As far as combining the two I don't see how it can be done unless the two were in the same building.What I think you will see sometime in the next 5 years is delivery 6 days a week year round with the contractors work force working split and rotating work shifts. Go ahead and laugh if you want but what can stop them if that's what they want? Absolutely nothing. Understand, I want you guys to succeed but I am happy that many of you are taking a more cautious approach now that you are better informed of X's history and past practices. Hopefully many of will have a better understanding when I say, change is the only constant and nothing is trully binding.
Glad I'm out of this Part2
- Thread starter bacha29
- Start date
It will be fine
Well-Known Member
Every new building they build is a co-lo. It's not too difficult to divert zip codes to the same building if they need to. They are eliminating all branding for HD, so they want it to kinda go away as an organization and just be fully integrated with Ground. It will become just a service. I can see them making owning both services a requirement for scale. If you don't own both by the end of your contract you're SOL. It'll take time, but what they strongly suggest today they will outright demand tomorrow.
I can definitely see that being a possibility. Which I would admit will be an awful transition for all of us. None of us WANT a 6 day workforce but most will be able to adapt. If it does happen that is where the biggest pain will come by far. If you are are a big Ground guy hopefully the the HD guy is large and you both can do some swapping (vice versa as well). If you are a single, little guy, or have no connected routes it would be a blood bath. I could see X siding much more with the larger contractor/provider if push comes to shove. Temporary devaluation would most definitely happen followed by a large raise in value after. Supply factor would be cut between 1/2-5/8 and the individuals that are left would be sitting pretty.
If fedex wants to keep using 'independent contractors.' every terminal will need to be contracted to one company.
If you are 'swapping packages' among contractors, and still need fedex permissions to do that or to buy routes, sell parts of routes, etc, you are not really an IC. Fedex needs to contract out the entire delivery portion of their ground delivery, maybe even including sort, to truly be a logistics company instead of a delivery company.
And even then- if McDonald's franchise owners have co-employer status with McDonalds corporation, surely Fedex's IC model doesn't meet the standard of independence. This won't take just 2-3 years, but at least another decade while fedex fights the inevitable.
Fedex will not be able to afford to have different systems in place in different states. In the end, it will be cheaper to have employees who provide vehicles. 1/4 of a billion dollars plus another $30k per route for remaining routes in Ca adds up to more than employees would have cost.
If you are 'swapping packages' among contractors, and still need fedex permissions to do that or to buy routes, sell parts of routes, etc, you are not really an IC. Fedex needs to contract out the entire delivery portion of their ground delivery, maybe even including sort, to truly be a logistics company instead of a delivery company.
And even then- if McDonald's franchise owners have co-employer status with McDonalds corporation, surely Fedex's IC model doesn't meet the standard of independence. This won't take just 2-3 years, but at least another decade while fedex fights the inevitable.
Fedex will not be able to afford to have different systems in place in different states. In the end, it will be cheaper to have employees who provide vehicles. 1/4 of a billion dollars plus another $30k per route for remaining routes in Ca adds up to more than employees would have cost.
The MWA ISP model is facing challenges in Ca. Anyone with less than at least 5 routes can't really subsist for long just for the fact that you will need to have at least one replacement available for every two drivers to keep them all happy and avoid overtime pay. As long as fedex is the one determining the minimum numbers of hours per route,experience, you have to provide that number of hours, and as soon as you place a supplemental in service, you are working for nothing. And unless you continue to service an area you agree to service, unless you hire a supplemental at some point, you risk losing part of your contract, or more likely, all of it. And then, almost no contractor accounts for the real depreciation they and think it is just a line on their taxes. Try selling a van with 100k miles on it and see if it covers what you owe on it. No one ever counts that in their valuation of their business.
Slick silver
Well-Known Member
I think it will become were you have just one contractor at each terminal. Back when I work there, even the guys who owned 3 routes couldn't keep afloat. So many horror stories of guys not getting paid or getting bounced checks. Like you said it inevitable, like monopoly. There is only one winner.. Just how long do you play before realize the guy with board walk and park place is taking all the routes.
Does your 'contract' really allow you to do that without fedex approval?? Granted fedex usually doesn't question it, but they could stop it. The right to control counts toward IC status, not the actual exercise of control. And fedex keeps the right to control, even if you believe that you have control.
Guys you really nailed it. Supplementals lose money . Moreover they end up going out on a continous daily basis. That's why I've always said that they are not supplementals, they're noncontracted routes. Given the savings that supplementals save X ask yourself this question. What would be the incentive for X to convert a noncontracted route to a contracted route when the desired effect is already being realized? DMAC you and thank you have offered an interesting concept. A company employee but one who owns and leases to X a truck . In the face of a growing avalanche of law suits X still has a variety of alternative business models to offer inorder to apease it's addiction to cheap trucking and cheap labor. Anoother thing to keep in mind. Your TM may try to tell you that you have to do 99% service every day. The contract atleast the one I signed called for a "competive" level of daily service. It makes no mention about 99%. Be open to all possibilities given what is to be a nightmare of a peak season Good Luck to all. P.S. DMAC 1. I now what you mean by depreciation. Trucks are some of the fastest depreciating pieces of equipment known to the U.S. economy. When I packed it in in May 2015. My one truck had 340,000 miles on it. The other 489,000 miles.
