I'm looking at buying some routes.

Discussion in 'FedEx Discussions' started by OUMick, Jun 14, 2015.

  1. OUMick

    OUMick Member

    The routes are in a state where a lawsuit about IC drivers are employees. The law suit was consolidated with other lawsuits in Indiana. FEDEX lost the suit. They used a Kansas case to determine this. They sent it to the Kansas supreme court for a final verdict which it upheld in Oct 2014. So it looks like this state lost one of the labor lawsuits.

    My question is. What are the chances this will go to a ISP state? I don't want PSA's and then be converted to ISP after I buy. That sounds like a nightmare situation.

    My other question (like everyone else's). It is 5 ground 4 home delivery with one supplemental in each. Two managers in place. Both drive more to keep them doing something than necessity. They are showing a net of 350k. The drivers appear to paid less than what I've seen on here but they are a more rural area. Does this sound right?
     
  2. It will be fine

    It will be fine Well-Known Member

    The distinctions between IC and ISP are slowly disappearing so it probably won't make much difference in a few years. A net of 350 off 9 routes sounds high to me. Especially with 2 managers, how little are the drivers paid? Less than on here would be like $12k/year with the drivers on welfare.
     
  3. OUMick

    OUMick Member

    I messaged you. I hope you don't mind.
     
  4. STFXG

    STFXG Well-Known Member

    Sounds like fun.
     
  5. FedEx GT

    FedEx GT Active Member

    9 PSAs with 2 supplementals? If they are hitting max thresholds could possibly hit 350k I would think that is a little high as well. I have no experience with HD but from many contractors I have talked to the margins are nowhere near Ground so that I can not comment on all I have is hearsay information on that. HD growth is astronomical so it could work out but incase his maintenance costs are minuscule with 2 managers that may be tough to pull in on a year over year basis.
     
  6. Crozz

    Crozz Member

    No way $350k on nine routes and two sups. In the IC world two sups eat up two psa profits. Two managers lol do you research before you buy. Ground could bring 110k a year and HD brings 85k-95k a year with sups most likely they bring 50k a piece. If I was to look at the books he is grossing 1mill. Profits maybe 5% of gross revenue. If he didn't have two managers maybe 10%. Just my opinion.
     
  7. ex2fedex

    ex2fedex New Member

    Before you buy, know that you are paying for a business and buying equipment to service that business when in actuality the business has no guarantee of renewal at the end of your contract even if you provide excellent service. Not only that, terminal managers hand out OTC (opportunity to cure) letters like candy now for things like hours of service, or being shorthanded and running below a 98.5% local inbound for three days in a row, or even for paying for your scanners a day late. Six out of seven businesses in the building I was just in have gotten them. Whole buildings have gotten them. If you get one of those within the last 18 months of your contract you lose exclusive rights to negotiate and they can hand your contract over to anybody that puts in for it. I provided great service and they gave my contract to somebody else that wasn't even a functioning business in my state and wasn't ready to operate.
    Mysteriously this other business that didn't have any drivers yet calls one of my drivers the day after my contract ended and offered him a job. I'm still trying to figure out how they got his number but I got a pretty good idea. My two drivers that are there now are making $30 less per day for the same amount of work than they would be making for me while the new business owners who just acquire routes and hire managers live in another state sitting around in their million dollar homes. They get a route valued around 200k to 300k for nothing and provide lousy service because most of my drivers didn't switch over to them and they are short around 5 drivers, and I spend over a decade contracting with them providing excellent service, and keep enough drivers with low turnover and I walk away with a few high mileage delivery trucks.
    You only own the trucks. Here is a section of my contract that you might want to read before you finance into the six figures for a route and equipment.

    15.4 Extension of Expiration or Termination Date. The Parties acknowledge that this

    Agreement has no provision for renewal or automatic renewal and further acknowledge that there is no express or implied obligation upon either Party to enter into a subsequent agreement for the Services upon the expiration of this Agreement. However, if the Parties agree in writing, either the Expiration Date or the Termination Date of the Agreement may be extended in weekly increments one or more times not to exceed 52 weeks in total ("Extension Period") beyond the original Expiration Date or Termination Date. No oral agreement to extend this Agreement will be effective. The level of Charges at the Termination Date or Expiration Date will continue in effect through any Extension Period.
     
  8. It will be fine

    It will be fine Well-Known Member

    I think something is missing from this story. They don't just give away contracts for no reason.
     
