FedEx Ground Contractors - No more?

Discussion in 'FedEx Discussions' started by racerx, Oct 12, 2005.

  1. racerx

    racerx Guest

  2. ok2bclever

    ok2bclever Guest

    That would be great, but it is more likely that fred will decide on exactly what is the minimum he has to do to keep them legally classified as independent contractors such as giving them a choice of long pants or shorts. [​IMG]
     
  3. workinstiff

    workinstiff Guest

    CEO of Fedex Ground is actually Daniel Sullivan, not Fred Smith.
     
  4. ddomino

    ddomino Guest

    From the site racerx posted below:

    "The ruling applies to those drivers who have single territories and for whom FedEx is their only customer. Those with multiple territories would remain independent contractors."

    AND

    "The company offers bonuses for good service."

    What is a multiple territory?


    How many "good service" bonuses do you think Fedex gives?

    D
     
  5. susiedriver

    susiedriver Guest

    I believe a 'multiple territory' would apply to those who own more than one route.
     
  6. ddomino

    ddomino Guest

    But they would still fall under the only customer is Fedex, it says Fedex on their trucks, they can only haul Fedex pkgs, etc...

    The only differance is the owner isn't the driver.
     
  7. susiedriver

    susiedriver Guest

    I think that the argument is that since they 'own' the routes, and have other employees, they would fit more closely into the meaning of 'contractor'. I've been known to be wrong, but I think this would apply mainly to the old 'RPS' guys that bought territories that are now multiple routes for Fedex Ground.
     
  8. wkmac

    wkmac Guest

    Susie, I think you may have a valid point concerning multiple routes under the control of one person. I noticed Fred Smith gave you one star on each of your posts so be careful you don't raise his ire!
    [​IMG]

    I don't know this one way or the other but I've always wondered if Fred was trying to have his drivers be like a Snap-On or Matco tool distributor. To me the big difference with this is the tool guy owns everything on the truck and he does set his own hours so the comparison is not perfect either.

    You could use the independent trucker as such because they don't own their loads either but are just basically told have this at such & such by such & such and it's up to them to get it there when and how they choose. With FedEx Ground I guess this is similar but instead of days like most independent truckers the FDX guys have hours.

    I also wonder if this was such a good way of doing things why hasn't FedEx Air converted to this method? They have no union to stop it and if the financial rewards for the drivers were so good why haven't the express guys demanded it? Personally I think Fred Smith was smart to use this approach until he builds up his density and then switch to a more tradition workforce. All he has to do is hold off the legal hounds until this happens and then when the time is right make the offer to convert as a means to settle with limited past liability such as they'll buy back all vehicles and pay some associated costs which they had already planned to do anyway and had budgeted for such and instantly they have a rolling fleet with drivers who are now happy campers to be official FedEx employees with all the associated benefits of such making them feel like they won.

    Well that's my thinking outside the box for what it's worth. I think I heard the going rate was a penny but I'm sure someone here (like OK) will suggest a much lower number.
    [​IMG]

    Be interesting to see how this goes as even though nothing is resolved yet as each day goes by I hear more and more negative from this approach to operating their business this way.
     
  9. racerx

    racerx Guest

    Ya know Converting the FedEx ground drivers to employees when the density hits a certain level may be what he is trying to do, but the fact that this issue is in the courts leaves a HUGE liability in place for FedEx. If the courts rule that these drivers are, and have been, actual employees of FedEx, the major hit on the company will not be current wages and benefits they have expenses for the drivers now. The big problem will be back pay and benefits that the court will award all current drivers and anyone who has been a driver. And given the fact that Fred is not as cash rich as we are, I dont know how that company could handle that type of expense.
     
  10. wkmac

    wkmac Guest

    racer,
    Lawyers can drag stuff out for a very long time in the civil arena and in that time density can be built. Then in walks Fred and his lawyers drop some legal bomb that will either drag it more or makes the plantiffs position a little iffy but then Fred being the nice guy offers to settle, plantiff lawyers say take the deal and then these guys get to be employees with some limited back compensation and Fred get the early wiggle room with FDX Ground he needed while at the same time he was putting away money for this rainy day and it's no big deal as the whole thing was planned out to begin with.

