OFFER FEDEXERS CAN'T REFUSE

     The stunning news that FedEx is dumping 14,000 or roughly 12% of its domestic workforce to save $150 to $190 million annually, also ends forever the notion of the infallibility of the Memphis-based Wunderkind Company which, 30 years ago following the demise of REA Air Express, went into business and set air cargo on its ear.
     Truth be told, FedEx has been dealing with declin- ing revenue since before the Sept. 11, 2001, terrorist attacks. Although its fortunes are increasing elsewhere, FedEx has been stuck in negative to flat growth for its high yield, domestic overnight business while ri- val UPS saw its percentages jump nearly four percent during its most recent quarter.
     Little wonder that FedEx is screaming bloody mur- der at the prospect of DHL buying Airborne Express, which would put DHL as major competition for the company (see “Fed/Ups at Throat of DHL,” elsewhere here). Loss of any more market share is the last thing FedEx needs right now.
     Despite the continued efforts of company founder Fred Smith and others at FedEx to portray a “family” atmosphere, that reached its high watermark in the popular Tom Hanks movie “Castaway”, 116,000 U.S. employees of the firm here in America face heavy choices, some to be bought out of their jobs this year, while those remaining must choose between two pension alternatives.
     FedEx moves are signs of a maturing company with a large bureaucracy.
     Some industry observers credit the Memphis giant with rewarding employees by offering choices. Others note that the message to the entire FedEx workforce that “it is expendable,” ends once and for all, “a special relationship between the company and its people.”
     “Now FedEx is just like any other big cut and slash for profit company,” the source said.
     Salaried employees who have five years of credited service and are at least 50 years old qualify for the voluntary retirement benefits and have until September 30 to decide that option.
     The voluntary severance plan is available to all salaried, domestic FedEx Express employees regardless of age or tenure. Eligible workers have until November 24 to decide.
     U.S. shipments accounted for 88 percent of FedEx average daily volume during the third quarter ended Feb. 28. Meantime recent numbers show UPS cutting further into FedEx next-day air volume. UPS numbers rose nearly 4% percent in the first quarter of the year.

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SHOCK AND AWE

     Sony registered “Shock and Awe,” the words that USA spin-meisters used to describe operations at the beginning of the war in Iraq.
     Sony presumably wants to create a video game, but with resentment and disapproval over the war still high in Europe and elsewhere, Sony is pondering whether to have “Shock and Awe,” the game, take place at some fictious location.
     Meantime others are jumping on the war wagon printing T-shirts, caps, picture books and all manner of war-related memorabilia.
     Land’s End, a catalogue merchant that Sears Roebuck bought for a billion dollars last year, has even put out an entire issue of shirts and other items, like swimwear and bath towels, that you can purchase with U.S. flags embroidered upon each garment.
     Plus, if you buy enough, Land’s End will even throw in free FedEx.
     As a publication and website we have displayed the USA flag for more than ten years because we are proud to be American, period.
     But as a Vietnam veteran, I can tell you that war is no good.
     Support for the War in Iraq was driven in part by nostalgia amongst some Americans, for a world that has gone missing since the fall of the Soviet Empire 13 years ago.
     There was a sort of comfort and predictability amongst Americans living on a planet kept “in balance” between two super-powers.
     The fact is that for better than 62 years since 1941, America has struggeled in one way or another against clearly defined opposing world powers, first the European Fascists and Asian Imperialists, and later for almost 45 years, the Soviets.
     Today with a huge military/industrial complex, the U.S. since that horrible day, September 11, 2001, has lashed out against perceived world terrorist enclaves, first in Afghanistan, an later in Iraq, with (so far) support from a usually less than militaristic American population.
     How long the Bush Administration will have a pass, as it dictates to the American people: “Keep quiet”and that “dissent or protest is un- American, spend your money to support the economy and visit Disneyworld,” is yet to be determined.
     However another U.S. media phrase, “Weapons of Mass Destruction” is showing some signs of just how powerful an impact, well-placed words can have when facts make them come up empty.
     One thing for certain, owing to the current atmosphere in America, “Shock and Awe,” the game, and all the rest, could be a huge economic force for air cargo, in case you are wondering what will drive future business . . .

