FedEx Overcharged Customers for Years, Sealed E-Mail Says
bloomberg.com
bloomberg.com
Look at it this way, if they are overcharging for delivery but are still getting business then they are charging appropriately for their market.
An officer of the company knowing about the issue and not doing anything about it would generally be the nail in the coffin.
Combining weight, maximum size, distance, overseas or not, time, reliability and customer service gives carriers plenty of room to confuse customers.
Ironically, the two private carriers depend on the sole public carrier (USPS) for deliveries to rural/remote locations (which USPS is required to serve), so this market isn't quite as "competitive" as it looks.
FedEx could be prohibiting whole business models that are waiting to be profitable with cheaper shipping.
Yes, I know it's speculation, but what we often forget here is that capitalism is a deal of state-based enforcement of your property rights so that you create value for society. If your company, like Comcast, is systematically overcharging / under-delivering, you're not holding up your end of the deal - so the state might just step in to ::realign your interests::
Are you saying that the protection of one's property rights is contingent upon the delivery of some arbitrary metric of "value" to "society"? That doesn't sound quite right.
Are you saying that property rights are not contingent on a metric of value to society? If it weren't better for society as a whole to provide protections for property rights, do you think they'd exist?
No it isn't. Capitalism is a "system" of capital investment (usually with the expected gains of personal profitability), contingent upon the property rights of the ownership of capital and transferable (partial) ownership of an enterprise that consumes that capital.
Capitalism is contingent on property rights being recognized and defended against arbitrary taking, but property rights are not contingent upon the owner of property contributing to society in some arbitrarily (im?)measurable way.
This is not to state that the protection of property rights is not a net social boon, just that property rights do not evaporate (in whole or in part) in specific instances once someone calculates the "social value" for an owned enterprise has dropped below some immeasurable threshold.
Governments operating under a system of justice attempt to regulate the systems and boundaries of social exchange (to minimize and resolve apparent conflicts), but do not require any party to engage in such exchange to the benefit of anyone, or the mutual benefit of society.
>property rights do not evaporate...
It's called the Sherman Act in the US, and it's why Microsoft was told what to do with their property - similar to MSFTs forced debundling in Europe. It's the state saying "You're outside of the deal, make these changes (to your property) to increase competition, which we know will costing you lots of money (i.e. property)".
There are many other laws that regulate anti-competitive behavior, eminent domain, patent violation in times of war, etc. that are all pro-social but sacrifice property rights.
Rights don't come from the state, they are a consequence of individuals needing to be able to act upon long range plans while interacting with others, and to be assured that values they have acquired will still be at their disposal in the future. One only needs rights to things one plans to use when other potential users may contend for it. Relying on a social order that defends rights is in one's best long-range interests.
Laws that define and penalize "anti-competitive" behavior are orthogonal to capitalism, in that capitalism isn't about competition, it is about investment and return. From a legal standpoint (principles of justice notwithstanding), the remedy for anti-trust behavior is rationalized not as a complete termination of property rights (destruction or redistribution), but commands to take or cease action (interference) to compensate "injured parties", or forced reorganization to hinder the offending activity from recurring. Nominally the property still exists with its owner(s), although it has become encumbered or splintered into multiple properties.
The ability for a government to own and acquire real estate puts it at odds with (perhaps) its chief purpose, defense of the property of the citizens, especially when it gives itself the coercive power to grab when all else fails.
Suspension of rights in times of war is why we are warned about the rise of the total state under conditions of total war. The "war on terror" is the current excuse for the non-defense of many rights, not just property.
Although a formal system of conventions for property rights is certainly contingent on general social acceptance, it's clear that any formalized notion of "society" is itself contingent upon the very same thing: individual human beings require exclusive control over well-defined amounts of matter and space in order to live, and human beings will therefore not generally form relationships that deny them the right to do so.
In this sense, formal enforcement of property rights isn't so much about protecting property as it is about indeminfiying human beings against the risk to their property which might otherwise prevent them from forming relationships with others who are, at the moment, strangers, and therefore to allow society itself to evolve more complex and useful forms. In other words, without formal recognition of property rights, property would still exist, but "society" might not.
