I agree. And nothing happens at the local level without it having been in some way cleared by legal.
My guess is that.somewhere along the way X tried.to terminate an Agreement based on poor service and it was shot down by legal.
Major ground failure in San Francisco.
- Thread starter gixxer squid
- Start date
My guess is that.somewhere along the way X tried.to terminate an Agreement based on poor service and it was shot down by legal.
CJinx
Well-Known Member
To be totally honest, I have not seen an agreement get terminated for poor service since I've been in an ISP state. I have participated in hundreds of BDs on the matter though. It is probably safer to let the agreement expire and just decline to renew with an entity that cannot or will not honor the agreement.
It will be fine
Well-Known Member
That's more in line with what I understand. If service goes below 97% for the year you lose your exclusive right to renegotiate and FedEx puts it up for bid. They don't cancel a current agreement, they just don't give you another one.
97% for a year?! My God! Do you know how hard it is to have such crappy service for a full year?!
Good point IWBF. So what it appears that staying above the 97% minimum will mean retaining extra help and vehicles in order to respond to volume spikes that can occur without any prior warning. So if you're an ISP the question will be can you get enough money out of X to cover the additional overhead? Very difficult for certain if not impossible. Clearly challenging days lay ahead for any ISP contractor which as we all know will someday be nationwide. Good luck guys and I mean that.
Ground has been in operation since 1985. The decision to raise the director retirement age was clearly spelled out in the summary of the last quarters operating results. As for the hedge fund comments. Bill Ackman the head of Pershing Capital released a staement through CNBC. plainly stating that his firm has no interest in X primarily due to the disconnect between Ground and Express.In addition an ISP/IC will always have a great relationship with the terminal management as long as he does exactly what managemant demands regardless of how far outside and beyond the terms of the contract those demands lie and the contractor is willing to lose limitless amounts of money for and indefinate period of time inorder to fulfill those demands all the while unfoolishly believing that he will be rewarded in the end.
You got it wrong. 97% is very easy to keep. That's 30 service failures per 1000 pieces every single day.
That's where gixxer is giving X more than they are paying for. He's giving them 2 and 3 levels of backup at probably $70 grand or more a year. Why? If a driver quits I have time to get things up and running. If I have a day with 300 service failures, that gets my CSA close to 85% and I can get away with that for a short period of time.
There's really no incentive for gixxer to have the extra coverage. He's giving his profits back to X.
UpstateNYUPSer(Ret)
Well-Known Member
How could you sleep at night knowing that you had 300 service failures that day?
No idea. Never been close...so why pay $70 g's a year to cover that which doesn't happen?
UpstateNYUPSer(Ret)
Well-Known Member
That wouldn't make sense either.
Cactus
Just telling it like it is
Ask Fred S. He has 30,000 a day.
MrFedEx
Engorged Member
OK, so what you're really saying is that for gixxersquid to survive he needs to provide crap service and just deal with the threats, as long as he stays above the magic 85% threshold.
That still doesn't solve the issue of hiring drivers in an area where an illegal at Home Depot can easily make $20 per hour or more under the table. I don't know if gixxer's terminal is in the San Francisco city limits, but if it is, then San Francisco minimum wage laws apply. I know there is a large Ground facility in Richmond, which is in Contra Costa County, but I'm not sure where Ground's other Bay Area terminals are located.
So, gixxer. Do a crappy job for your customers, tell your drivers to slow down, and then you'll prosper under the Fred S Plan. Oh, and don't forget to skimp on vehicle maintenance so you can be even more profitable.
No. As I've said, I've never come close to crappy 85%. Not only that, I'm rarely below 99.5%.
What I am saying is that Fred is not PAYING FOR THAT KIND OF COVERAGE. Why give it too him? In the event of a breakdown, time is on the ISP's side.
And if gixxer is over covering, scaling back on 1 or two drivers leaves more to go toward retaining the others.
MrFedEx
Engorged Member
OK, so he can pay more and retain his drivers. Makes sense. But he obviously isn't going to be able to run anywhere near your level of service.
Why not? I do it.
MrFedEx
Engorged Member
Uh, the Quad Cities and the Bay Area are just slightly different. Ever been out to SF?
It will be fine
Well-Known Member
Around here all the ISPs have backup guys. If one of us gets overwhelmed with multiple missing drivers we help each other out. You don't need to have enough guys for every scenario just enough for most. I know I'm short staffed this peak but FedEx didn't want to pay me enough to hire another guy. There will probably be some failures this year, it's not a big deal.
