Driver Annual Renewal - Financial Info

[It will be fine]

The only way I think it can be done profitably is bein 100% overlapped.

That's the answer for now. I'm just going to need to add another Monday route when the HD shows up. I was getting close anyway and I don't anticipate it being an entire day's worth of HD. I was telling a Fedex manager how it was going to be a pain. He asked, "Doesn't that depend on how much they give you in renegotiations?" I laughed at his naïveté and told him there's no way they are renegotiating for this.

 

[Cactus]

I don’t believe that but Fedex will operate like that until they can’t anymore .

Like when Fred won’t in a position to pay off any politicians in D.C.?

Could be interesting but the days of X getting everything they want will not last forever.

 

[bbsam]

Pretty sad commentary when some if not the majority of your mules have to work 70 hours a week just to earn what most people working in the industry earn working 40.In the cluster of small communities where I live word of these types of employment terms and demands travels quickly and explains why the contractors at my station have a hard time getting anybody to work for them. Not so much in the more heavily populated area where you are but it will in the end get around and eventually you'll begin to notice a reduction in the supply of Mexican Towmotors and two legged oxen you seem to take for granted.

Look. I’m just telling you how it is. I get it. You don’t like it. Not sure I like it.

Fedex doesn’t care what you or I think.

 

[bbsam]

Like when Fred won’t in a position to pay off any politicians in D.C.?

Could be interesting but the days of X getting everything they want will not last forever.

Corporations are people. Money is speech. Contracting can be heavily controlled by corporations.

 

[59 Dano]

It's just too bad that FedEx has stepped on a lot of "wanna-be" entrepreneurs along the way who didn't know any better. I watched many of them lose their $$ and their marriages.

The former contractors I've crossed paths with are former contractors because they had no business being in that line of work. Most were single route o/o's who bought a job. The others had scant business experience, even less money to work with, and weren't able to keep up with the changes.

To say that they were stepped on isn't as an accurate of a statement as "lots of people jump into this thinking that anyone can run a package delivery operation."

 

[59 Dano]

Running a real company? What do you know about that? With what little autonomy you once had having been stripped away what you are left with today are the combined duties of a working foreman and payroll clerk.

Drop us a line when you hire your first employee, Mr. Tycoon.

 

[59 Dano]

They'll continue to push it to see just how far they can push it, just like with Express.

Really? It's rare for a courier to be fired over performance. If he can't cut it, they either put him on an easier route or divert some of his stops to another route.

It's almost as rare for a manager to be fired. They usually get moved to another station if they're bad. Sometimes they are offered the opportunity to bid out of an ops manager position into any open hourly position; sometimes an hourly position will be created for them.

Express wasn't pushing anything.

 

[vantexan]

Really? It's rare for a courier to be fired over performance. If he can't cut it, they either put him on an easier route or divert some of his stops to another route.

It's almost as rare for a manager to be fired. They usually get moved to another station if they're bad. Sometimes they are offered the opportunity to bid out of an ops manager position into any open hourly position; sometimes an hourly position will be created for them.

Express wasn't pushing anything.

FedEx was pushing for quite a few years how little in compensation they could get away with paying us while paring away at our benefits. That's why I referenced that in regards to Ground driver compensation. As for firings unless especially heinous it takes 3 warning letters in a 12 month period to get fired. I've only seen one courier fired for 3 warning letters but a number for misconduct. Certainly a courier has to give it a real effort to lose his job. I've seen many more managers get fired, one I know of for three warning letters. Most for misconduct due to fraternising with employees if you know what I mean, but also abusive behavior and violating company shipping policies. Saw two managers fired on same day once as well as a senior manager who suddenly "retired" after 32 years with absolutely no fanfare. It was a small city and word got around that he had messed up the ROADS transition so badly, which he did, that the company could no longer overlook the other problems.[/QUOTE]

 

[Dvr Alan]

The former contractors I've crossed paths with are former contractors because they had no business being in that line of work. Most were single route o/o's who bought a job. The others had scant business experience, even less money to work with, and weren't able to keep up with the changes.

To say that they were stepped on isn't as an accurate of a statement as "lots of people jump into this thinking that anyone can run a package delivery operation."

I understand the point that there are many who weren't qualified, with experience etc., but when I have proof at my hub to the contrary, you can keep saying what you want and it won't hold water. I would counter that if low driver wages, substandard delivery vehicles and even worn driver uniforms are the norm....then being a success in business is not for me!

Also, some of the ones who are left in my hub have become "mechanics" or have other businesses on the side who are using their losses at their package delivery operation to shield taxes. To
some that IS smart business, but should that HAVE to be the case to run a package delivery service for FedEx?

 

[59 Dano]

I understand the point that there are many who weren't qualified, with experience etc., but when I have proof at my hub to the contrary, you can keep saying what you want and it won't hold water.

There are too many successful contractors out there for success to be a fluke.

 

[Oldfart]

FedEx was pushing for quite a few years how little in compensation they could get away with paying us while paring away at our benefits. That's why I referenced that in regards to Ground driver compensation. As for firings unless especially heinous it takes 3 warning letters in a 12 month period to get fired. I've only seen one courier fired for 3 warning letters but a number for misconduct. Certainly a courier has to give it a real effort to lose his job. I've seen many more managers get fired, one I know of for three warning letters. Most for misconduct due to fraternising with employees if you know what I mean, but also abusive behavior and violating company shipping policies. Saw two managers fired on same day once as well as a senior manager who suddenly "retired" after 32 years with absolutely no fanfare. It was a small city and word got around that he had messed up the ROADS transition so badly, which he did, that the company could no longer overlook the other problems.

Was that in 1988?

