A Lump Of Coal For Fred S This Christmas

[Channahon]

There are many articles regarding the latest on FedEx issues with contract drivers not being classified as FedEx employees. I am not a fan of the IRS, but in another article, the IRS was involved with the FedEx model of using contractors for ground deliveries and approved of the model. However, with FedEx competing with UPS in service offerings, I believer FedEx crossed the line with co-employment issues.

[FONT=Arial, Helvetica, sans-serif]IRS Slams FedEx on Driver/Contractors[/FONT]
In the latest blow to FedEx Ground and its use of independent contractors for deliveries, the Internal Revenue Service weighed in on the same side as a recent court decision classifying drivers as employees.
Massachusetts fined FedEx Ground $190,000 on Dec. 19 for 'intentionally misclassifying' 13 pickup and delivery drivers as independent contractors rather than employees.

Now, the IRS is demanding $319 million in back taxes and penalties just for the year 2002 because of the same sort of classification all across the country. FedEx reported last week in an SEC filing that the IRS is auditing the driver/contractor issue for the years from 2004 through 2006 as well. Lawsuits filed in 36 U.S. states claim the control FedEx Ground exercises over its contractors makes them employees, with a right to benefits and a refund for buying their trucks.

The government decision was in line with the position of the Teamsters union in several court actions. Lawsuits filed in 36 states claim FedEx drivers are employees with the right to benefits and union representation. "It's game over for FedEx's independent contractor scam," union President Jim Hoffa said in a statement.

"Given the preliminary status of this matter, we cannot yet determine the amount or a reasonable range of potential loss," FedEx said in the filing. "However, we do not believe that any loss is probable," Fedex said, hinting that the controversy is far from over.

FedEx said it will vigorously defend its position.

 

[MrFedEx]

FedEx always claims it will "vigorously defend" itself, even when it's crystal clear that they will lose the case in question.They were going to "vigorously defend" themselves on the California Break Violations lawsuit and the Black/Latino Management Case and settled both out of court for huge money because they realized they would lose even more at trial. It's all part and parcel of the FedEx squeaky clean public relations campaign that is doled-out each and every time they are caught screwing over their employees or otherwise behaving badly. They will say the same thing with the upcoming Age Discrimination suit as well.

On a related subject, don't expect the Ground and Express divisions to merge operations any time soon. The latest angle on the Ground scam is offering incentives to drivers to become the managers of their own group of sub-contractor drivers, thereby avoiding paying any benefits and continuing to foist nearly all operating costs onto contractors, without creating any true employees.I've seen many ads in local papers and on-line advertising for such drivers. Apparently, the courts have bought-off on this garbage, which will allow FedEx Ground to pretty much operate as it always has. Ground and Express operations are entirely separate, including IT, which means Express drivers can't pick-up or deliver Ground items and vice-versa. Most FedEx locations aren't set-up for dual operations, and many are inadequate even for their original intended purpose. UPS centers are light years ahead of FedEx facilities...the hubs are pretty similar from what I've seen.

 

[Coldworld]

Yeah, they're so dumb. Why don't they just put them on the same truck and then make two or three separate stops out of them like we do all the time.

It seems dumb to ups folks, but you have to understand that the ground and home guys pay for their own: gas, insurance, uniforms, trucks, etc, etc. This is huge money that fedex doesnt have to pay. And we always joke with customers on how they have to wait for 2 or 3 fedex drivers to show up, and what time they are going to show up but it seems like most customers dont care, and the ones that do are already hardcore ups loyalists. Ups was all on the bandwagon about that SSI service last couple of years, but there hasnt been much talk of it the last year, seemed to kinda fizzle out. It would really be a good tactic to use to lure away volume from fedex, but only if it was used in a correct way.

 

[Coldworld]

Most FedEx locations aren't set-up for dual operations, and many are inadequate even for their original intended purpose. UPS centers are light years ahead of FedEx facilities...the hubs are pretty similar from what I've seen.[/QUOTE]

It seems as if many ups buildings are already outgrown before they were even done building them. For a company that looks into the future more than others, their Plant engineering dept does the opposite. Most buildings have outcroppings where there are trucks loaded outside the main building, you see this in buildings that are only 15-20 years old...not very good planning.

 

[Big Babooba]

I wonder if they intentionally do this to save on property taxes? Smaller building = less taxes.

 

[Engineer Person]

It seems dumb to ups folks, but you have to understand that the ground and home guys pay for their own: gas, insurance, uniforms, trucks, etc, etc. This is huge money that fedex doesnt have to pay. And we always joke with customers on how they have to wait for 2 or 3 fedex drivers to show up, and what time they are going to show up but it seems like most customers dont care, and the ones that do are already hardcore ups loyalists. Ups was all on the bandwagon about that SSI service last couple of years, but there hasnt been much talk of it the last year, seemed to kinda fizzle out. It would really be a good tactic to use to lure away volume from fedex, but only if it was used in a correct way.

My comment was designed to point out the irony of how we criticize FedEx for making multiple stops out of their different services and then we do the same thing. We have a clear competitive advantage and then we give it away by often making separate stops out of ground and air. We even have air drivers that aren't allowed to deliver ground packages so we force ourselves do the same thing that we mock FedEx for. Why don't we make one stop per customer and drop off the ground and air together? We could be kicking their butt if we'd let ourselves.