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REBUILDING TRADE

     Despite the U.S. House of Representatives changing the name of its fried potatoes in Capitol Hill dining rooms from “French” to “Freedom,” the U.S. and Europe conduct about one billion dollars a day in business.
     The bigger question right now, is whether acrimony caused by so many nations against America’s war adventure in Iraq, will seriously hamper the continuing European and U.S.’ (and other nations as well) initiative toward open markets and the further development of global trade?"
     We are thinking about world trade, now that war is over.
     It feels like a good time for everybody to get a bit cheerier toward each other, while getting on with the business of doing business.
     In 2001, at Doha there was this agreement put into place by the big trading nations, to establish an agriculture agenda by the close of April 2003, which has not happened.
     If there is one area of air cargo that is doing business right now, it’s the consignments connected to agriculture, especially in the cool-chain.
     There is no question that the air cargo business has slowed down considerably in 2003.
     The hope is, that global trade will once again get juiced, as it was during the 1990s, although sadly double digit expansion experienced during most of that decade was on the wane even before 9/11.
     If markets that have fought so valiantly to open up, cannot operate, the global economy, which needs the stimulation of new trade for growth, will falter.
     In the airline business, travel has dipped alarmingly as world trade has slowed.
     The trend is not good.
     As an industry in the business of moving high yield shipments, air cargo must pay attention to what world markets are up to.
     This is especially true as shipping patterns change and competition increases for every consignment.
     It ’s simply not enough to complain about the other guy’s lower rates.
     The demand and challenge these days, especially for the part of air cargo that moves international passengers and freight in combination, is to pay attention to what is going on in the markets being served.
     In the big picture, The World Trade Organization (WTO) is a group that we all need to know better.
     No, we are not advocating falling into lock step with WTO edicts, nor are we endorsing letting the lunatic fringe demonstrators that WTO seems to attract at its every meeting, shade the broader understanding of this group.
     What it is about WTO, is that for the first time, nations have a cover organization for development of multi-lateral trade.
     The disturbing thing about “freedom fries” is that a return to unilateral trade agreements works against further development in the broader global trade sector.
     Like those “fries,” two trade agreements the U.S. ratified, one with Singapore and the other with Chile, send the signal that this country is willing to hold out deals to countries that back our war efforts.
     Chile, which was thought to be in line for the first acceptance of the arrangement was shunted aside, as Singapore was feted in Washington the first week of May at an elegant White House affair.
     Chile had opposed the war in Iraq, while Singapore had supported the U.S. effort.
     What signal the Bush Administration sent to Latin America, where NAFTA and other accords are supposed to lift this entire hemisphere, is anyone’s guess.
     All we know is, that Chile ships a lot of air cargo and LanChile, the airline, is one hell of a fine operation, sure to be impacted or offended or both, by this politically-driven ‘slap in the face’ delay.
     The international economy is too important to be held hostage to political differences.
     Right is right, period.
     If a country dumps goods, or operates trade arrangements in a protectionist or under the table manner, that is what should count in global trade, not whether it backs or does not back another country’s foreign policy, in this case the recent U.S. incursion in Iraq.
     Now, as other nation’s airlines are moving away from government control, U.S. carriers, in deep peril and on survival mode, are accepting government monies to stay afloat.
     But on balance, airlines and their air cargo partners, involved in the selling, shipping, warehousing and the total logistics of transportation need to be independent, better informed and more involved in promoting the idea of global trade.
     Instead of waiting for air cargo-able commodities to come up and bite us on the fanny, we need to recognize trends, and we need above all to work together as an industry to make it clear to government that the policy of mixing political and trade issues needs to be replaced immediately with a multilateral move toward the center.
     Maybe what the world needs right now is one big collective hug, with everybody just taking a deep breath, calling a time out and appreciating each other a little bit for a while.
     Everybody knows that those feelings will not last forever, or maybe at all.
     But we think, even considering doing something different, rather than sitting and worrying, might bring a change for the better.
     When you think about it, starting at 9/11, we are so far away from where we want to be.
     How it couldn’t hurt to try something different?
     The Air cargo industry should demand that our organizations and voices be raised to promote what is good about globalization of trade.
     New combinations bring new possibilities for air cargo.
     No voice in these matters gets us what we deserve . . . . Nothing.