Another new contract negotiation... Another really bad offer.

NYCFXG

Well-Known Member
It has gotten worse and worse. This latest negotiation I am working on is the worst I have ever encountered. They are offering close to 7% less than the value of the combined routes previous income. I have spoken with the contractor and tried to explain to him the importance of communication with the negotiator. It is just not working. X is dead set on offering as little as possible for their service. This looks like it is gonna be a bad year for contract negotiations.

This is now the second time in two months that I have seen X pay less for the same work. They seem to be completely content in letting contracts run out and rolling the dice. This is making things extremely dicey for current contractors looking to expand. It used to be worth the price of route purchases just to renegotiate your current contract. Now, it appears that ship has sailed.

Good luck out there.
 

bacha29

Well-Known Member
It has gotten worse and worse. This latest negotiation I am working on is the worst I have ever encountered. They are offering close to 7% less than the value of the combined routes previous income. I have spoken with the contractor and tried to explain to him the importance of communication with the negotiator. It is just not working. X is dead set on offering as little as possible for their service. This looks like it is gonna be a bad year for contract negotiations.

This is now the second time in two months that I have seen X pay less for the same work. They seem to be completely content in letting contracts run out and rolling the dice. This is making things extremely dicey for current contractors looking to expand. It used to be worth the price of route purchases just to renegotiate your current contract. Now, it appears that ship has sailed.

Good luck out there.
Leaves little doubt as to why they got rid of the single route contractor. Didn't have much money tied up it. Could simply walk out the door and call Bush to come get the truck. Now that the class actions have been settled and almost entirely under their terms it has clearly emboldened them . And there's nothing those contractors who remain especially those who are heavily leveraged can do about it.
 

It will be fine

Well-Known Member
It has gotten worse and worse. This latest negotiation I am working on is the worst I have ever encountered. They are offering close to 7% less than the value of the combined routes previous income. I have spoken with the contractor and tried to explain to him the importance of communication with the negotiator. It is just not working. X is dead set on offering as little as possible for their service. This looks like it is gonna be a bad year for contract negotiations.

This is now the second time in two months that I have seen X pay less for the same work. They seem to be completely content in letting contracts run out and rolling the dice. This is making things extremely dicey for current contractors looking to expand. It used to be worth the price of route purchases just to renegotiate your current contract. Now, it appears that ship has sailed.

Good luck out there.
I added more stops than I had on a contract and they refused to renegotiate. All I got was the stops and pieces. It hasn't worked out very well. Overlap is going make them so much money on the reduced contracts alone. Add in all the stops where 2 contractors used to service and it's just silly how much they are about to bank.
 

bacha29

Well-Known Member
I added more stops than I had on a contract and they refused to renegotiate. All I got was the stops and pieces. It hasn't worked out very well. Overlap is going make them so much money on the reduced contracts alone. Add in all the stops where 2 contractors used to service and it's just silly how much they are about to bank.
The sad reality facing those who remain is that their contract and routes will never be worth more than what they are right now.The questions going forward are do you try to keep going in the face of shrinking margins, hope for an improvement in contract terms that will stabilize margins, downsize by bundling together and try to sell less profitable routes or simply take the first complete buyout offer you can live with then tell that damn company to go pound salt ?
 

UpstateNYUPSer(Ret)

Well-Known Member
The sad reality facing those who remain is that their contract and routes will never be worth more than what they are right now.The questions going forward are do you try to keep going in the face of shrinking margins, hope for an improvement in contract terms that will stabilize margins, downsize by bundling together and try to sell less profitable routes or simply take the first complete buyout offer you can live with then tell that damn company to go pound salt ?

If you do choose to sell, are you required to disclose the reason(s) to potential buyers or is it caveat emptor (buyer beware)?
 

bacha29

Well-Known Member
If you do choose to sell, are you required to disclose the reason(s) to potential buyers or is it caveat emptor (buyer beware)?
In the case of an in house sale where the existing contractor buys out an adjoining contractor that contractor already has a pretty good idea as to how well the routes he's interested in are doing. Chances are he won't need a lot in the way of economic information. An outside prospective buyer will information wise strip it down to the bare walls. The thing to remember about this is that you're only as good as the strength of the economy in the area you serve In other words, if the revenue base of the guys in the metro areas are being dismantled piece by piece imagine what it's going to be like for the ones out in the depressed rural areas..
 

bacha29

Well-Known Member
Yes you’re looking at 6-7% below combined offers. Mine came in at that range.
Their ruthlessness knows no bounds and now that they've got you where they want you in a completely powerless position all you the contractor can do now is eat it and smile.
It was only under the threat of an Internal Revenue Lawsuit were you contractors grudgingly granted goodwill in the first place and when they saw some of the prices that guys were getting when they sold their routes they were both angry and embarrassed . In their mind's eye those contracts were not supposed to build value for the contractor but rather to serve a single purpose...... very low cost purchased transportation and now they've set out to get it even lower.
 

Cactus

Just telling it like it is
Deal with the devil.jpg
 
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