I'm not saying X pays fairly but I think gixxer could get away with trimming staff and understanding that ultimately the failure is on X and their stingy bean counters.
Cactus
Just telling it like it is
And don't forget the stingy CEO's who's butt the bean counters are kissing.
gixxer squid
Well-Known Member
Thanks for many great posts by many of you. I have spoken through back channels to many of you and have enjoyed the interaction.
I have a degree in business. I run two other businesses, thank god as I wouldn't survive on income from X with my lifestyle.
My profit margin on business A runs at 22% (net) only because I do not participate at all. (22 years and running)
Profit margin on business B which I run full time unless X steals me away is 30%(net), (12 years and running)
My two businesses above generate about half the total gross X generates but the profit margin is 4-6%
Maybe I am spoiled, but a business that generates over 800k in gross revenue IN MY MIND should generate a bare minimum of 10-12% profit margin, not 3-5%.
So one must ask ones self, where am I to increase the profits? I can't control insurance, I can't control gas as these are fixed/somewhat variable costs, maintenance there is not much control over. The only real control that we have at X is our employees, what we do or do not pay them? This is a tough job, the furniture and over sized boxes for our peanut pay delivered to high rises doesn't wash out. I have ethical standards as well as compassion for whats expected of our guys, I am not or will not ever try and screw them over for 50 bucks or 100 bucks a week for doing there job.
X asked me before ISP negotiations, "what is your cost of doing business, what does it cost you per stop." I figured my cost per stop with 15% profit margin was approximately $4.84 per stop. After doing all these detailed calculations with supporting spreadsheets for what we were asking, do you think that X ISP negotiator gave a chit, hell no, he disregarded everything. They told us thats what they wanted and when we actually had supporting documentation to support they did not even want to see it although we told him we had it. Folks, its NOT a negotiation. Its a take it or leave it and those that have serious money invested will take it ;-(((((((
As far as legal and contractor relations. Are they paid by us the contractor? If not, they don't represent us, plain and simple. They will always cover X ass. ALWAYS.
As far as failure percentages. Thats just not who I am or what my company is about. I am paid errrrr slaved to do a job and I will do it to the best of my ability while grumbling under my breath or ranting on this board. I am NOT a X hater to a certain degree.
What I want is adequate compensation to be able to pay my hardworking staff a decent living in the bay area and to pull a decent income on having to manage all crap X throws at my face.
Some really good dialogue by many without derailing. Kudos to you all.
I have a degree in business. I run two other businesses, thank god as I wouldn't survive on income from X with my lifestyle.
My profit margin on business A runs at 22% (net) only because I do not participate at all. (22 years and running)
Profit margin on business B which I run full time unless X steals me away is 30%(net), (12 years and running)
My two businesses above generate about half the total gross X generates but the profit margin is 4-6%
Maybe I am spoiled, but a business that generates over 800k in gross revenue IN MY MIND should generate a bare minimum of 10-12% profit margin, not 3-5%.
So one must ask ones self, where am I to increase the profits? I can't control insurance, I can't control gas as these are fixed/somewhat variable costs, maintenance there is not much control over. The only real control that we have at X is our employees, what we do or do not pay them? This is a tough job, the furniture and over sized boxes for our peanut pay delivered to high rises doesn't wash out. I have ethical standards as well as compassion for whats expected of our guys, I am not or will not ever try and screw them over for 50 bucks or 100 bucks a week for doing there job.
X asked me before ISP negotiations, "what is your cost of doing business, what does it cost you per stop." I figured my cost per stop with 15% profit margin was approximately $4.84 per stop. After doing all these detailed calculations with supporting spreadsheets for what we were asking, do you think that X ISP negotiator gave a chit, hell no, he disregarded everything. They told us thats what they wanted and when we actually had supporting documentation to support they did not even want to see it although we told him we had it. Folks, its NOT a negotiation. Its a take it or leave it and those that have serious money invested will take it ;-(((((((
As far as legal and contractor relations. Are they paid by us the contractor? If not, they don't represent us, plain and simple. They will always cover X ass. ALWAYS.
As far as failure percentages. Thats just not who I am or what my company is about. I am paid errrrr slaved to do a job and I will do it to the best of my ability while grumbling under my breath or ranting on this board. I am NOT a X hater to a certain degree.
What I want is adequate compensation to be able to pay my hardworking staff a decent living in the bay area and to pull a decent income on having to manage all crap X throws at my face.
Some really good dialogue by many without derailing. Kudos to you all.
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