Glad I'm out of this Part2

Discussion in 'FedEx Discussions' started by bacha29, Aug 20, 2015.

  1. bacha29

    bacha29 Well-Known Member

    IN response to questions. I was a day one contradtor at a small rural terminal that was designated for closing twice in it's first 3 years of operation. I remained a SWA contractor till the end despite opportunities for additional routes. Why? Because if you were to give that driver what he is entitled to have and that is a family sustaining wage, a basic employer paid health care plan and something in the way of a pension you'll have a return on your moneyof about 6%. I can buy a utility stock that pays that much. MIght as well give the guy the route. To pay him less than that then all you have created is transitional employment. Just the job between jobs, something to tide them over until something better comes along. And you can't assume that there will always be someone to take over. If that truck sits there that morning then you are in default.With additional routes the risk/reward ratio is even more overshifted onto the side of risk.FX plainly admits that the business model has nothing to do with creating equity for contractors but rather to acquire trucking and labor a below average market cost for the purpose of maximizing returns. Proof of that is found in the fact that grounds revenues comprises on 21% of the corporations total revenues but accounts for 78% of it's total profits
     
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  2. It will be fine

    It will be fine Well-Known Member

    Couple issues with all this. You assume transitional employment is a bad thing. I would argue that is exactly what this job should be. It is far too physically taxing to make a career. The odds are against someone doing this job for a few decades without a major injury. Keeping someone stuck here with health benefits and a pension does them a disservice. It should be a job for 5 years max.
    Your 6% figure doesn't make sense. If you were a day 1 contractor there is probably 20-30 trucks at least covering the area you started with. If the only investment you had to make over the years was truck purchases your return would be significantly more. So spend $50k on a truck, make $10K a year profit off that truck for let's say 12 years you've made $120K from that initial investment. That's better than a utility stock. Had you continued to service the entire area this entire time you'd have a company grossing $2-3 million annually with little to no debt. There would be significant equity in that company.
    Honestly, and no offense intended, this type of thinking is exactly why FedEx is pushing the ISP model and scale requirements. It doesn't want to do business with people that just want to drive a truck. SWA drivers that want to stay SWA are Ground employees. They are not businesses looking to expand and increase profit.
     
  3. DRAisawesome

    DRAisawesome Active Member

    It will be Fine.....you are missing the boat on this one. He was stating and yes it's his morals that he has. He wants to pay a livable wage and fedex ground does not want or provide the income to do so. That's all he was saying. He doesn't want to be part of the continued problem but would rather move on to something else.
     
  4. bacha29

    bacha29 Well-Known Member

    Good evening'It will be fine"To begin with my territory consisted of 34 zip codes stretched across 4 counties and included 3000 miles of RD mail carrier territory the vast majority of it unpaved township turkey paths. In addition you appear to be another person who simply wants to dispose of a driver after a few years due to the risk of injury and or illness. Whether he's there 1 year or 30 years that person and his family deserves the same level of security you expect for yourself and your family. If you can't get enough out of a Fedex operating agreement to give that person a minimum level of security then that guy owes you nothing. Remember Fedex calls you multi route guys "entrepreneurs" You are definately not entrepreneurs. Why not? An entrepreneur is a price maker. You guys are just price takers.
     
  5. It will be fine

    It will be fine Well-Known Member

    Without significant debt you can pay a driver $50-60K/year and still make a decent profit. That's a livable wage in most of the country. It's an excuse to justify the unwillingness to take the risk.
     
  6. STFXG

    STFXG Well-Known Member

    On a rural route that isn't happening.
     
  7. It will be fine

    It will be fine Well-Known Member

    I imagine a livable wage is also much less in rural areas. It's also a question of scale. At the size this guy could have been at now he could take as little as $3k/yr/route and pay himself $90k a year. With as generous as he claims he would be as a boss there would be plenty left for a driver's security.
     
  8. STFXG

    STFXG Well-Known Member

    A rural area isn't going to have that many routes. My terminal has less than 50 routes and started with 5 originals. The rural areas have only split a couple of times. They also pay less than metro areas. To split a rural area is to take a big hit in pay. I can see how some guys get stuck. It's not worth going from a single route owner to owning two or even three routes. There's a hump where you have to get to 4 routes to make what you were making as a single route driving yourself. I've seen a lot of guys happy to just sell off areas in chunks rather than taking on the headache of supplementals and running two routes.

    These routes pay significantly more than they did even 5-10 years ago. It just wasn't worth the headache to many to go through the growth pains. After the Estrada case everyone knew what was coming. Some have tried to just ride it until the wheels fall off, some have tried to grow, and some have sold out. My original route has only split 3 times since I started over ten years ago. That includes adding HD. So I understand where this guy is coming from. Rural routes are a different game than metro. With the good (far less stress) also comes the bad (less growth).
     
  9. bacha29

    bacha29 Well-Known Member

    Thanks guys . In 23 years our barn has gone from 4 routes to 17. Another thing to keep in mind. The core zone formula is blind to RD's.Another thing to remember. The vast majority of multi route contractors pay their guys on a perdiem basis without ever bothering to read up on the Fair Labor Standards Act. The act plainly states and if you don't believe me read it for yourself that a blue collar worker employed in interstate transportation which this endevor clearly is is to be paid an hourly wage with time and a half after 40 hours In addition Saturday is a stand alone time and half day simply because it's Saturday. Wait till some HD drivers figure this out.Now understand that a contractor can pay his local P&D drivers a per diem or on a per trip flat rate as long as that driver does not work more than 40 hours per week. It's only a matter of time until a disgruntled employee or former employee figures this thing out, sets off a fire storm and scores of multi route contractors find themselves in front of a NLRB judge.How bad can this get? They go back 2 years more years can be added if the judge thinks it's flagrant enough. Therefore the contractor can be on the hook for 2 plus years of unpaid overtime, plus interst, plus fines, plus court costs and the plaintiffs attorney fees along with his own. Some line haul guys in CA have figure this out and have already filed suit to get ahead of the maelstrom that's certain to follow. Mr. "It will be fine"', this is just the beginning. Can you say" federal grand jury indictment".
    The charge?....... Willful tax fraud.
     
