Buying a Fedex Ground Route

[dmac1]

Fedex has already sealed the contractors' fates. Cut costs or go out of business. Once ISP is fully in place nationwide, fedex will begin aggressively cutting reimbursement, either through direct cuts, or hidden cuts(like bonuses), a just refusing to keep up with inflation.

The inability to tell other contractors about your reimbursement leaves every contractor vulnerable. Fedex will be looking at other possible contractors well before your contract expires. Fedex will simply non-renew, and hire all your drivers on a temp basis until they can later divvy up the routes, or find someone who will do it for less if you don't fall in line. Fedex will probably even be able to pay your drivers more for a short time, meaning that they will stay with them. Fedex has no fear about losing contractors, you are just a low level manager to them.

The ISP system gives more control- 5 times as much- over drivers with the ability to cut costs on 5 times the number of drivers with one contract 'negotiation.' Contractors are saving fedex from an entire personnel dept, anything to do with HR. The bigger the contractor, the more leverage they have.

 

[bacha29]

Fedex has already sealed the contractors' fates. Cut costs or go out of business. Once ISP is fully in place nationwide, fedex will begin aggressively cutting reimbursement, either through direct cuts, or hidden cuts(like bonuses), a just refusing to keep up with inflation.

The inability to tell other contractors about your reimbursement leaves every contractor vulnerable. Fedex will be looking at other possible contractors well before your contract expires. Fedex will simply non-renew, and hire all your drivers on a temp basis until they can later divvy up the routes, or find someone who will do it for less if you don't fall in line. Fedex will probably even be able to pay your drivers more for a short time, meaning that they will stay with them. Fedex has no fear about losing contractors, you are just a low level manager to them.

The ISP system gives more control- 5 times as much- over drivers with the ability to cut costs on 5 times the number of drivers with one contract 'negotiation.' Contractors are saving fedex from an entire personnel dept, anything to do with HR. The bigger the contractor, the more leverage they have.

No question about it. Single route contractors were the mutli routes best friends. Didn't have much money tied up in it and as a result they could walk away much easier and they didn't have to take much off the company. They're or will soon be all gone and the ones who remain will see their margins cut dramatically .The model had nothing to do with creating equity for contractors and that is why in the eyes of the company the contractor was making too much money creating too much equity so it set out to make amends.

 

[Exec32]

This is what happens when you rely almost completely on FedEx for all your revenue. You must diversify. I have looked into car transport, local advertising (on truck) amazon, postal contracting. I am attempting to breaky reliance on FedEx. I will keep you informed on my progress.

 

[dmac1]

This is what happens when you rely almost completely on FedEx for all your revenue. You must diversify. I have looked into car transport, local advertising (on truck) amazon, postal contracting. I am attempting to breaky reliance on FedEx. I will keep you informed on my progress.

If you can use the same vehicles, it would be great. I know that newspapers still use trucks in the early mornings to deliver bundles of newspapers during what would be your off hours. Having a few extra drivers available because of the different shifts would help. I remember making about $20 an hour years ago just doing that, and I later had weekend routes delivering to Avon dealers and Amway dealers. Full loads, same routes and paid better than Fedex. I netted more per day and less maintenance compared to the high mileage Fedex routes I had. Once you contract with them, they don't care at all who drives for you. Buy a couple magnetic blank decals for your truck.

 

[bacha29]

If you can use the same vehicles, it would be great. I know that newspapers still use trucks in the early mornings to deliver bundles of newspapers during what would be your off hours. Having a few extra drivers available because of the different shifts would help. I remember making about $20 an hour years ago just doing that, and I later had weekend routes delivering to Avon dealers and Amway dealers. Full loads, same routes and paid better than Fedex. I netted more per day and less maintenance compared to the high mileage Fedex routes I had. Once you contract with them, they don't care at all who drives for you. Buy a couple magnetic blank decals for your truck.

If you can use the same vehicles, it would be great. I know that newspapers still use trucks in the early mornings to deliver bundles of newspapers during what would be your off hours. Having a few extra drivers available because of the different shifts would help. I remember making about $20 an hour years ago just doing that, and I later had weekend routes delivering to Avon dealers and Amway dealers. Full loads, same routes and paid better than Fedex. I netted more per day and less maintenance compared to the high mileage Fedex routes I had. Once you contract with them, they don't care at all who drives for you. Buy a couple magnetic blank decals for your truck.

