Classic Upper Management Fail

[bbsam]

Actually if I can get a solid 37-38 hrs a week I'll gladly let your guys do all the heavy lifting. I'm getting an apartment close to work, riding a bike everywhere, and generally kicking back. I've humped all these years with little to show for it so now going to take it easy. I'll do my best on the clock, knowing I'll have more time for myself. So go, go, go FedEx Ground!!! And thank you FedEx Express for taking it easy on me in my middle age! Thank you Netflix for cheap entertainment! Thank you Ridekick for making the biking easy! And thank you Jose Cuervo just 'cause!

In that case, if it's all the same to you, I will continue to gloat.

 

[bbsam]

Does anyone know what the real actual average salary of a FedEx Ground driver is? Do they get any kind of medical benefits? Paid vacation? What happens if a ground driver gets sick? Better yet, what happens if a Ground driver's kid gets sick? Who gets the bill? Do Ground drivers get overtime? What kind of top out time are we looking when compared to the all mighty UPS?

My drivers start out at 120/day, usually 9 to 10 hour days. These routes are fairly basic. 50 to 60 deliveries per day, 15 to 20 pickups on average. I have three drivers at this pay level. Second level is 150/day at about 100 combined pickup and delivery stops. Have three at this level. Third level is 160/day and these two guys are basically my "goto" guys. They know several routes and are willing to do whatever I ask to get the job done on any given day. I have one driver who is a former contractor that I pay 200/day. The first three levels are eligible for safety/performance bonuses ranging from 400/month for the first level to 200/month for the other two levels.

 

[Glorifiedpackmule]

Do you offer any kind of health insurance or retirement? Paid sick time?Paid vacations? I'm just curious for my own knowledge. No strings attached.

 

[bbsam]

Do you offer any kind of health insurance or retirement? Paid sick time?Paid vacations? I'm just curious for my own knowledge. No strings attached.

Workmans comp insurance and paid vacations only.

 

[MrFedEx]

You are speaking out of both sides of your mouth. You insist that Ground is a scam and that I am not a businessman and then you call me a mercenary. Guess what. It can't be both ways. And I wonder at what you really think. You say that Ground won't be able to handle the extra work load but you say I am about to make more money when Express shifts their business strategy. I may be off, but I think over the years you've developed a grudging respect for Ground. You may not like us, but you aren't nearly as certain of our ultimate failure as you would like to be.

You are a businessman at the whim of Mr. Smith. I've been around enough Ground employees to know who really runs the operation. And no, I'm not certain of Ground's failure, but I would be very surprised if there aren't another long series of lawsuits after the takeover. Mercenaries insert themselves into situations where they profit but don't really care about the messy consequences. I've said before that you seem to be a conscientious contractor, so your degree of culpability is much less than the ISP that flat rates his people at $450 per week. Ground is a scam because it pays less than what the job is worth, and because Smith has his dirty hands in it. Without all that political money changing hands, Ground would have never made it this far so fast.

I don't think Ground will handle the extra workload well, because it is asking more for the same money. Work harder for less? If Express still does E2 pickups and Ground delivers it, it probably will get done, just not as well in terms of service. Fred is never going to be content with paying 40% less if he can pay 41% less, and that will be his downfall. If you don't think Memphis and Pittsburgh want to apply Express-style management techniques and efficiency improvements to Ground, you're kidding yourself.

 

[westin]

What happens at the end of the year when these drivers realize that no taxes have been taken out or do you take taxes out? Or are they subcontractors of you- the subcontractor, who is responsible for his own tax deductions?

 

[Ricochet1a]

My drivers start out at 120/day, usually 9 to 10 hour days. These routes are fairly basic. 50 to 60 deliveries per day, 15 to 20 pickups on average. I have three drivers at this pay level. Second level is 150/day at about 100 combined pickup and delivery stops. Have three at this level. Third level is 160/day and these two guys are basically my "goto" guys. They know several routes and are willing to do whatever I ask to get the job done on any given day. I have one driver who is a former contractor that I pay 200/day. The first three levels are eligible for safety/performance bonuses ranging from 400/month for the first level to 200/month for the other two levels.

