Truth on orange the new green end is comin

Discussion in 'FedEx Discussions' started by Exec32, Aug 25, 2016.

  1. Exec32

    Exec32 Member

    No express is not going to become contractors. The IC model will come to an end. Here are the reasons.
    We will all be Express!

    1. New technology has created demands from customers that the IC MODEL can not provide like the competitors.
    2. UPS is taken advantage of those technologies within there operations which are set up to adapt quickly
    3 X OPERATIONS are to fragmented to keep up.
    4 The IC MODEL has continued to lose its competitive advantage, based solely on cost savings. X is not able to adapt, losing customer confidence.
    5 of course the lawsuits will soon out weight any advantage left.
    6 Hillary will be president, legislation will pass, laws changed to address loop holes. Please this is not a political statement!!! This is an assessment that X has made.
    7 X needs you to believe that it will take 7-10 years to complete, leaving you complacent for now. Another lie.
    8 to many obstacles and impediments exist with the IC model, again reducing customer confidence.

    The IC model will continue for now to pass on as many expenses to the contractor as possible. What X really values is the equity we have built and continue to do.
    Before you disagree, ask yourself, can X compete with UPS on efficiencies while meeting more and more customer demands? They can not under the circumstances because we are to fragmented!
    X has at least a 25 year forecast. They did not do this just because customers were confused. It is somewhat branding, partially true not the whole truth. When the last time they told the whole truth!
    It makes sense. Never ending lawsuits, fewer options for customers, branding confusion, a fragmented delivery system, these have chipped away from fedex ability to compete. Cost savings alone have continued to decline. Changes on the horizon do not support increasing returns, under the same circumstances.
    Welcome to express 2020
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  2. bacha29

    bacha29 Well-Known Member

    Here is what you're missing Ground drivers are under Taft Hartley and can organize on a local by local basis. That is the reason why the work is farmed out to contractors. If a contractors employees as IWBF stated were to go union X would cancel or not renew the contractors agreement. When I started with RPS in 1992 it had 4% of the market .Today it's more like 30% of the market and is expected to have 51% of the market by 2020. Not able to compete you say? The numbers say otherwise. As for merging they have already started with the elimination of HD and it's merging with Ground. As Smith plainly stated in the last quarterly conference call Ground will run 6 days a week permanently and the move to 7 is on it's way All of this is clearly in preparation for Ground hauling air box sometime in the future It will be easy to know that change is on it's way if and when scanners that can scan both Ground and X boxes start showing up and as stated earlier Ground is handed the Xpress Saver and 3 day business. As for contractor equity, the model does not exist for the purpose of creating equity. It exists solely for the purpose of acquiring low cost trucking and labor. Profits create equity and after seeing what some IC and ISP operations were being sold for it became clear that contractors in the opinion of X were making too much money and so they have set out to correct the matte r through heavy downward pressure on settlements. Anything is possible is this highly fluid and rapidly evolving situation but ground grunts become X jocks I believe has to be paced near the bottom of likely outcomes.
  3. Purplepackage

    Purplepackage Well-Known Member

    No need to slam him immediately, we have one thread about the opposite outcome might as well let this one swell up as well
  4. Exec32

    Exec32 Member

    I understand your stance. I agree there are some major obstacles to my forecast, however the reasons I listed are not addressed by your assumptions.
    In other words I have witnessed first hand how the requirements from X continues to cross the line in order to create a more efficient delivery service. This is impossible when you are using hundreds of different entities, also the regulations and laws will change to make it increasingly difficult for X to get away with what they are doing. The loss of customer confidence is also paramount, because we can not compete with UPS well integrated system. Technology and the legal landscape are only 2 reasons out of many I believe they will transition to express. When I mention equity I of course mean the equity they capture for themselves from our hard work, I know I have no equity. It's ingenious, have us upgrade our fleets, change the brand, we service and sector the areas to create historical data for them to rely on, then get the contractors drivers at a discounted price because they are already living in poverty.
    Question is why didn't they change the ORANGE TO GREEN!
  5. dmac1

    dmac1 Active Member

    You've missed the point entirely. Ground drivers can do anything express drivers do now for lower costs. Lower costs create more equity for stockholders. Fedex doesn't care if employees/contractors have equity or not.

    Fedex has contractors as a buffer that insulates them from employee issues completely, and even when they lose a battle in court, they settle, meaning they get away with any legal issues raised.

    Can you honestly say that fedex employee drivers cost less than contractor employee drivers? Can you honestly say that having two terminals in an area- ground and express- is cheaper than just having one ground terminal with one manager, where the contractor is responsible for, but doesn't get paid for things like payroll, hiring, training, vehicle maintenance, cost of scanners, uniforms, etc, etc, etc. Why would fedex ever want more employees? If they merged ground into express, instead of the other way around, there are multitudes of costs they would need to absorb immediately.

