $30,000 a year he makes $32,000. Still going to attract from the same pool of workers. However if you double the wages you attract motivated workers all the way up to $60,000 a year.  Now part of that can be made up by using less managers to "motivate" workers because a higher income is really motivational. 
   In case that's too shocking, at the guy who raised everyone's wages to at least  $70,000 Conventional wisdom had him broke by the end of  the year. That was 6 years ago. 
They went through the pandemic just fine. 
       I'll try to give you an example.   Henry Ford doubled the wages.  A slightly later film shows an assembly line worker hooking a trolley to  the car moving by his station and then sitting down on it with a wrench in both hands working on the back side of the wheel.   Then unhooking it and stepping back for the next car.   The other side of the car had two men doing the same job. 
      Back in the. 1980's one of my accounts had the same problem.  They were in a smallish town and the order  filling was the stumbling block.  Not enough people willing to work for the wages paid.  I studied the problem for a bit and suggested they try EZ Go order pickers.  ( 3 wheel, narrow,  stand up, battery powered, golf carts). For  the next 3 months every order picker I could get my hands on went to them (135 total) and filling orders stopped being a stumbling block. ( I also sold them a new fleet of forklifts). 
     Problems have solutions. Management has to stop closing off their mind to possible solutions. 
    
     

In reply to frenchyd :

People already making $60k/year aren't usually in physically demanding jobs. Those that are are too invested and/or have a much higher income ceiling in their current fields.

I don't think you're understanding that A, loading and unloading trucks at hubs is part time, or B, an extremely physically demanding job. 

It would never happen, but the best employees they could get would be high school and college level sports players doing it as training. 

Scan and stack sounds easy, but it is scan, sort, stack good level walls that won't fall and can be easily wedged against the truck, keep up with the packages coming in, find extra help for anything heavy and awkward over 70lbs, clear the jams, with the only real breaks being if your truck fills, something breaks in the plant, and your 2 mandated 15 minute breaks per shift. 

There are only so many people that can handle a job like that week in and week out, and the wear and tear on the body is hard to fix. 

There are also a limited number of truckers available. Raising wages helps, but it takes time to train them, and it's hard to get through that "the world needs truckers" to generations growing up being told college is the only way to succeed.

Steve_Jones said:

frenchyd said:

Steve_Jones said:

dculberson said:

I was curious, and FedEx Ground expects package handlers to be at a 300 - 350 "load rate," which I think means boxes per hour, after their first two weeks. That's a pretty unrelenting pace.

According to Frenchy if you pay them more, they can do double that.

Again if that's what you took from my post you failed to understand the benefits Henry Ford got by doubling the wages.

    To briefly summarize he hired only the motivated workers, who creatively improved productivity and quality.  
   Raise wages a buck or two an hour and you'll still get the same applicants.  Double the wages and the free PR gets you motivated workers. Who give you productivity gains. 

A person can only load x number of boxes per hour. Doubling the wages does not fix the physical limitations of that. Since you have a solution for FedEx, I suggest you contact them, they'll pay a fortune for a solution. 

Management should be able to resolve the problem on their own. The fact they can't means too many fences are up. 

RevRico said:

In reply to frenchyd :

People already making $60k/year aren't usually in physically demanding jobs. Those that are are too invested and/or have a much higher income ceiling in their current fields.

I don't think you're understanding that A, loading and unloading trucks at hubs is part time, or B, an extremely physically demanding job. 

It would never happen, but the best employees they could get would be high school and college level sports players doing it as training. 

Scan and stack sounds easy, but it is scan, sort, stack good level walls that won't fall and can be easily wedged against the truck, keep up with the packages coming in, find extra help for anything heavy and awkward over 70lbs, clear the jams, with the only real breaks being if your truck fills, something breaks in the plant, and your 2 mandated 15 minute breaks per shift. 

There are only so many people that can handle a job like that week in and week out, and the wear and tear on the body is hard to fix. 

There are also a limited number of truckers available. Raising wages helps, but it takes time to train them, and it's hard to get through that "the world needs truckers" to generations growing up being told college is the only way to succeed.

You've hit the nail on the head why it will work.  Conventional wisdom is ••••• but conventional thinking has them boxed into a corner.   Yes,  the work of package handling is not easy.  Why should their wages be at the bottom?  You want sharp motivated men.  Not someone off the street willing to take a low paying job.  
     As for truckers. The turn over rate is too high. Are drones the answer? Would a different look at the problem be a solution?  Christmas helpers year around?  I'd work for them except The jumping in and out of the truck on a 73 year old body wouldn't work.