So...

"Level 1" - $600 a week and no health insurance, retirement plan. Works out to about $12/hr. Heath insurance for a family (somewhat equivalent to Express' plan, would cost about $8,000/yr, or roughly $150/wk. So to compare apples to apples (Ground to Express entry level Courier) - the Ground driver is netting $450/wk (after health insurance costs) and making about $9/hr for his work.

"Level 2" - $750 a week and no health insurance or retirement plan. Works out to about $13.60/hr (if it were paid as a wage with OT liability). After the cost of health insurance, falls to net of $600/wk or about $11/hr for his work with health insurance deducted.

"Level 3" - $800 a week and no insurance or retirement. Works out to about $14.50/hr (if it were paid as a wage with OT liability). After the cost of health insurance, falls to net of $650/wk or about $11.80/hr for his work with health insurance deducted.

I didn't even include the value of the Express PPP or 401k match. If these were to be "matched", the effective hourly rate for the drivers would fall by about $1/hr (giving them the benefit would require a deduction of about $50/week to keep the out-of-pocket cost for the contractor the same).

So...direct comparison of Ground driver to Express Courier, matching ALL apples to apples (doing all the adjustments so that a direct comparison can be made between the two based SOLELY off of wage rate)

Level 1 - $8/hr

Level 2 - $10/hr

Level 3 - $10.80/hr

The above allows a DIRECT comparison between effective Express compensation, to what a Ground driver makes - HAD the cost of the equivalent benfits been deducted from their pay.

You can see very clearly why the Ground business model is so profitable for FedEx.

 

[Ricochet1a]

If they have perfect "safety", then the "first level", would bring in just under an additional $100 a week. This pushes up their effective hourly rate up to about $10 for level 1, $11 for level 2 and $11.80 for level 3 (level 2 and 3 have a lower safety bonus).


That effective wage rate is LESS than a current Express handler in most areas.

 

[Ricochet1a]

To make another comparison, a UPS driver doing essentially the same work, is paid around $30/hr.

To put it in terms that one could compare Ground's "salary" to UPS compensation, a UPS driver would receive a "salary" of about $1500 to $1700 a WEEK (having to go out and purchase their own health insurance, and provide their own retirement plan).

BBsam's compensation is actually generous compared to some contractors out there. Many give their drivers $500 a week and that is it.

 

[westin]

The last time I checked we were over $31 an hour and with the August 1st raise it should be $32 or higher. Not rubbin it in but under $30 is not cuttin it!

 

[MrFedEx]

To make another comparison, a UPS driver doing essentially the same work, is paid just under $30/hr.

To put it in terms that one could compare Ground's "salary" to UPS compensation, a UPS driver would receive a "salary" of about $1500 to $1700 a WEEK (having to go out and purchase their own health insurance, and provide their own retirement plan).

BBsam's compensation is actually generous compared to some contractors out there. Many give their drivers $500 a week and that is it.

bbsam speaks like he's the norm, but he appears to be the exception to the rule. Even with such "generosity", FedEx is making a killing here. I wish Big Brown had snuffed Ground like a cigarette butt when they had the chance.

 

[Ricochet1a]

Changed it...

 

[Ricochet1a]

It's obvious to see why the Ground "scam" is done the way it is.

If the Ground drivers WERE employees of Ground, just how long do you think it would take them to organize - given the above disparity in compensation?

One wouldn't need to use a calendar to measure how long it would take them to organize, it would only need something between using a wrist watch and a stop watch...

 

[vantexan]

In that case, if it's all the same to you, I will continue to gloat.

Go for it! I just wish FedEx would offer a buyout to clear us out. I do find it ironic that you point out MFE wants it both ways when you criticize the Republicans being in bed with big business and yet your fortune rises and falls with one of the biggest, most ruthless corporations out there. But I'm totally sincere about you guys taking over. No matter how much we scream about it FedEx is going to do what they want. If I'm never going to do better then I'm for damn sure not going to kill myself for their benefit. So have at it, wish you well, I'm on cruise control.