    As long as fedex can settle with contractors over lawsuits instead of states filing the lawsuits to enforce employment issues, fedex will continue to try to expand use of the cash cow the contract model is. Yes- fedex will still need express package handlers and pilots to fly the express packages, but a driver working for a contractor can easily deliver and pick-up packages earmarked for express delivery.
  6. Exec32

    Exec32 Member

    Not a slam. Just disagree
    I never said it was cheaper. In fact X relies ON reduced cost alone as it's incentive to continue IC. I'm just made an observation that X knows that competing with UPS is becoming increasingly difficult with their model. I believe;
    1 the loss of customers
    2 inability to compete
    3 fragmented delivery system
    4 legal and regulatory landscape
    5 public pressure including congressional
    6 reduced returns
    Will give them no alternative.

    Have you noticed the size of the new terminals. All can absorb express volume under on roof.
    I never claimed I had equity, I merely stated that X will continue to build their own equity on our backs.
    I have not missed the point, you said we can do the same as express, this is not true, time constraints and priority demands create a situation that can not be contracted, however express on the other hand can do what we do, with a few asset changes with no problem.
    UPS does what I have explained.
    Another thing why didn't they go from ORANGE TO GREEN!
  7. dmac1

    dmac1 Active Member

    What exactly is it that you think express employee drivers do that contractor hired employees can't do??? Do you think contractors can't handle the technology???? A contractor can set time constraints on his employees, just like fedex does. A contractor may not like needing extra drivers to handle the time sensitive packages, but fedex doesn't really care what the contractors think. DHL handles time sensitive packages world wide, and they use contractors. Under the ISP system, the same rules don't apply to drivers as they did when each individual route driver was called a contractor. But today, the drivers are EMPLOYEES and can be told to do anything.
  8. BootsOnTarmac

    BootsOnTarmac Member

    Orange provided the money to buy red and green.

    MAKAVELI Well-Known Member

    Here's what you're missing FedEx freight is under Taft Harley as well. Why don't you ask them how well they're doing and eyes and campaign is going. It's just not that easy these days to organize especially against the master anti Union company that FedEx is.
  10. Fred's Myth

    Fred's Myth Active Member

    [QUOTE="Exec32, post: 2330252, member:
    I have not missed the point, you said we can do the same as express, this is not true, time constraints and priority demands create a situation that can not be contracted, however express on the other hand can do what we do, with a few asset changes with no problem.

    Another thing why didn't they go from ORANGE TO GREEN![/QUOTE]
    Ground has a "competitive" advantage over Express simply because they are not constrained by time-guaranteed delivery promises. If Ground were required to make multiple cycles through the same area, they would realize how inefficient that system is. Consolidating opcos while preserving time-commitments (demanded by our customers) is best served by Express. The economies of consolidation, combined with technologies that WORK, as well as CONTROL over the same as demanded by Memphis, point to Express being the future of the company, not Ground. IMO
  11. dmac1

    dmac1 Active Member

    Ground has a "competitive" advantage over Express simply because they are not constrained by time-guaranteed delivery promises. If Ground were required to make multiple cycles through the same area, they would realize how inefficient that system is. Consolidating opcos while preserving time-commitments (demanded by our customers) is best served by Express. The economies of consolidation, combined with technologies that WORK, as well as CONTROL over the same as demanded by Memphis, point to Express being the future of the company, not Ground. IMO[/QUOTE]
    Contractors will just hire drivers as needed, maybe even current express drivers, to meet those time constraints. There is nothing that prevents a contractor ISP from requiring timely service from his employee drivers. You seem to forget that ground drivers are all going to be employees of the contractor soon. It isn't like before when the contractors were the ones delivering the packages.
  12. Exec32

    Exec32 Member

    X already has a 70 page contract to hire my entity. It reads like an employee manual. After following all the demands and requirements in the contract there is no flexibility for me to use my METHODS AND MEANS to run my business. This is what they rely on to call you a contractor. Now throw in priority packages, and additional time constraints, also lets mix air and ground Frieght, at what point do you think that an already questionable contractor relationship becomes more sustainable in the eyes of regulatory and legal institutions. And by the way do you really think that things are going to get easier for X to continue with this scheme.
    So what do I think express drivers can do that ground can't? Well, the question is what can X do to express drivers that they can't do to contractors, and that is dictate the methods and means to their drivers, not able to dictate that to us, but to get their desired outcome they would have to write so much into the contract that it would definitely establish a employee relationship. Look what X wants as service, and the demand from customer expections, as well as protecting their brand and be competitive can not be contracted. Let me pick up my packages give them to my drivers, deliver them and come back the next day. If that was reality I would say it can be contracted, but that is not what it is.
    Its not about whether or not the ground driver can handle the technology, the problem is there one platform that can be used by the hundreds of different entities and real INDEPENDENCE still exists.
  13. It will be fine