   That's where more than a few of the bus drivers have gone.  I'm working a 1/2 day. 6:00 am to 6:30 pm  but my year to date income isn't over $20,000 yet.  ( that's at $22.69/hr plus a $2.50 hr bonus  )  I'm a hustler.  Every charter, every sports activity, every chance to make extra income I jump on and thank them for the opportunity.  I may get home some nights after midnight and yet 6:00am the next morning I'm there. 
     With my seniority I get first shot. There are guys with less seniority who haven't made $10,000 yet.  These are people with special CDL's, back ground checks,  drug tests, annual physicals, annual drivers tests,  who put up with over 500 walking Petri dishes getting on and off their buses every day.  Discipline problems to deal with rules and restrictions to drive a man insane.  No benefits,  work as needed no pay for teachers meetings, sick day, school holidays and summer vacation. 

So all of this discussion is directed at FedEx.  From personal experience in my area, UPS is orders of magnitude better.  They are, near as I can tell, direct competitors.  So what's different?

Monday I received a RockAuto pkg pretty much on time and UNdamaged. 

And since the subject is shipping and timeliness . . . 

https://www.yahoo.com/money/usps-mail-delivery-permanently-slower-100008087.html 

In reply to NorseDave :

That's a great question.  UPS  and FedEx do differ in only one way. One is driven by service while one is motivated by profit. 
To be fair one is underwritten by the tax payer, while one is private enterprise. 
 Fed Ex cannot deliver mail as affordable as UPS does but doesn't have the advantage  UPS does regarding operating losses. 

frenchyd said:

Boost_Crazy said:

In reply to frenchyd :

If you've read everything here you know how many people are choosing not to use FedEx if they have a choice. Now multiply that times the millions of packages shipped every hour.  That loss of business has a dollar value. Plus a PR value which might be even higher. 
  Next look at the actual costs of warehouse people. On a typical package it's what 2-3 cents?  Whatever it's nowhere are near as the cost of trucks, or fuel,  administration costs and all the other numbers that go into a package being delivered.   So instead of paying $15/hr you pay $30 /hr  now that labor costs goes up to 4-6 cents /package.  Except instead of expecting them to handle 50 pkgs/hr they do 100 pkgs/hr.  
  Net cost $0.    
 Management shouldn't keep thinking in 2 gd grade math terms. Start thinking in algorithm terms.  

Frenchyd- You are missing so much of the picture,  your math has zero chance of working. You are trying to simplify a complex problem by leaving out key variables. They aren't thinking in 2nd grade math terms. It only seems like that to you because you are missing the vast majority of the problem. Let's use your labor per package example. I doesn't even matter how accurate it is, let's pretend it's spot on. You forgot a big variable. Your math above assumes the package is touched once. How many times is the average package touched? I don't know, but it's not once, you are off by orders of magnitude. Your tenure as CEO was short lived, since you forgot to multiply your raises over every time a package is touched. Numbers matter. It also matters that the actual wage is just a portion of the cost of employing someone. You forgot that too. I could go on and on, and those are just the obvious flaws in your calculations. All these numbers are important. On this scale, decimal points matter, yet you are talking about 100% increases and leaving out multiples! 

Your "simple" solution- doubling wages to increase bottom line- how many companies have implemented that policy? Zero. So either you know more about business than every company on the planet, or it's a worldwide conspiricy to keep wages low at the expense of profits. 

Every business has a sweet spot on how much labor is needed to maximize profits. This number can change by month, week, by hour. Too low or too high, you give up profits. Many professionals spend their whole lives fine tuning that balance and rarely get it right, and if they do, it doesn't last long. Yet here you are with "just double wages." Why just double? Why not triple, or quadruple? How exactly did you determine that double was the sweet spot number? 
 

But you are using second grade math to solve a complex problem. .  OK let's assume $15/hr is the going rate.   Labor shortage rules say you raise rates to attract employees.  Big deal  so instead of making $30,000 a year he makes $32,000. Still going to attract from the same pool of workers. However if you double the wages you attract motivated workers all the way up to $60,000 a year.  Now part of that can be made up by using less managers to "motivate" workers because a higher income is really motivational. 
   In case that's too shocking, at the guy who raised everyone's wages to at least  $70,000 Conventional wisdom had him broke by the end of  the year. That was 6 years ago. 
They went through the pandemic just fine. 
       I'll try to give you an example.   Henry Ford doubled the wages.  A slightly later film shows an assembly line worker hooking a trolley to  the car moving by his station and then sitting down on it with a wrench in both hands working on the back side of the wheel.   Then unhooking it and stepping back for the next car.   The other side of the car had two men doing the same job. 
      Back in the. 1980's one of my accounts had the same problem.  They were in a smallish town and the order  filling was the stumbling block.  Not enough people willing to work for the wages paid.  I studied the problem for a bit and suggested they try EZ Go order pickers.  ( 3 wheel, narrow,  stand up, battery powered, golf carts). For  the next 3 months every order picker I could get my hands on went to them (135 total) and filling orders stopped being a stumbling block. ( I also sold them a new fleet of forklifts). 
     Problems have solutions. Management has to stop closing off their mind to possible solutions. 
    