  9. FedEx GT

    FedEx GT Active Member

    I would have to disagree with you. I don't know if you run IC right now or if you are ISP but they changed up the Sup pay a while ago. If you are running a sup that is hitting max thresholds you are making a fair bit of money with them. I have been running two for quite a while and I have never came anywhere close to losing money on them outside of possibly January.
     
  10. bbsam

    bbsam Moderator Staff Member

    Correct. They don't treat IC/ISP turnover nearly as casually as package handler turnover.
     
  11. Crozz

    Crozz Member

    FedEx GT you must be in the ISP part of fedex because the sup issue in IC is not fixed. thresholds are to high and even if you hit your $101 that's $505. With stops and packages your settlement is around $2200 if it was contracted your settlement is $2900-$3000 for two units that's an increase of $800-$900 a week and where not even talking about bonus money and quarterly pay. I have 18 psa and 4/5 sups running daily in two different terminals. I have 50/50 running intown and out of town routes.
     
  12. ex2fedex

    ex2fedex New Member

    What's missing from the story is the buildings senior manager has a personality disorder. I've heard this happens 10% of the time when you lose exclusivity and other people can put in for your area, but I know this senior manager, and I was pretty much expecting it from him. I went through the whole negotiations process and he told me he was going with the other business the day before my contract end date. The new business owners have thick pockets in the millions, so I don't know if money was exchanged. I can't rule that out. Supposedly they had a better looking RFI which is curious because they got a contract without having any drivers. Including myself I had 7 people and 7 trucks. Six weeks after this happened this other business who they gave three weeks to get going has their manager who doesn't always drive because he has to spend time recruiting, and two of my old drivers. So the only people they have picked up are people they put out of work, and they pay them less. The building has been running 8 or more temp routes for the last six weeks. All that and I'm 99% sure FedEx gave this new business MY employees personal information to help them out finding people, which violates section 10 of my agreement titled "Confidential Information". I'm investigating this because I had the phone number of their manager that called my driver. When I talked to him I asked him who gave him the phone number and he told me that Contractor Relations called him and said not to tell me anything. This violates another section of my agreement.

    18.4 Duty to Cooperate.
    Each Party will cooperate in good faith with the other Party in
    conducting investigations internal to their respective business operations, securing and giving evidence, responding to discovery, attending hearings and trials, and obtaining the attendance of witnesses at hearings, trials and meetings, and otherwise will cooperate in such matters.

    This is the same department that two weeks earlier told me they have a no retaliation policy and they're telling this guy to shut up and he's not even a FedEx employee. I later texted him and told him he could tell me who gave him the number or I could send a subpoena to his home address. He was a little surprised I knew where he lived because I had only had his first name, and he called his local police on me who I had a pleasant conversation with. Then he texted me and told me any further contact would have to be with his lawyer which I'm pretty sure is the company lawyer based on their location. That tells me that this business must have done something wrong here because why would they care if a FedEx employee accidently gave out personal information. They could have access to FedEx computers and do this regularly when they get somebody's contract, and I'm the first one to call them out on. I would call this collusion.
    As far as my performance goes, I've managed to keep enough people and cover Peak. I've received 104% of my local inbound bonus. I would get about 1.5 complaints per driver per year for the 4 years. I had one driver disqualification in 4 years for a deer related rollover. I had 1 preventable accident per year running about 5 routes per day. None of my drivers have even gotten pulled over for speeding. Nobody has gotten injured in any of my accidents. The senior manager has caught my drivers with one brake light out, and a couple of inoperable license plate lights which he will make a big deal out of. He's never caught a tire under spec in almost three years there. All this while paying my drivers about half of what they would make working for the competition. As far as this senior manager goes, he is universally hated for being who he is by almost everybody in the building.
     
  13. bbsam

    bbsam Moderator Staff Member

    Coerect me if I'm wrong, but you no longer have an Agreement with FDX and they can give out driver information to the new owner, can't they?
     
  14. FedEx GT

    FedEx GT Active Member

    I am still on contractor model, not an ISP. I don't in any way think the sup pay is on point or where it should be at all or contest you will be making substantially more if it were a PSA. I am just saying that I run 2 PSAs that each do roughly 200-220 delivery stops a day with roughly 40 pickups each that gross me somewhere around $4000 a week. Not too long ago I separated one out on an awarded PSA and each are doing about $1850 now.
    Obviously bonus is a killer on any sups so I am not bringing that into the equation just stating that sups can definitely be ran profitably if they are maxing out.
     