There is a lot of untrue statements being said in the last couple posts. I don't have the time to get through all of it but even just the point that STFXG disputed shows that I don't believe you have first hand knowledge of the operation especially multi route operations.
One contractor per terminal will never happen. They don't even want one contractor owning more than 15% of a terminal let alone 100%, reasons can easily be found. There were three terminals late last year that were all rural, ran by one contractor that lost it and disappeared for two months. Obviously drivers didn't keep it going and he had his contract pulled. Those terminals were a disaster and still from my understanding are not anywhere close to back on track.
Can't make things work with 3 PSAs and needing a floater for every 2 drivers is complete non sense as well.
One contractor per terminal will never happen. They don't even want one contractor owning more than 15% of a terminal let alone 100%, reasons can easily be found. There were three terminals late last year that were all rural, ran by one contractor that lost it and disappeared for two months. Obviously drivers didn't keep it going and he had his contract pulled. Those terminals were a disaster and still from my understanding are not anywhere close to back on track.
Can't make things work with 3 PSAs and needing a floater for every 2 drivers is complete non sense as well.
FedEx GT. Good points. However with the company paid temps on the way out and expected to be all gone by the end of 2016, that means that the contractor is going to have to keep additional trucks on hand and part time manpower standing by and willing to be called out on a moments notice to handle volume spikes and we all know about the lack of consistant volume, not to mention figuring what to do for peak season will be the contractors misery Therefore a ratio of 1 sup for every 2 contracted routes will not be the exeception. Moreover finding people willing wait around in the morning to see if you are going to call just about an impossible task.
Sure GT, you might make money with them in some demographics. Out where I am and still on the old IC format. There's no corezone, no van availability, no fuel supplement. Now add to that 200+ miles per day most of it unpaved township turkey paths and about 50 maybe 60 stops about the same number of boxes and don't forget getting stuck a couple of times every day and have to send a wrecker out to get them.
I speak from having 3 HD routes and a forced supplemental in a semi-rural co-lo. Mgmt also REQUIRED me to drive 50 miles each way from one route to another route whenever that driver was overloaded. and they thought I had less than 11 hours of work. Try to make money on that when mgmt doesn't care if you make money. Sometimes as few as six packages, but as many as 44. 6 packages didn't pay for gas, let alone time, and 44 packages after 7 hours servicing my own PSA plus the 100 mile round trip was impossible. I ran a supp during peak, but they kept assigning the same extra area after peak. I needed to have 4 drivers plus myself available everyday, in case one was sick. I paid $12.50 an hour, plus a bonus per package after what I calculated as an 8 hour day. My drivers made about $125 a day. No benefits. I made less after all expenses, including actual depreciation. I kept my vehicles maintained, and replaced every 2 years, always owing more that value. In rural areas, you can't use an unreliable vehicle, and 200+k miles is pushing it.
Others feel fine paying as little as possible, but they don't get my respect as entrepreneurs. In addition, I always had to have extra drivers ready to go. To give everyone enough work to keep them available, I had to drive less. But I still needed to be at the terminal, even earlier than when I had just one route. Then I had to be available to train, interview, rescue, replace a driver any time.
Others feel fine paying as little as possible, but they don't get my respect as entrepreneurs. In addition, I always had to have extra drivers ready to go. To give everyone enough work to keep them available, I had to drive less. But I still needed to be at the terminal, even earlier than when I had just one route. Then I had to be available to train, interview, rescue, replace a driver any time.
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That is unfortunate, no I don't have rural routes. I can't give too much insight on that since it is out of my realm.
The very fact that they REQUIRE an "independent" contractor to have more than one route, but not more than 15% proves the point that you are not independent.
.......It really doesn't. Shows that they have a vested interest in contractors fulfilling obligations.
dmac1. I experienced the same thing during my 23 years of it. My problem was that the core zone is based on a straight line drive to a given town. One of my towns, the biggest one [pop. 5,900] was 25 miles from the terminal but it included but was not factored in to corezone formula 480 miles of R.D. mail carrier miles. Overall I had 34 zips stretched across 4 counties and included 3,000 miles of R.D. carrier miles. Went into the terminal at 7AM never got back before 9PM That was before they cracked down on HOS. Before that 11:30, midnight sometimes as late as 3 AM was about right .The first truck I had was of course speced out by city minded RPS. The second one I speced .A Ford E350 cut away.7.3T Powerstroke 4R100 Trans all sitting on top of a Quigley 4X4 undercarriage. Big help in the winter. Had to lie to get it through Mgt. as a P700. After word got out and nothing could be done about it company Ex's were coming out to look at it and get pictures but when it came time to replace "Oh no" I had to get P700. a suicide mission in the winter time. When we got a new TM one of the few who are not brain washed when we get asked me what I needed. I said " A U.S.Army deuce and a half. He said, "You get it, I'll sign off on it" but I knew that city minded X would never let it go through. You my friend are not lying about anything you have said about your experiences. Any doubters can come see me.