     

So even in your example, paying people more didn't solve their problem, using more mechanization is what solved the bottleneck. 

frenchyd said:

In reply to NorseDave :

That's a great question.  UPS  and FedEx do differ in only one way. One is driven by service while one is motivated by profit. 
To be fair one is underwritten by the tax payer, while one is private enterprise. 
 Fed Ex cannot deliver mail as affordable as UPS does but doesn't have the advantage  UPS does regarding operating losses. 

He said UPS, not USPS. UPS is a private business just like FedEx. One big difference I know of is UPS is a union shop. No contractors delivering or handling packages, no contractors driving trucks, all direct employees with benefits and a living wage. Don't get me wrong, I used FedEx Ground for years but now I've switched 100% to UPS. (Except for tiny packages that go USPS.)

z31maniac said:

frenchyd said:

Boost_Crazy said:

In reply to frenchyd :

If you've read everything here you know how many people are choosing not to use FedEx if they have a choice. Now multiply that times the millions of packages shipped every hour.  That loss of business has a dollar value. Plus a PR value which might be even higher. 
  Next look at the actual costs of warehouse people. On a typical package it's what 2-3 cents?  Whatever it's nowhere are near as the cost of trucks, or fuel,  administration costs and all the other numbers that go into a package being delivered.   So instead of paying $15/hr you pay $30 /hr  now that labor costs goes up to 4-6 cents /package.  Except instead of expecting them to handle 50 pkgs/hr they do 100 pkgs/hr.  
  Net cost $0.    
 Management shouldn't keep thinking in 2 gd grade math terms. Start thinking in algorithm terms.  

Frenchyd- You are missing so much of the picture,  your math has zero chance of working. You are trying to simplify a complex problem by leaving out key variables. They aren't thinking in 2nd grade math terms. It only seems like that to you because you are missing the vast majority of the problem. Let's use your labor per package example. I doesn't even matter how accurate it is, let's pretend it's spot on. You forgot a big variable. Your math above assumes the package is touched once. How many times is the average package touched? I don't know, but it's not once, you are off by orders of magnitude. Your tenure as CEO was short lived, since you forgot to multiply your raises over every time a package is touched. Numbers matter. It also matters that the actual wage is just a portion of the cost of employing someone. You forgot that too. I could go on and on, and those are just the obvious flaws in your calculations. All these numbers are important. On this scale, decimal points matter, yet you are talking about 100% increases and leaving out multiples! 

Your "simple" solution- doubling wages to increase bottom line- how many companies have implemented that policy? Zero. So either you know more about business than every company on the planet, or it's a worldwide conspiricy to keep wages low at the expense of profits. 

Every business has a sweet spot on how much labor is needed to maximize profits. This number can change by month, week, by hour. Too low or too high, you give up profits. Many professionals spend their whole lives fine tuning that balance and rarely get it right, and if they do, it doesn't last long. Yet here you are with "just double wages." Why just double? Why not triple, or quadruple? How exactly did you determine that double was the sweet spot number? 
 

But you are using second grade math to solve a complex problem. .  OK let's assume $15/hr is the going rate.   Labor shortage rules say you raise rates to attract employees.  Big deal  so instead of making $30,000 a year he makes $32,000. Still going to attract from the same pool of workers. However if you double the wages you attract motivated workers all the way up to $60,000 a year.  Now part of that can be made up by using less managers to "motivate" workers because a higher income is really motivational. 
   In case that's too shocking, at the guy who raised everyone's wages to at least  $70,000 Conventional wisdom had him broke by the end of  the year. That was 6 years ago. 
They went through the pandemic just fine. 
       I'll try to give you an example.   Henry Ford doubled the wages.  A slightly later film shows an assembly line worker hooking a trolley to  the car moving by his station and then sitting down on it with a wrench in both hands working on the back side of the wheel.   Then unhooking it and stepping back for the next car.   The other side of the car had two men doing the same job. 
      Back in the. 1980's one of my accounts had the same problem.  They were in a smallish town and the order  filling was the stumbling block.  Not enough people willing to work for the wages paid.  I studied the problem for a bit and suggested they try EZ Go order pickers.  ( 3 wheel, narrow,  stand up, battery powered, golf carts). For  the next 3 months every order picker I could get my hands on went to them (135 total) and filling orders stopped being a stumbling block. ( I also sold them a new fleet of forklifts). 
     Problems have solutions. Management has to stop closing off their mind to possible solutions. 
    
     

So even in your example, paying people more didn't solve their problem, using more mechanization is what solved the bottleneck. 

Perhaps those order pickers would solve FedEx's problem.  Toss 1000+ pounds on the deck and zoom into the trucks @9 mph. Stack away and go back for more.  
    But if it's a labor issue where they can't get people then A big wage increase is the answer.   America is about free enterprise. Not about accepting yesterday's answers.  Good motivated people rather than just a guy willing to work cheap often solves the impossible. 
     
   

We just gotta get nine women and we can have this baby done in a month!