    Then again, you could be right and they clean his clock in court.
     
  11. ironylife

    ironylife Guest

    good....burn baby burn. racerx, are you trying to say that wages, gas, insurance, accident libality, uniforms, driver claims, dr bags, etc, etc, wouldnt add up now. They have 17, 000 drivers....yes it is a drop in the bucket to the amount of ups trucks but still adds up to probably millions a week. Along with the backpay, its bad new for fred and his crew. Has anyone heard of ssi solutions from ups. This kind of marketing that were doing takes advantage of fedex 3 different sections...home ground and air. The businesses that are using this service with ups are giving us 100% of volume, incomming and outgowing. It is winning back millions of packages back to ups. When this gets going full steam, fedex will have to have one truck doing all types of service levels.
     
  12. racerx

    racerx Guest

    No, no........... I agree that when Fedex has to worry about all the things that you listed, irony, they will have added expense. But it will just be a percentage increase in their operating budget. BUT, if the drivers are awarded back pay and big punitive damages, that is one check paid at one time. It would be a lot more difficult to absorb than just a percentage increase to a line in the operating budget.
     
  13. workinstiff

    workinstiff Guest

    Fred Smith does not control what goes on at Ground division. It is the Ground division CEO Daniel Sullivan, who actually conjured up the "independent contractor" model. As you guys already know, each fedex division while flying under the same purple "flag" actually operates completely independent of one another.
     
  14. ironylife

    ironylife Guest

    you know what the sad part is racerx, if fedex does get wacked with such a huge liability, their stock will probably go up 50 bucks a share cause they cant do no wrong by wall street standards. Anyway, in the long run this is absolutely a positive thing for ups.
     
  15. rover

    rover Guest

    If the precedent is set with fedx drivers being employee's & back pay & Million$$$$ owed them, then just imagine what UPS will have to pay to settle with UPSstore owners
     
  16. racerx

    racerx Guest

    Rover the UPS Stores are franchises, not independent contractors. I dont think we have the liability of having to pay millions and millions in back pay and benefits like Fedex would have to do. The disgruntled UPS Store franchise owners have never claimed that they are defacto employees of UPS they are suing over the fact that they think the contract that they signed with us is unfair. As a matter of fact, if you asked any of these owners if they considered themselves UPSers, they would laugh in your face. What they are upset about is that under the Gold Shield program, the prices that they can charge for UPS shipping is controlled by UPS they can no longer charge $15 for a 1 lb ground package going across state. They are livid because we are telling them what they can and cant do.
     
  17. susiedriver

    susiedriver Guest

    From the Fedex web site:


    Frederick W. Smith is chairman, president and chief executive officer of FedEx Corporation, a $30-billion global transportation and logistics company.

    Smith is responsible for providing strategic direction for all FedEx Corporation operating companies, including FedEx Express, FedEx Ground, FedEx Freight, and FedEx Kinko's. FedEx serves more than 220 countries and territories with operations that include 670 aircraft and over 70,000 vehicles. More than 250,000 employees and independent contractors worldwide handle more than 6 million shipments each business day. Since founding FedEx in 1971, Smith has been an active proponent of regulatory reform, free trade and "open skies agreements" for aviation around the world.
     
  18. ok2bclever

    ok2bclever Guest

    As the Ground division is ground based and essentially a separate entity to the air company wouldn't it/shouldn't it be governed by the same branch of the government that we are versus the air bailout parameters that Fed Ex proper gets to abide by?
     
  19. racerx

    racerx Guest

    Well, as far as I am concerned, over the years we have become mirror images of one another (except we are better!!!!![​IMG]) in terms of what services we offer. That being said, we should both be under the same labor laws. To say Fedex is an airline and UPS is a trucking company is about as accurate as a first day PAS stop count. How in the world the courts can continue to allow Fedex to operate under RLA rules is beyond me..

    But again, if Fedex Ground is not a separate company from Fedex Express, I dont know how it can be under a different set of laws.
     
  20. susiedriver

    susiedriver Guest

    Yes,

    They(Ground) are under the NLRB. Fred Smith has vowed to never have a union in again. He has spent whatever it takes to assure that. He has publicly stated that he would shut down before he allowed a union.

    So far, he's been true to his word.