Eventually it will indeed be up to contractors themselves to break that stranglehold and hopefully it will compel X to do the same.

 

[dvalleyjim]

Under current ISP CSP what ever the lawyer phrase is now, 70% of pay is based on incentives that can be taken away a X's discretion and only 30% for operations, that is delivering and picking up packages. Plus renegotiation's every year. Screw that!

 

[bacha29]

Under current ISP CSP what ever the lawyer phrase is now, 70% of pay is based on incentives that can be taken away a X's discretion and only 30% for operations, that is delivering and picking up packages. Plus renegotiation's every year. Screw that! Quote: You bet man! Your employees won't care what happened to the incentives they still expect to be paid every week. Try basing 70% of their pay on incentives and see what happens. Try explaining to a prospective new hire that his pay will be 70% incentive based. He will be gone so fast that the door will be flapping in the breeze.

 

[bbsam]

Under current ISP CSP what ever the lawyer phrase is now, 70% of pay is based on incentives that can be taken away a X's discretion and only 30% for operations, that is delivering and picking up packages. Plus renegotiation's every year. Screw that!

i just began a contract. Don't know where you get your numbers but mine is roughly 8 to 10% incentive based and a three year contract.

 

[Exec32]

Did you get what you wanted on your variable rates, stop pay, package $, fuel, etc ,.

 

[bbsam]

Did you get what you wanted on your variable rates, stop pay, package $, fuel, etc ,.

Absolutely not. It is Fedex, afterall.

Also, the 8 to 10% naturally reduces with growth. Bacha mentiined the X intends to have 51% of the market by 2020. Factoring that drops the incentive money considerably over time.

 

[bacha29]

Believe me guys I take no pleasure in hearing this. I think the only real option is to give them what they demand but not one thing more. Just the minimum. I know the hope was that you would be able to sell your operations and be set for life but unfortunately that wasn't what X had it mind.You were to simply be a pathway to cheap labor and cheap trucking. That has always been their intent.

 

[Exec32]

I couldn't agree more. There is one thing I have found out there is a sucker that's ready to buy almost anywhere, and FedEx knows it.
Know your contract, only do what is contractually required, give the absolute minimum as it pertains to service. We do not take out code 999, we do not take out a damaged package, if it is 1lb over or 1 inch to large to bad, only one attempt per day, wrong address don't take em. I don't take pride in that approach, however they have given me no other choice.
The biggest problem are those cheese #ick contractors in my terminal continuously #$cking us over, including themselves, Freddy luvesssss them.

 

[Exec32]

I would like to completely do away with any incentive or bonus money in the contract. Pay for the delivery, not anything else.
Most contractors think I'm insane when I mention this. I also told the TM that I would provide my own customer support and QA, and I would invoice them,,,that went well.

 

[bacha29]

I couldn't agree more. There is one thing I have found out there is a sucker that's ready to buy almost anywhere, and FedEx knows it.
Know your contract, only do what is contractually required, give the absolute minimum as it pertains to service. We do not take out code 999, we do not take out a damaged package, if it is 1lb over or 1 inch to large to bad, only one attempt per day, wrong address don't take em. I don't take pride in that approach, however they have given me no other choice.
The biggest problem are those cheese #ick contractors in my terminal continuously #$cking us over, including themselves, Freddy luvesssss them.

Right on man. we had 3or 4 company ball s^(!er's who thought they were on the fast track to the big time only to find out that they had wrongly assumed that the cheap labor which would be the deciding factor in their success would come running earning for the opportunity to work for nothing. We 3 Day 1 contractors who stayed single route until the end just sat back and smiled because we knew what was coming. They're all gone now and the multi routes who remain have inquired as to whether or not all of the new leg parts will be installed in time to enable me to help them later this year. I love what you said about the contract. It is an economic mine field as evidenced by the contractor relations manager who took me aside and tole me privately that x does not consider any part of it binding upon itself. Once again it all comes down to what our first TM told me in a private conversation more than 20 years ago. " I admit it. it's a rotten deal, the worst I've ever seen in all the years I've been in this business,but you signed it. Now I'll tell you how you can survive. Keep borrowed money to a minimum and limit your exposure to risk and to variable costs to only that which you cannot avoid" . Wise words indeed.