  10. overflowed

    overflowed Well-Known Member

    interesting. Code 82 what do you think of that? NRLB board for you?
     
  11. It will be fine

    It will be fine Well-Known Member

    Thus, the 13(b)(1) overtime exemption applies to employees who are:
    Employed by a motor carrier or motor private carrier, as defined in 49 U.S.C. Section 13102 (see Employer below);
    Drivers, driver’s helpers, loaders, or mechanics whose duties affect the safety of operation of motor vehicles in transportation on public highways in interstate or foreign commerce (see Employee Duties below); and
    Not covered by the small vehicle exception (see Small Vehicle Exception below).
    This is the exemption from overtime for drivers.
     
  12. STFXG

    STFXG Well-Known Member

    Bacha29 you are correct only for those driving vehicles under 10000 gvw. Many of these HD guys running sprinters and other cargo vans are operating illegally. Eventually someone will get sued over it.

    Pretty much anyone driving a step van is covered under the motor carrier exemption like stated above.
     
  13. overflowed

    overflowed Well-Known Member

    He did say wait till some HD drivers figure it out.
     
  14. STFXG

    STFXG Well-Known Member

    And I agree with him. Blows my mind. I am the ONLY one in my building that pays OT. Pisses me off to be honest. Not because I do, but because they don't. But then I think the motor carrier exemption is BS for our industry. Even those driving step vans should get paid OT.
     
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  15. bacha29

    bacha29 Well-Known Member

    Just keep in mind a couple of things. Whether you have one employee or 30, they are entitled to the full benefit of collective bargaining. The second matter is that you exist as a Fedex multi route contractor purely on the basis of your ability to provide them with truckng and labor at below average market cost. . You exist for no other reason. They have plainly stated that fact. The first time you fail to do so , out you go to be replaced by someone who thinks he can do it. If you treat the people who keep you in existance like second class citizens you will fail for certain. As long as there is someone willing to go out there and give you top of the scale performance for bottom of the scale money you will continue to exist but with the continued downward pressure on settlements you will have to dig deeper into the socio/economic underclass of this nation for warm bodies. Remember you get waht you pay for .Perhaps that explains the growing number Fx routes listed by route brokers and the job boards overflowing with nationwide help wanted ads placed by desperate contractors.
     
  16. bbsam

    bbsam Moderator Staff Member

    I think you make stuff up.
     
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  17. It will be fine

    It will be fine Well-Known Member

    Blah, blah. I'm sure the teamsters will be beating down the door of all my drivers right after they finish losing at Freight. Where is there downward pressure on settlement? Mine goes up every year, it doesn't always cover the cost of the additional resources needed, but I'm still profitable and will continue to be. Even if I lose money on a couple routes for a few years, with our growth they fill up and start generating profit eventually. It's just a cost of doing business.
    I'm amused you rag on the people that do this job ignoring the fact that you did it for the last 23 years. Drivers only make around 10-15% less than a SWA contractor, but without all the stress. They also get paid time off, don't have to work sick or injured, don't have to deal with anyone from FedEx, tend to work far fewer hours than contractors. What a bunch of lazy crappy people those drivers are.
     
  18. bacha29

    bacha29 Well-Known Member

    Hi Mr. It will be fine. How come you never said anything about the benefits that actually cost money like pensions and health care?Look all I'saying it that I.m happyto be out of it because there are two things that will never happen. Fed ex is never going to give you guys enough money to acquire high character, highly productive highly reliable personnel employers all want. You will always be bottom feeders taking what nobody else wants. Disaffected, disinterested people moving freely from one :censored2: job to the next.Are those the people you're willing to bet everything you've got on? Especially given the companies continously escalating level of command and control over you the people they proclaim to be " independent contractors". Not to mention the fact that you made it clear that they will be disposed of the moment they can no longer do a zillion stops a day. Secondly fedex will never incur even one cent of potential liability in defense of the well being of the people out there doing their dirty work making all their money for them. They have you to do that. And thresholds? Thresholds are nothing more than poorly disquised production quotas that will weigh heavily on the growing disparity between the value the company demands from your people and the value you and you alone are able to give them leaving you stuck in the middle with the impossible task of trying to find a way to bridge the gap. Ps. those routes you say you are losing money on are in all likelihood " supplementals" . Supplementals out the every day. That's not a supplemental. That's a noncontracted route, Don't agree? Ask youself this question. What would be the incentive for the company to spend the money to convert that noncontracted route to a contracted route when the desired effect is already being realized?
     
  19. It will be fine

    It will be fine Well-Known Member

    Paragraphs man please. I'll forgive your ignorance since there probably aren't many multiple owners in your building of 17. My crew is of high character and productive and reliable. I wouldn't be able to sit around on my couch all day if they weren't.
    I've gone over benefits before. Health, they're better off without my offering it with the ACA and the current subsidies. Pensions are a dying breed in Murica. I've thought about a 401K, but when most of my people aren't even contributing to an IRA it doesn't seem worth the hassle.
    Thresholds and supplementals are gone in the ISP model. When I add a truck there is no more revenue coming from FedEx. We have peak thresholds, but any extra revenue I get from those gets paid out to all my drivers.
     
  20. overflowed

    overflowed Well-Known Member

    Do you understand why they aren't contributing to an IRA?