    It will be fine Well-Known Member

    What are all these controls needed? I already have packages that have appointment times for delivery. Getting a bunch that have a before 10:30 delivery time is exactly the same.
    I don't think they'll eliminate Express, just trim it down some. There's no reason to pay the costs of express delivery for their low priority packages. They can continue to charge for 2 day and express saver and divert that volume to ground for a greater profit margin.
  14. bacha29

    bacha29 Well-Known Member

    WRong . When X bought RPS from Roadway in 1997 they DID NOT have the cash . That is why they had to give us stock rather than the cash. However after getting it's hands on RPS it the had the liquidity and margins needed to buy American Freightways along with Kinko's and a slew of others with nothing but good old American Cash.
  15. dmac1

    dmac1 Active Member

    One case I was personally involved in determined that drivers hired by contractors were in reality fedex employees, and another recently decided that fedex and the contractor were co-employers. But so far, fedex has avoided state enforcement by settling with those who make legal claims, As long as fedex is an employer in a state, it doesn't seem like state authorities are going to enforce the statutes, and instead periodically fine fedex, and the issue goes away. If not, fedex makes changes and delays the issue. I think that fedex can delay and stall and modify almost indefinitely and keep out from any legal order to force them to treat all drivers as employees.

    It took 15 years to get the first employee/contractor case settled, and the MDL attorneys I talked to said that the new model would be harder to fight because laws haven't been written for situations like this. As I have said, I believe that a fedex contractor is more like a franchisee who has a contract like a McDonalds franchise. So far, in most cases, a McDonalds franchisee can be required to conform and comply with company demands.

    As we learned in the IC model, just because fedex says you are a contractor in the contract doesn't make it true, and in the case of ICs, they turned out to be employees. IN the new ISP model, they may be called contractors in the contract, but in reality, they may be franchisees. Who really know until and if it goes to court.
  16. vantexan

    vantexan Well-Known Member

    Yes at some point the gov't is going to see a dodge around rules to keep a union out, especially a Democrat gov't. The risk of that happening is enough to scare away Fred. The one thing that's glaring to me about all of this is if it were doable FedEx would've already done it for the huge cost savings. They ARE doing everything they can up to the letter and spirit of the law, and apparently testing that and getting their hand slapped in court. This fuels speculation about what they MIGHT do, but until it happens it's all conjecture. The sky was falling on this forum in 2010, and it's still up there. We'll see.
  17. dmac1

    dmac1 Active Member

    Until fedex ground completes the ISP transition, they can't do it. That's why they haven't done it yet. But the ISP transition allows them to completely get out of the local pick-up and delivery service that drivers do.

    It isn't because it isn't profitable, but because the individual contractors couldn't be under that much control. Control of the drivers isn't nearly as big an issue with the ISP model because the factor of control is less of an issue. With each contractor having multiple employees, and some ability to bargain, instead of a standard contract, and the easier ability to buy and sell routes, it makes it less likely the ISP contractors would be found to be employees in court. The MDL attorney I spoke to said that they would not even likely want to be involved in that case.

    The ISP model is not as clear cut as the IC model turned out to be, and even that took 15 years in court to force fedex to change.

    Under the ISP model, contractors can easily be required to make timed stops and require their drivers to do so.

    And the sky did fall, to some degree. The individual IC who just wanted to drive one route and go home was forced to either quit or change. That bit of sky affected a lot of people.
  18. Exec32

    Exec32 Member

    What they require from you on appointment deliveries goes beyond what is able to be contracted. They only get away with it for now because no one has challenged it. What if you driver didn't start till 11am. This dictates how you run your route.
    You will get paid for it one day.
  19. 1314

    1314 Member

    I believe what exec32 is saying.
    Too many law suits
    Cant compete w the same advantage as ups. At my sta in cali they started buying isuzu reach now we got 5 new ones..
    The sprinters r being phased out at least down here new sprinters r being either replaced or parked in the back w the mechanic.
    Alot of my customers always tell me they prefer express over ups dhl and the beloved post office jaja..
  20. dmac1

    dmac1 Active Member

    The contractor can tell the driver to start earlier, or hire another driver. The contractor is not the driver under the ISP. Do you understand????