 

[Glorifiedpackmule]

FedEx Ground and UPS offer a much closer comparison to each other than FedEx Express. Express is a different beast all together. Do Express employee's deserve to earn 33 dollars an hour for the work we do? No..probably not. Are most of us fairly compensated for what we do now and the crap we put up with? No. My question for FedEx contractors is.. How do you sleep at night knowing that your employees are being compensated somewhere in the neighborhood of 55,000 dollars less a year than the average UPS Driver for the same job?

 

[55+]

good question

 

[SmithBarney]

...How do you sleep at night knowing that your employees are being compensated somewhere in the neighborhood of 55,000 dollars less a year than the average UPS Driver for the same job?

Surely, they find it tough to sleep on that extra 30k stuffed under the mattress... nor do they care.. Fred says build your business like I
built mine...

 

[Ricochet1a]

... My question for FedEx contractors is.. How do you sleep at night knowing that your employees are being compensated somewhere in the neighborhood of 55,000 dollars less a year than the average UPS Driver for the same job?

I'm not a contractor (just want to make that clear), just a former Express Courier...

When I transferred out of AGFS to DGO (working as a Courier), I actually looked into getting into the Ground deal. I knew there wasn't any hope of a career at Express ("top out" was a bad joke, even for management or other salaried positions) I started doing my research, and found that the contractors were making a return on investment in the neighborhood of about 15 to 20 percent (damn good for any investment). A few were able to bring in a 25 to 30 percent annual return on investment.

However, pulling back the "cover" on the whole operation, the warts and all became self evident - there was a poster by the name of "Mom", that vividly illustrated some of the warts.

If one went into the "contractor" model and was willing to invest between $400,000 and $500,000 (5 to 7 routes), then one could look forward to a return of anywhere between $50,000 and $80,000 a year. If one was in an area that was expanding rapidly, that could easily reach $100,000/yr. One would have to take a minor role in managing the operation (making sure things were done, and getting all the necessary corporate paperwork done correctly), but it wasn't too much to handle (at this point in my research, I WASN'T looking to drive, just own and manage).

However, when looking at how compensation was set up for the "helpers" under the IC model, I almost threw up. If the drivers were to be paid what they were really worth, then there wouldn't be any reason to make the "investment" in the routes - one would be better off investing elsewhere and let a fund manager take care of the day to day work of managing the investment.

The whole set-up is reliant on paying the "helpers" (the actual drivers) below market level wages and with the contractor model, the drivers wouldn't have a chance to organize against their "operator". This is why it is a "scam", and I continue to use that term to this day. The whole INTENT of the independent contractor business model was ignored by FedEx, in setting up this system in order to get bargain basement labor rates to get the volume picked up and delivered.

I wouldn't have been able to sleep at night knowing what is going on (had I chosen to be a part of that system), so I made the decision to go ahead and knock out my Masters' degree and left Express once I found something I really wanted.

 

[HomeDelivery]

agree, after taxes, i'm at the level 1 - 2 area...

and i did a one-day comparison for the bad dispatch i had in the past pushing me to the limit of 14 work hours & it was about 1/2 of what a UPS driver gets in comparison.

some drivers admit to putting the lead foot down in some rural areas to get done sooner as well... I was tempted a few days to do the same just so i can go home at a decent time.

I was given a "dumbell route" that just doesn't make sense to the driver because of the unpaid travel time between 2 different service areas. Some days the distance was a reasonable 1/2 hour. A few crappy dispatch days were 1.5 hours apart!!! contractor wanted a minimum set of stops-per-car to at least have a minimum profit margin on running supplementals... but the driver gets the shaft for not even considering extra pay for being on the road a couple of hours longer.

 

[STFXG]

The market level wages are based on light truck/ package delivery. Not ups/express. You guys are way above the market average for the job being done. A comparison for ground drivers needs to be done for the entire market. And bbsams wages are within range of what is fair compensation for that job.

We sleep just fine at night knowing that our investments are providing a fair living for those working for us. (this obviously doesn't go for the bad contractors). But there are some who are fair.

And as far as not handling the additional packages... We just hire more drivers. No big deal. If needed rental trucks are pretty cheap for us. No different than every peak when we handle the huge boost in volume. It gets done.