 

[Exec32]

Right on man. we had 3or 4 company ball s^(!er's who thought they were on the fast track to the big time only to find out that they had wrongly assumed that the cheap labor which would be the deciding factor in their success would come running earning for the opportunity to work for nothing. We 3 Day 1 contractors who stayed single route until the end just sat back and smiled because we knew what was coming. They're all gone now and the multi routes who remain have inquired as to whether or not all of the new leg parts will be installed in time to enable me to help them later this year. I love what you said about the contract. It is an economic mine field as evidenced by the contractor relations manager who took me aside and tole me privately that x does not consider any part of it binding upon itself. Once again it all comes down to what our first TM told me in a private conversation more than 20 years ago. " I admit it. it's a rotten deal, the worst I've ever seen in all the years I've been in this business,but you signed it. Now I'll tell you how you can survive. Keep borrowed money to a minimum and limit your exposure to risk and to variable costs to only that which you cannot avoid" . Wise words indeed.

I will not over leverage, no borrowed money. It's the only way to keep what little leverage I have, and that is the ability to easily walk away. Sad way to survive but the alternative of being beholden to the devil is unacceptable. Contractors that believe having a 70000$ truck payment to reduce maintenance cost are only fooling themselves. It is only a bad business decision, welcome to the trap!

 

[bacha29]

I will not over leverage, no borrowed money. It's the only way to keep what little leverage I have, and that is the ability to easily walk away. Sad way to survive but the alternative of being beholden to the devil is unacceptable. Contractors that believe having a 70000$ truck payment to reduce maintenance cost are only fooling themselves. It is only a bad business decision, welcome to the trap!

You got it man. One of the old Smith Driving Rules they endlessly pounded into our heads also applies in the economic situation as well......" Leave yourself an out" As long as your can keep your vehicles road worthy who cares what they look because old or new drivers especially those on per diems or piece work will beat the living s#%t out of them in order to get done ASAP. Can't tell you how happy I am that you spotted the trappings in time. X corporate will continue to be overly dependent on Ground for money to fund it's aggressive new endeavors and contractors will bear the brunt of it because getting it out of contractor margins is an easy place to get it.

 

[Code 82 Approved]

You paint an ugly picture.
I'm not dumb and I have my hands in various things in my terminal besides being a driver manager. I study FDXG internal workings as they relate to my job and contractors. I have the option to buy out my Guy at a fair price when he's ready to say goodbye. We are not ISP, and likely will not be until the main case is done. After a decade in this, I may choose to pass on owning it, I have seen enough of the sin to know better than to jump in bed with it. Luckily I landed the absolutely best job in my building and it's tossing heads and raising former co-workers pay so they don't jump ship.

 

[STFXG]

We are not ISP, and likely will not be until the main case is done.

Huh? You know the dates have been announced for all remaining states, right? We've been pushed back 6 months since the original announcement, but every district is scheduled. If you don't know when, you can PM me your district and I'll let you know it's ISP date.

 

[MrFedEx]

If you can use the same vehicles, it would be great. I know that newspapers still use trucks in the early mornings to deliver bundles of newspapers during what would be your off hours. Having a few extra drivers available because of the different shifts would help. I remember making about $20 an hour years ago just doing that, and I later had weekend routes delivering to Avon dealers and Amway dealers. Full loads, same routes and paid better than Fedex. I netted more per day and less maintenance compared to the high mileage Fedex routes I had. Once you contract with them, they don't care at all who drives for you. Buy a couple magnetic blank decals for your truck.

I see Ground vehicles at swap meets, and doing other work, and most of the time, the logos are still there. Even if someone makes a half-hearted attempt to blank them out, it's pretty easy to tell it's Ground.

I, and others here, have been saying for years that contractors would eventually realize they are dealing with the devil in Mr. Smith. He will continue to squeeze every ounce of profit he can out of this scam while allowing you just enough to remain in business. Safety? He doesn't care. Your success as an "independent businessman"? He really doesn't care there either, because if you fail, it's all on you, and he'll find some sucker (through you) to buy the business, probably some investor type who knows nothing about the delivery business and things like vehicle MX costs, insurance etc. and other overhead factors that Fred has dumped in your lap.

The essence of the scam is that Fred passes off the costs to you and then takes an exorbitant share of the profits.

 

[Cactus]

I see Ground vehicles at swap meets, and doing other work, and most of the time, the logos are still there. Even if someone makes a half-hearted attempt to blank them out, it's pretty easy to tell it's
Ground