All of this means that the protections for property rights afforded by formal institutions are not contingent on individuals delivering some arbitrary metric of value to society (a poor construction of the concept, noting that society isn't something distinct from actual human beings, so there's no "to" or "from" involved), but is rather necessitated by those individuals' mere existence within society.
However, corporations, bankruptcy, patents, etc. are all not state-of-nature constructs being reinforced formally. They are state innovations to encourage positive growth - do you deny this?
To your closing point, it sounds like you're saying that "business models don't have to be approved by the government based on this metric", however this would deny that the myriad taxes, laws, etc. make money itself the imprecise metric by which we judge this social value.
In an impossible situation, money would account for all positive and negative externalities, and getting rich would really mean that you truly helped society a great deal - unlike today where it could just mean that you played the system, etc.
Thoughts?
To some extent. I'd certainly regard bankruptcy and patents as creatures of positive law, but these legal tools aren't property rights: patents are grants of monopoly over mere concepts - to the extent of allowing the confiscation of the physical property of third parties simply because they used it to implement an idea similar to yours - and bankruptcy is effectively a license for people to renege on their promises and nullify the property rights of their creditors. Whether or not these are beneficial or useful policies is a separate question, but its clear that they contradict rather than protect property.
Corporations, on the other hand, most certainly are natural constructs - people engaging in organized collaboration is a viable definition of society itself - and they certainly would exist with or without recognition in positive law, given any context in which property rights were indeed protected in a consistent and stable manner.
> To your closing point, it sounds like you're saying that "business models don't have to be approved by the government based on this metric", however this would deny that the myriad taxes, laws, etc. make money itself the imprecise metric by which we judge this social value.
Well, my entire comment was an elaboration of a single point: that property rights aren't contingent on the state's approval, but rather that the state's existence - as a state and not a mere cipher for the strongest inhabitants of what remains a raw state of nature - is contingent upon its protection of property rights.
But we don't get to judge the 'social value' of people's activities as individuals, reducing things to simple rationalizations evaluated against subjective criteria. Money isn't an "imprecise metric by which we judge this social value", it's just an inert token used as a convenience to facilitate exchange, and the those taxes, laws, etc. aren't there to approve or disapprove of anyone's business model, but are rather (ostensibly) there to ensure that no one's rights are being violated within the undertaking of that business.
Society itself - people in aggregate - judges the value of an endeavor by supplying that endeavor with the very rewards that you'd make subject to the approval of only an excessively formalized subset of that society. If the state intervenes to defend people against deceit or violence as they engage in commerce, then it's fulfilling its mission; if it intervenes to make that commerce itself contingent upon the whims of third parties, then it's subverting its mission.
> In an impossible situation, money would account for all positive and negative externalities
But your statement wasn't that there ought to be some means for assigning responsibility for negative externalities to those who created them; your statement implied that you believe that people ought to be obligated to produce positive macro-level externalites, else forfeit protection of their rights. Without intending any personal insult, I'd regard the latter as an unconscionable position.
> unlike today where it could just mean that you played the system, etc.
The same holds true of acquiring political power, and regardless of the institutional models and logical constructs we employ, society remains composed of the same set of people; so if you acknowledge the existence of malintent out in the world, how can you advocate admitting subjective discretion in the protection of rights?
- You believe that rights exist outside the state (i.e. there are property rights without a state), and I think they only meaningfully exist within a state, however primitive (tribal chief + social norms, etc.).
- You believe that natural law (however divined) is a fully correct basis for statutory law, whereas I see statutory as something that should reference a natural human tendency, but not be beholden to it.
Am I understanding your view correctly? If so, we can go point by point, but until then we're arguing over the falling action and not the premise.
Whilst I understand that Comcast is a really easy target for customer service complaints, I pay for a 27mbps / 7mbps service.
Per my speed tests (not speedtest.net), I get upwards of 40mbps down, 15mbps up on sustained transfers. And service is excellent, on the few occasions I've needed it.
It's not "FedEx's prices were too high".
It's "FedEx told me it costs $x.xx to mail a package and I was charged $x.xx + $y.yy".
Define "didn't say anything". Did you notice there was a problem, but didn't say anything Or did you not notice until later?
