Glad I'm out of this Part2

[dmac1]

I'm beginning to wonder if you understand basic english. When fedex bought RPS, it was a lot cheaper for them. Now that cost has risen. I say it is either at or very close to the point where those costs savings have been negated by all the changes they have been forced to make to accomplish their goals. And current cases are going to reduce those savings further. Why can't you just admit that fedex is saving little compared to 15 years ago? You WILL see fedex being much more efficient when they can use employees without having to even think about contractors. Computers alone can shift packages to create daily the most efficient loads without artificial boundaries. Fedex could have early and late sorts without drivers waiting.

I saw all kinds of inefficiencies, as I am sure you have seen, if you will admit it. Keeping the ISP contractor models prevents fedex from getting packages delivered in the most efficient way possible.

 

[dmac1]

But why not just make all contractors employees and pay them hourly? Isn't that why contractors signed onto the lawsuits in the first place?

Contractors signed on to the lawsuits because fedex was treating them like employees and making arbitrary rules. Those people wanted to be independent, but fedex wouldn't let them. SO by law, since they were employees, they decided to sue because fedex was breaking the law. Fedex worked over the years to get rid of the free thinking entrepreneurs and kept those who really just need a big daddy figure to tell them how to operate their business. If it is your business, why can't you hire anyone you want, even if they don't have experience? Why can't you hire them, train them over a period of time, and decide for yourself if they are ready? Why do you give up your rights when it is suppose to be your business? Why can't you operate a chevy spark loaded up with 10-15 packages without fedex approval to deliver remote packages? Why not a motorcycle? Why can't you subcontract with someone instead of being required to treat your drivers as employees? Fedex needs to quit worrying about how the package gets delivered. Until then, you are an employee who thinks he is a contractor.

Rules like requiring a driver to carry additional work if his contracted area only had 7.5 hours work, while their arbitrary rules demanded 9.5 hours or more to satisfy the engineers. Rules like arbitrarily disallowing use of a perfectly fine vehicle because it didn't match their corporated decicion to go to a new style of vehicle. Contractors who didn't want to upgrade to a bigger vehicle even though they were still servicing their contracted area were non-renewed even though they had met or exceeded performance standards.

You seem totally unaware that fedex has an entire set of rules in their 'handbooks' that are completely extra-contractual, yet you are required to follow them.

 

[bbsam]

Contractors signed on to the lawsuits because fedex was treating them like employees and making arbitrary rules. Those people wanted to be independent, but fedex wouldn't let them. SO by law, since they were employees, they decided to sue because fedex was breaking the law. Fedex worked over the years to get rid of the free thinking entrepreneurs and kept those who really just need a big daddy figure to tell them how to operate their business. If it is your business, why can't you hire anyone you want, even if they don't have experience? Why can't you hire them, train them over a period of time, and decide for yourself if they are ready? Why do you give up your rights when it is suppose to be your business? Why can't you operate a chevy spark loaded up with 10-15 packages without fedex approval to deliver remote packages? Why not a motorcycle? Why can't you subcontract with someone instead of being required to treat your drivers as employees? Fedex needs to quit worrying about how the package gets delivered. Until then, you are an employee who thinks he is a contractor.

Rules like requiring a driver to carry additional work if his contracted area only had 7.5 hours work, while their arbitrary rules demanded 9.5 hours or more to satisfy the engineers. Rules like arbitrarily disallowing use of a perfectly fine vehicle because it didn't match their corporated decicion to go to a new style of vehicle. Contractors who didn't want to upgrade to a bigger vehicle even though they were still servicing their contracted area were non-renewed even though they had met or exceeded performance standards.

You seem totally unaware that fedex has an entire set of rules in their 'handbooks' that are completely extra-contractual, yet you are required to follow them.

You ask a lot of "why" questions. The answer is simple: The NLRB Mcdonalds ruling.

It's a catch 22. Just because the ruling just came down doesn't mean legal didn't see it coming. Legally they have to make sure contractors are paying at least minimum wage etc. But then again legally they can't operate all aspects of the contractor's business. It's definitely a complex situation and unless contracting and franchising made nearly illegal, X will continue down the same path.