 

[grami72]

I believe air and ground are primarily kept seperate because the express drivers have historically been covered by the Railway Labor Act which makes it very difficult to unionize them. The entire "craft" would have to vote to become unionized, which means a nationwide election. Very difficult for the Teamsters to do, and they don't seem to want to. The ground drivers are covered by the National Labor Relations Act, where each location can have a seperate vote as to whether or not they want to join a union. That is why it is important for FDX to keep up the sham that they are independent contractors, not employees.

 

[MrFedEx]

Exactly!! The fact that FedEx Express has illegally been classified under the RLA has made unionization impossible. It's an all or nothing proposal, and in some places (right to work states, for example) employees think FedEx is a good deal. Fred S has been making political deals for years to keep the Express division RLA.

I just got my FedEx Portable Pension Plan statement of what I've accumulated so far under the plan and what the payout will be upon my retirement...WHAT A JOKE!!!

 

[pkg-king]

Fred will repay our effforts during Peak over the next few weeks, when volume drops off sharply. Split-shifts will probably be mandatory every day, and management will be pushed to try and force people to go home with below minimum guaranteed hours. It goes from 65 hrs a week and "God,we need you" to around 30-35 hrs a week and "GO AWAY,you're costing us money!!!". Routes will be collapsed, and the drivers that aren't sent home will have a miserable day trying to cover several routes by themselves. Couriers that insist on getting minimum hours will be badgered by managers for "not being team players". In other words, bend over, grab your ankles, and take one for the team...directly in your wallet.
Maybe you're right that most FedEx people are so pussified that they'll never stand-up for their rights...I hope not. With the softening economy and rising fuel prices FedEx upper management will be pushing harder than ever to pick our pockets clean. Perhaps it's finally gone far enough and labor will grow a set of balls and push back.
I'm assuming that your labor agreement forbids split-shifts and other such shenanigans at UPS.

I was talking to the Fedex Express driver on my route and he shares your same despare. He said this was the slowest peak he could remember and that starting in January they will be diverting their 2nd day express volume to the Fedex Ground trucks, further depleting their already declining volume. He feels they will continue to divert as much volume as possible to Ground because the cost of delivering packages through their ground fleet cost the company far less money. He feels there will be layoffs coming soon. Fedex needs a union...FAST.

 

[pkg-king]

Why doesn't fred dissolve the ground division and incorporate it into the express side of the operation and make the ft drivers do it all like we do? Its just dumb to have 2 fedex trucks delivering to the same addresses every day.As far as unionizing goes shop around.The ibt only uses your dues to benefit themselves .IMHO

Fedex would dissolve the Express division and put all the packages on the Ground trucks if they would do anything. There virtually is no overhead (truck payments and upkeep,employee benefits, fuel costs) for the company in the ground division. Alls they do is pay the driver per stop and per piece, that's their only expense, all the profit-draining expenses (truck costs, benefits, fuel, uniforms) are paid for by the driver. If the volume falls, they just pay the driver less money, while his expenses remain the same, he's the one who suffers. Fedex employees better wise up soon and consider a union, it is about to ugly, it will not continue to be business as usual at Fedex, things are going to change and the employee is going to take it on the chin.

 

[MrFedEx]

As far as I know, FedEx Express pkgs can't be diverted to FedEx Ground because the computer systems are not compatible. An Express driver cannot process a Ground package and vice-versa. That's not to say that they aren't trying to do it on a trial basis in some markets where they've been able to get around the IT incompatibility problem. Fred would do it if he could get away with it...then he'd be able to gut the Express division even more deeply than he already has.

I hear Fred's going to hire Karl Rove to be the new CEO and Dick Cheney to replace him as Chairman of the Board when he retires to his private island in year or two. Smith is a criminal, just like them.

 

[Coldworld]

I was talking to the Fedex Express driver on my route and he shares your same despare. He said this was the slowest peak he could remember and that starting in January they will be diverting their 2nd day express volume to the Fedex Ground trucks, further depleting their already declining volume. He feels they will continue to divert as much volume as possible to Ground because the cost of delivering packages through their ground fleet cost the company far less money. He feels there will be layoffs coming soon. Fedex needs a union...FAST.

Are you sure about this...Many of these ground guys are getting to businesses much later than ups...and with 2 day being a premium service, customers are going to get pissed!!As it is right now, express can get to many of our customers before us since they have letters and small parcels...they can get in and out while were throwing our backs out with the 50 piece bulkstop, 10 over 70's and lets not forget the "token" nda letter for the same stop. Fedex would be stupid for trying this...

 

[FedexExEmployee]

The employees of Fred have no pride; no self esteem. They do the same job as us for $5 an hour less. Fred treats them worse than UPS ever dreamed of, and they sit there and eat it.

They are whipped.

You are right on the mark.
Now, some people may be in a certain situation where they cannot leave for the moment.
For the most part though, Fedex employees have no back bone. They stay at a place where they are grossly mistreated and underappreciated. Then they cry about the job everyday.
It's almost never too late to make a change. I've never met a Fedex employee who regreted leaving. Never. Yes, I know many who did at my station alone, including myself.