The reality is that the person sending the package is not the person who brokers the relationship with FedEx - they're paid mailroom wages (10-15 an hour).
However, frequently, these couriers charge a base rate and then tack on a residential "surcharge" at a later time. Most shipments aren't paid for at the counter. You get a weekly bill. If you ship more than a few packages a week, it's very difficult to tell which surcharge is attached to which shipment. All they give you is a tracking number and unless you spend all day memorizing their tracking numbers, you won't know which end is up.
Also, are you going to spend 15 minutes on the phone every time you get dinged for two bucks unfairly? No thanks.
At this point, it's not so much ripping off ... everybody knows it's happening. Just a hidden cost of shipping.
If you check this and you notice a $0.50 surcharge... Are you going to spend 10min to fix it, if it is fixed ("please call later when our accountant is in")?
The rates are confusingly specified, you can't get a per package breakdown and you don't get invoiced until weeks later.
Because of all that it's actually very hard to say if you are getting the rates you agreed to. At best you can try to estimate what it is going to cost you.
Thankfully in our case our estimates were actually higher than what we eventually paid, but I can see how it would be very difficult to know if you were over charged.
More like: I ask you how much a candy bar is, You say $2, I give you a ten and you "forget" to give me change.
Can I sue you later? You bet your sweet bippy!
The tone of the article indicates that I'm supposed to be angry about this, but I'm just not feeling it today. Sorry.
Here you go, from http://www.fedex.com/us/service-guide/terms/express-ground/i...:
"Rates and service quotations by our employees and agents are estimates and will be based upon information provided by you, but final rates and service charges may vary from the quotes based upon the characteristics of the shipment actually tendered to us. Any conflict or inconsistency between the FedEx Service Guide and other written or oral statements or quotes (except those found in a FedEx Sales or FedEx Express Customer Automation agreement) concerning the rates, features of service, and terms and conditions applicable to FedEx Express service will be controlled by the FedEx Service Guide, as modified, amended, changed or supplemented. "
Note: Rate differences are controlled by the service guide.
If the service guide says there should be no residential delivery charge, and they are adding one, that's a problem.
They also only reserve the right to charge the residential surcharge on certain places:
"We reserve the right to assess a Residential Delivery surcharge on any shipment delivered to a home or private residence, including locations where a business is operated from a home, or on any shipment in which the shipper has designated the delivery address as a residence, including shipments where the delivery location has been designated as Residential Delivery in error. "
The last part is what part of their defense will almost certainly be. As this email shows, however, they've apparently deliberately designated a large number of shipment delivery locations as residential delivery, meaning it was not "in error", but intentional.
Ignoring all of this, they are also usually forming binding rate contracts with businesses and governments (IE you agree to ship this many packages a year, we agree to charge you the rates in this service guide with 80% discount). Throw on top of that that deliberately overcharging the government is serious business in the US. It's often criminal, and IIRC, even in the civil side, you can keep a percentage of the money you recover by suing on their behalf.
More likely: they have a database or some other kind of service that maps addresses onto “residential” or “not residential”, and either they put off upgrading the database or have some flakiness in their code, so that a lot of addresses get incorrectly marked “residential”, and, well, when you’re prioritizing which bugs you need to fix, the bugs that make your company more money than it deserves usually don’t end up at the top of the list.
Systematically overcharging customers strikes me as a valid tort.
I sincerely doubt this is true.
There's probably significant economies of scale when delivering to commercial properties where the drivers can drop off multiple deliveries at once as opposed to home deliveries which would usually get a single package per stop.
Id think that the drivers that deliver to offices can drop 5-10x as many deliveries in a day compared to the residential drivers
Come on Bloomberg, don't talk to me like I'm five.
The "mistakes" are frequent, and they error on the financial side of the freight company approximately 95% of the time.
They will pay some money to make the lawyers rich, no one goes to jail and FedEx will repeat it again after a few years. Rinse, repeat. Cost of doing business.
I am cynic because many big corps still have this attitude. See http://www.bbc.co.uk/news/business-18866018 and http://www.latimes.com/business/money/la-fi-mo-hsbc-confirms...