 

[bbsam]

I'm beginning to wonder if you understand basic english. When fedex bought RPS, it was a lot cheaper for them. Now that cost has risen. I say it is either at or very close to the point where those costs savings have been negated by all the changes they have been forced to make to accomplish their goals. And current cases are going to reduce those savings further. Why can't you just admit that fedex is saving little compared to 15 years ago? You WILL see fedex being much more efficient when they can use employees without having to even think about contractors. Computers alone can shift packages to create daily the most efficient loads without artificial boundaries. Fedex could have early and late sorts without drivers waiting.

I saw all kinds of inefficiencies, as I am sure you have seen, if you will admit it. Keeping the ISP contractor models prevents fedex from getting packages delivered in the most efficient way possible.

If you simply look at quarterly reports you will find that while RPS was a very cheap company to run, the ISP model continues to pay huge dividends that Express and it's army of employees can't come close to matching. And you think X is ready to fold? Not even close.

 

[dmac1]

You don't seem to have any answers to my questions. The reason you can't use a motorcycle is because you are an employee, even as an ISP.

And you could pay your drivers as independent contractors, or subcontractors, except fedex wants control. And control is what makes you an employee.

If you hire a plumber, or carpenter for a one time job, and then try to tell him what vehicle to use, and who he can subcontract with, and how to pay subcontractors, you would be called nuts. Fedex is nuts for the same reasons, but even more so, since you are essential to there business, and drivers are a permanent part of their operation. According to law, those factors add up to employee status. If fedex had no control over who you hired, or what you drove, or who you sold your business to, you would likely be independent businesses. Can you imagine a plumbing busing owner being told he couldn't sell his business because one of his clients didn't like the buyer???? It is just crazy.

 

[dmac1]

If you simply look at quarterly reports you will find that while RPS was a very cheap company to run, the ISP model continues to pay huge dividends that Express and it's army of employees can't come close to matching. And you think X is ready to fold? Not even close.

Getting closer every day. The ISP model has barely been implemented. These legal rulings and costs of settling are just starting to come in. And even the ISP model itself is more expensive because now the ISP has higher costs that fedex needs to pay enough to cover. And since the savings from not paying employment taxes is now gone, once the entire country is ISP, that major reason to use contract labor is gone. Fedex can hire and pay drivers the same rate the ISP is, and probably get a discounted rate on UI, worker's comp, vehicles, insurance, etc. If you think that you could buy 5 vans for the same unit price fedex could buy 10,000, then of course you would think that the ISP is the best they can do.

 

[bacha29]

As a contractor regardless whether you are an ISP or old IC one thing remains the same. All you are in reality is a labor and truck lessor.Don't overlook the possibilty of some day X handing over delivery staff requirements to a nationwide labor lessor or staffing agency and it's truck requirements to a national trucking concern such as Penske or Rapidways or Ryder. X has an almost infinite number of options. Given that fact any contractor regardless of size must take some steps in preparation for what could be a protracted period of volatility and rapid turns of events. Believing that it will always turn out in your favor is a luxury you cannot afford to give to yourself. The time to prepare is now. I think we can all agree on that.

 

[M I Indy]

You ask a lot of "why" questions. The answer is simple: The NLRB Mcdonalds ruling.

It's a catch 22. Just because the ruling just came down doesn't mean legal didn't see it coming. Legally they have to make sure contractors are paying at least minimum wage etc. But then again legally they can't operate all aspects of the contractor's business. It's definitely a complex situation and unless contracting and franchising made nearly illegal, X will continue down the same path.

It will become too complex with states tightening the factors. Some tests already in place X can't pass due to control in excess. Too much to manage (individual state regulations) with possibility of liability still existing. No unilateral contracts, different levels of control per state, the headaches will pass the savings.

 

[bbsam]

It will become too complex with states tightening the factors. Some tests already in place X can't pass due to control in excess. Too much to manage (individual state regulations) with possibility of liability still existing. No unilateral contracts, different levels of control per state, the headaches will pass the savings.

Then something has to go. Either contracting/franchising or the "co-employer" idea.

