Ground non ISP

dmac1

Well-Known Member
You seem to think that there are a lot of people who can't figure out that a route isn't making any money. Suppose no one else wants it? I guess you can always cut pay even more.
 

Bounty

Well-Known Member
No. They will keep both. They won't not renew contracts for something like this. They don't care if people make stupid business decisions. They just aren't going to keep paying for it.
Or, what if X just ups the scale number to 1000 stops and does the same thing they did to get rid of singles.
 

FedGT

Well-Known Member
Or, what if X just ups the scale number to 1000 stops and does the same thing they did to get rid of singles.
What if they decide they do want to cut margins to 5% and turn everyone into employees. There are hundreds of millions of "what ifs". They aren't going to just like bb says they don't want to be in a position where someone walks away or screws up so bad that the terminal is screwed. They aren't going to even consider (note I said CONSIDER meaning I don't think it would happen anyways)changing anything with the model through 2020 where everyone is converted.
 

FedGT

Well-Known Member
You seem to think that there are a lot of people who can't figure out that a route isn't making any money. Suppose no one else wants it? I guess you can always cut pay even more.

Not true at all. Even if that were the case a 4 PSA contractor would take that route for nothing if they didn't have the finances to acquire or wanted to avoid the nightmare of merging.
 

Bounty

Well-Known Member
What if they decide they do want to cut margins to 5% and turn everyone into employees. There are hundreds of millions of "what ifs". They aren't going to just like bb says they don't want to be in a position where someone walks away or screws up so bad that the terminal is screwed. They aren't going to even consider (note I said CONSIDER meaning I don't think it would happen anyways)changing anything with the model through 2020 where everyone is converted.
Using the scale number of 1000 in my neck of the woods would not be a big percentage of the terminals volume and would eliminate the smaller contractors.
 

FedGT

Well-Known Member
Using the scale number of 1000 in my neck of the woods would not be a big percentage of the terminals volume and would eliminate the smaller contractors.
Could get out smaller contractors but that isn't their concern. A contractor with 5 employees will not try to make claims they are employees, they are invested in the business and the model. They want to get out the people that have no interest in that, have nothing to lose and want to sue FedEx to be employees.
 
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bbsam

Moderator
Staff member
You seem to think that there are a lot of people who can't figure out that a route isn't making any money. Suppose no one else wants it? I guess you can always cut pay even more.
I'm not talking about a route. I'm talking about sections of routes. I'm taking about both Ground and HD going into a town of 1100 for a total of 8 stops per day. And yes. A lot of contractors will do this year after year after year just because that's "how it's always been". Both routes make money. X is overpaying for the service to have two trucks doing it.

It will end up the same but with greater complexity in areas of greater density.
 

Bounty

Well-Known Member
Could get out smaller contractors but that isn't their concern. A contractor with 5 employees will not try to make claims they are employees, they are invested in the business and the model. They want to get out the people that have no interest in that, have nothing to lose and want to sue FedEx to be employees.
Less contractors is better for X to a certain degree. It will be what they want.
 

Crozz

Well-Known Member
Incorrect. Less contractors puts too much local power in the contractors' hands.
Fedex is increasing the contractor control. They don't want more contractors in a terminal they are learning less contractors the better. They are increasing the amount you can own case by case I know a contractor that has 53% of a terminal. What they are looking for is guys that can handle the volume and the headache.
 

bbsam

Moderator
Staff member
Fedex is increasing the contractor control. They don't want more contractors in a terminal they are learning less contractors the better. They are increasing the amount you can own case by case I know a contractor that has 53% of a terminal. What they are looking for is guys that can handle the volume and the headache.
I would bet serious dollars that they will reverse course on that but I'm glad to hear it. It's possible I may be more than doubling soon if that's really the case.
 

serco

Well-Known Member
I purchased a ground psa that covers hd and ground in 80% of the service area. The other 10% is 1 zipcode that is (very spread out) serviced by a HD contractor. I have begged him to take those stops away from me (giving them to him) tues, wed, thur, and,fri. He refuses, as he has always had a chip on his shoulder about me. Looking forward to x forcing him to consolidate that area. But they will no longer be free to him now. They now have value attached to receive what could have been free area to him. Im at scale and he is not. That chip may just grow some after this.
 

serco

Well-Known Member
There is a terminal in Wyoming that has 1 contractor. Not sure how many routes but more than 6. X will make exeptions if they need too.
 

FedGT

Well-Known Member
Fedex is increasing the contractor control. They don't want more contractors in a terminal they are learning less contractors the better. They are increasing the amount you can own case by case I know a contractor that has 53% of a terminal. What they are looking for is guys that can handle the volume and the headache.
That can be the case in certain terminals especially small ones but I still don't think they desire that. In Nevada a little over a year ago a contractor owned all of 2 small terminals and 1/2 of a 6 PSA terminal. I don't know all the ins and outs but essentially he walked away for months, the drivers finally had enough and walked out and FedEx was stuck looking for constant help from other states to bail out the terminal that had thousands of packages sitting for weeks. They had to find contractors for each terminal because they had no interest in someone potentially putting themselves in that spot again. Seeing what a complete disaster that was I don't believe they want contractors servicing substantial amounts in the termials.
I was trying to acquire all of them and they told me that can't happen for that exact reason so I didn't end up pursuing any of them.
 

serco

Well-Known Member
That was a disaster. I was a swing in another state and they begged me to come help out. Not a freaking chance was i getting involved it their mess.
 

bbsam

Moderator
Staff member
That can be the case in certain terminals especially small ones but I still don't think they desire that. In Nevada a little over a year ago a contractor owned all of 2 small terminals and 1/2 of a 6 PSA terminal. I don't know all the ins and outs but essentially he walked away for months, the drivers finally had enough and walked out and FedEx was stuck looking for constant help from other states to bail out the terminal that had thousands of packages sitting for weeks. They had to find contractors for each terminal because they had no interest in someone potentially putting themselves in that spot again. Seeing what a complete disaster that was I don't believe they want contractors servicing substantial amounts in the termials.
I was trying to acquire all of them and they told me that can't happen for that exact reason so I didn't end up pursuing any of them.
Exactly
 

FedGT

Well-Known Member
All in all if that happened I would be fine with it but just have a hard time believing that is the direction they actually will go.
 

FedGT

Well-Known Member
That was a disaster. I was a swing in another state and they begged me to come help out. Not a freaking chance was i getting involved it their mess.
Hahahaha!
They begged me for months too and finally after they told me the numbers they were willing to pay being so desperate I decided it was worth it after all. Was terrible actually going there and doing it but well worth it after the fact.
 
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