    Last edited: Jun 15, 2015
  15. ex2fedex

    ex2fedex New Member

    Not according to the lawyer I talked to, or anybody with business ethics. One of the biggest issues with FedEx is that you have to treat your drivers as your employees. FedEx makes them go on the computer and takes their information so they can approve them but that information is confidential. They can't go and swap contractors out and give out personal information from my employees to this incoming contractor. Just because the agreement is expired doesn't mean it is not an agreement. This is likely a violation of anti-trust laws, and based on how quick they put a stop to it and how they told this guy not to tell me anything, they know it. I'll let the arbitrator and the Pennsylvania Attorney General come to their own conclusions. Here is section 10 of the agreement.

    10. CONFIDENTIAL INFORMATION


    As used in this Agreement, "Confidential Information" will mean all information, in any form,
    furnished or made available directly or indirectly by one Party to the other that is either marked
    confidential or should reasonably be understood by the receiving Party to be confidential. The
    term Confidential Information will include any non-public information about the other Party, the
    other Party's business, the other Party's business prospects (including lists of current or potential customers), and any other non-public information provided to a Party by the other Party. Confidential Information does not include any information which a Party can demonstrate (1) was in the public domain or in the possession of the receiving Party at time of disclosure, (2) became part of the public domain after disclosure through no fault of the receiving Party, (3) was disclosed to the receiving Party by a third party that had a lawful right to disclose it, or (4) was independently developed by the receiving Party. Neither Party may use the Confidential
    Information of the other Party, except as required for the purposes of this Agreement, nor
    disclose the other Party's Confidential Information to a third party. Each Party shall use at least
    the same degree of care it uses to avoid unauthorized disclosure of its own information, but in
    any event at least reasonable care, to prevent disclosure to third parties. In the event of any
    disclosure of, loss of, or inability to account for any Confidential Information of the furnishing
    Party, the receiving Party will promptly notify the furnishing Party upon becoming aware of it and take such actions as may be necessary or reasonably requested by the furnishing Party to
    minimize the violation and any damage resulting from it. Each Party agrees to provide the other with prompt notice of any discovery request or subpoena seeking Confidential Information of the other Party, and in no event shall provide less than one week's notice prior to responding to the discovery request or subpoena.
     
  16. It will be fine

    It will be fine Well-Known Member

    I think the entire agreement is considered confidential, so you might want to stop posting excerpts from it. We all have it anyway.
    Also it is possible another driver at your station gave out the numbers since they knew their buddy was out of job when your contract got pulled.
    It's surprising you weren't given the option to match the deal they made with the new guys. They probably under bid you if negotiations were ongoing simultaneously.
    I know senior managers were routinely for sale in the early days, haven't heard as much about it recently though.
     
  17. bbsam

    bbsam Moderator Staff Member

    Actually, I don't think the Agreement is confidential except portions dealing with pay struckee between the two parties.
     
  18. ex2fedex

    ex2fedex New Member

    From what I was told by the senior manager, you submit the RFI, then go into negotiations for the term and financials, and then it goes back to him for final approval. He said he goes by the best RFI, and doesn't consider the financials. I don't know if he has access to them or not.
    I highly doubt if another driver or contractor gave his phone number out. This happened way too fast, and from what I hear nobody in the building was talking to anybody from this business. They aren't too happy with them. And why would FedEx tell this guy to keep his mouth shut unless they have something to hide? I wasn't born yesterday, I know something is up.
     
  19. bbsam

    bbsam Moderator Staff Member

    Very possible but it goes much higher than the SM. They don't have that kind of power unless he's got his "finger on the scale" and simply screwing you over for his own reasons.
     
  20. M I Indy

    M I Indy Member

    Why would they want to stop posting excerpts? This employee supervisor has already been fired! Yes, it is possible another driver gave info, it is also possible and more probable, that the manager has the personality disorder of an egomaniac, and no one is going to tell them anything. ex2 seems to have the spunk to question and not be pushed, unlike many of you. Therefore his independent thinking must be eradicated. That ex2 is located in PA, same state as Moon Twp., Ground HQ, is an ISP, or now ex ISP, has retained a lawyer, is awesome. You go ex2! I don't know who you have retained or talked to, I can put you in contact with some legals very well versed in Ex operations in the Quaker state. So far, they haven't lost, settlements are just that, an agreement with both sides satisfied. So if you need help getting satisfaction, pm me. This is exactly the sort of thing that will blow up the new improved ISP model, a maniac manager, or contractor that abuses one of their employees since a lot of them like to portray themselves as hooligans, eventually one will go to far.