Or as I've always said, for the X model to change drastically, the law covering contracting will have to change. That law will have a lot of big, big money buying off and "persuading" law makers. If anyone thinks the McDonalds ruling is going to massively change all franchising and contracting in this country (and all that implies), I think they are mistaken.

 

[bacha29]

Guys Keep one thing in mind. Back in 1993 and only under the threat of an Internal Revenue lawsuit did RPS and FXG is still the same thing different name did this company grudgingly grant goodwill. Don't say it's B.S., I was there when it happened. If fact they tried to erase all record of our activity prior to the late 1993 ruling. We wouldn't let them get away with it. Now ask yourself this much. Why would a company that says it is dedicated to the creation of and this is a Fred quote,' small trucking companys' fight so bitterly in an effort to avoid having to grant contractors the most basic tool needed to create value? Simple. They thought all they needed to do in order to enable them to proclaim us as independent contractors was to shove as much risk , liability and variable costs on to us and thereby still enabling them to retain full command and control equal to that of an employee. That mindset still exists and they will fight to the last man and last dollar in defense of it until the cost of that position exceeds the savings it generates. The only question is how long it will take until that threshold is crossed.

 

[OUMick]

In my opinion, the ISP model will stay for quite a while. As you talk about above Fedex likes to be efficient. They wouldn't have blown the money on the ISP program (still implementing) and then turn around take over all the routes. I would imagine any major change to ISP is 10 to 15 years away. It remains to be seen if taking over ground would be the next step. At some point it may be a step they take. It would also have to justify the cost to switch over. It's not as simple as just taking the routes. Taking over the routes would be a huge. The planning for that would take years in itself.

 

[bacha29]

OUMick: I too believe that the 10 to 15 timeline you mentioned is about right. Federal legislation that more closely defines what an independent contractor actually is may move it up a bit. A new fed ex board of directors that puts control in the hands of new generation of directors may speed it up. Ten to 15 years is what every contractor should plan for and if a really good offer comes along during that time they owe it to themselves to take it and let the next guy deal with the volatility certain to come.

 

[dmac1]

Just remember that converting to ISP reduces the number of potential claimants. So just by reducing the number of contractors, fedex is already making any change to employees cheaper. IN addition, the change to ISP ensures a larger number of drivers ready to take over routes. Since the ISPs don't drive, fedex already has enough drivers, they just need vehicles. Buying vehicles(or leasing them) from ISPs solves most of that issue. It makes sense in a lot of ways to change to ISPs just to make it easier to go to an employee workforce more quickly when the time comes. I think the conversion to an employee workforce could occur as soon as the first state decides that the ISP model is no better than the IC model.

 

[bbsam]

Just remember that converting to ISP reduces the number of potential claimants. So just by reducing the number of contractors, fedex is already making any change to employees cheaper. IN addition, the change to ISP ensures a larger number of drivers ready to take over routes. Since the ISPs don't drive, fedex already has enough drivers, they just need vehicles. Buying vehicles(or leasing them) from ISPs solves most of that issue. It makes sense in a lot of ways to change to ISPs just to make it easier to go to an employee workforce more quickly when the time comes. I think the conversion to an employee workforce could occur as soon as the first state decides that the ISP model is no better than the IC model.

So why, in your own words, does FEDEX not just do that right now?

 

[OUMick]

Just remember that converting to ISP reduces the number of potential claimants. So just by reducing the number of contractors, fedex is already making any change to employees cheaper. IN addition, the change to ISP ensures a larger number of drivers ready to take over routes. Since the ISPs don't drive, fedex already has enough drivers, they just need vehicles. Buying vehicles(or leasing them) from ISPs solves most of that issue. It makes sense in a lot of ways to change to ISPs just to make it easier to go to an employee workforce more quickly when the time comes. I think the conversion to an employee workforce could occur as soon as the first state decides that the ISP model is no better than the IC model.

It would still be a lot harder than just buying the contractor's vehicles and hiring their drivers. The cash outlay would be immense. Fedex can obviously afford that purchase but you would see a ramp up in cash before it happened. They would have to do an extraordinary amount of hiring before they took on the drivers. It would make more sense for them to employ the contractors and take their business over. Generally when businesses decide to acquire another business they try not to disrupt the model too much at first. There would and could be some huge resentment if they pulled the rug out from under the contractors. Even losing 20% of the drivers (which I think is low) would be catastrophic. I don't think Fedex is wanting to change anything except maybe a few small changes here and there.

 

[oldrps]

One reason RPS/FedEx Ground doesn't have employee drivers is the union. The Teamsters would be at every location signing up drivers and having elections. In the RPS days, if the union word was brought up at a terminal, things happened.

 

[bacha29]

The thing to remember here is that the Fedex Express guys are under the Railway Workers Act and can go union but it will take a nationwide majority vote. Over at Ground they are under Taft Hartley could vote union on a local by local basis. Much easier and that's why the workers are so called 'Independent Contractors". The next few years may be uneventful given the 2010 decision to convert to so called "new" model reguiring everyone to be a S or C Corp followed by the ISP conversion. At the same time continued downward pressure on settlements combined with X's relentless command and control is not likely to promote a peaceful setting.

 

[dmac1]

The thing to remember here is that the Fedex Express guys are under the Railway Workers Act and can go union but it will take a nationwide majority vote. Over at Ground they are under Taft Hartley could vote union on a local by local basis. Much easier and that's why the workers are so called 'Independent Contractors". The next few years may be uneventful given the 2010 decision to convert to so called "new" model reguiring everyone to be a S or C Corp followed by the ISP conversion. At the same time continued downward pressure on settlements combined with X's relentless command and control is not likely to promote a peaceful setting.

Ironically- fedex has made it easier to unionize by requiring ISPs have employees. Teamsters have to only target 1-2 large ISPs at the largest terminals. They don't need to ask for much at first. Then when other drivers for other ISPs see higher wages and some benefits, even minor, they will be easy to organize. Once most drivers in a terminal are unionized, that can work together to force fedex into paying the ISP more to cover costs. That is when the ISP model will crumble. Fedex would never recover if 50% 0f the drivers in each state went on strike. That's how I would plan if I was a union organizerrt slow, ease your way in, and then hit them when they can't refuse- like just before peak..

Since each ISP is a 'separate' business, the teamsters don't need to organize the even the entire terminal at once, just 6 out of ten of 1 ISP.

 

[dmac1]

It would still be a lot harder than just buying the contractor's vehicles and hiring their drivers. The cash outlay would be immense. Fedex can obviously afford that purchase but you would see a ramp up in cash before it happened. They would have to do an extraordinary amount of hiring before they took on the drivers. It would make more sense for them to employ the contractors and take their business over. Generally when businesses decide to acquire another business they try not to disrupt the model too much at first. There would and could be some huge resentment if they pulled the rug out from under the contractors. Even losing 20% of the drivers (which I think is low) would be catastrophic. I don't think Fedex is wanting to change anything except maybe a few small changes here and there.

Fedex doesn't have to worry about a cash outlay to buy vans, or buy out ISPs. Fedex can borrow the money any time they want. They don't need to build up cash reserves. They don't even need to do it nationally all at once. The ISPs in most states won't think twice if fedex says they only have plans to do it in California, for example. Those ISPs will believe whatever fedex tells them without even considering that fedex may not have their best interests in mind. At some point when Fred S loses his paranoia of the union, he will see the benefits to having a team of higher paid drivers who really want to keep their jobs. When he learns that drivers who have been on a route 12 years as opposed to 2 or 3 are more productive, he'll have to do what he should have done 20 years ago. Where he got his fear of unions is not known by me.

 

[bbsam]

Fedex doesn't have to worry about a cash outlay to buy vans, or buy out ISPs. Fedex can borrow the money any time they want. They don't need to build up cash reserves. They don't even need to do it nationally all at once. The ISPs in most states won't think twice if fedex says they only have plans to do it in California, for example. Those ISPs will believe whatever fedex tells them without even considering that fedex may not have their best interests in mind. At some point when Fred S loses his paranoia of the union, he will see the benefits to having a team of higher paid drivers who really want to keep their jobs. When he learns that drivers who have been on a route 12 years as opposed to 2 or 3 are more productive, he'll have to do what he should have done 20 years ago. Where he got his fear of unions is not known by me.

That's just silly.