 

[bacha29]

Drop us a line when you hire your first employee, Mr. Tycoon.

You went to great lengths to make note of the fact that I never spent a day at Fedex Express.

BUT THESE REMARKS COME COURTESY OF AN INDIVIDUAL WHO NEVER SPENT A DAY IN THE EMPLOYMENT OF FEDEX GROUND AND NEVER ONCE AFFIXED HIS SIGNATURE TO AN RPS OR FEDEX GROUND SERVICE CONTRACT.

 

[bacha29]

There are too many successful contractors out there for success to be a fluke.

Do you have any numbers to back up your claim? I can tell you this much. During the time we 3 Day 1's were in operation 22 new contractors both single route and multi route came and left. Why? The usual issues. Unsustainable driver turnover. Contract revisions that took away revenue streams that once gone made the entire endeavor no longer worth doing. One went from route contractor immediately into UPS full time management Furthermore why are so many contractors on nationwide job boards crying for employee drivers? The answer is quite easy to find. Simply read the negative reviews from former contractor employees. Comments all pretty much the same. High demands, low pay, zero benefits. When someone gets a call to go to drive for Fedex Ground they immediately understandably believe that they will earn a family sustaining wage and at least average benefits. Then they find out that they are actually going to work for a powerless contractor for starvation wages zero benefits while still answering directly XG's every beckon call.
It doesn't take long for them to figure out that the existence of that contractor is why they are working for so little. Therefore if they are even willing to take the job no rational person is going to believe that they'll put forth a conscientious effort or harbor any concern whatsoever for the interests of the contractor. Sure, you can replace that person but more often or not you're going to get the same reaction from a person when you present him with the same set of conditions.

 

[vantexan]

Was that in 1988?

Well hey Skippy, good of you to weigh in!

 

[Cactus]

Express wasn't pushing anything.

Sure.

They love to try squeezing blood from turnips. Any courier that has decent route performance will be constantly required to keep doing more and more work and usually with less time since getting freight to the stations on time seems to be a lost art these days. God forbid if a courier should have a late.

Bottom line, it’s a huge safety issue.

 

[vantexan]

Sure.

They love to try squeezing blood from turnips. Any courier that has decent route performance will be constantly required to keep doing more and more work and usually with less time since getting freight to the stations on time seems to be a lost art these days. God forbid if a courier should have a late.

Bottom line, it’s a huge safety issue.

He said it was rare for a manager to get fired on another thread so I'd say he truly sits in an office somewhere without a clue as to what goes on out there. Pushing us to do more while paying less and less and stripping our benefits? Nah, never happened to hear him tell it.

 

[dmac1]

There are too many successful contractors out there for success to be a fluke.

You still bought a job, not a business. Your job is manager instead of driver at best. At it's most common, being an ISP or whatever today's term is, you might work part-time for minimal return on the total investment. At worst, you are still a driver, a part-time mechanic, a service scheduler, HR manager, etc.

Most of the ISP 'owners' claim a maybe 12% return on investment, but conveniently forget to pay themselves for the hours they put in. ROI is calculated after payment for all expenses including your own labor at market rate. Anything else is just lying to yourself to justify being in this 'business.'

If you are grossing $100k on a $400k purchase, but working 40 hours a week managing the enterprise, you aren't getting a 25% ROI. Managing 5-10 people(or more) working with payroll, working to maintain vehicles, even overseeing managers are all part of a job that would pay about $75k a year or more. Then you have the cost of money- what your investment could otherwise earn passively. Just simply investing in the stock market nets about 8%, and real estate is about the same. Earning $25k from the investment is around a 6% ROI.

Someone could easily take the same $400k, get a job with benefits maybe at UPS, invest the money, and come out ahead- except for the unskilled, who tend to be the supporters of this model.

 

[bbsam]

You still bought a job, not a business. Your job is manager instead of driver at best. At it's most common, being an ISP or whatever today's term is, you might work part-time for minimal return on the total investment. At worst, you are still a driver, a part-time mechanic, a service scheduler, HR manager, etc.

Most of the ISP 'owners' claim a maybe 12% return on investment, but conveniently forget to pay themselves for the hours they put in. ROI is calculated after payment for all expenses including your own labor at market rate. Anything else is just lying to yourself to justify being in this 'business.'

If you are grossing $100k on a $400k purchase, but working 40 hours a week managing the enterprise, you aren't getting a 25% ROI. Managing 5-10 people(or more) working with payroll, working to maintain vehicles, even overseeing managers are all part of a job that would pay about $75k a year or more. Then you have the cost of money- what your investment could otherwise earn passively. Just simply investing in the stock market nets about 8%, and real estate is about the same. Earning $25k from the investment is around a 6% ROI.

Someone could easily take the same $400k, get a job with benefits maybe at UPS, invest the money, and come out ahead- except for the unskilled, who tend to be the supporters of this model.

People talk themselves out of money all the time.

You just worked really hard at it.

 

[It will be fine]

You still bought a job, not a business. Your job is manager instead of driver at best. At it's most common, being an ISP or whatever today's term is, you might work part-time for minimal return on the total investment. At worst, you are still a driver, a part-time mechanic, a service scheduler, HR manager, etc.

Most of the ISP 'owners' claim a maybe 12% return on investment, but conveniently forget to pay themselves for the hours they put in. ROI is calculated after payment for all expenses including your own labor at market rate. Anything else is just lying to yourself to justify being in this 'business.'

If you are grossing $100k on a $400k purchase, but working 40 hours a week managing the enterprise, you aren't getting a 25% ROI. Managing 5-10 people(or more) working with payroll, working to maintain vehicles, even overseeing managers are all part of a job that would pay about $75k a year or more. Then you have the cost of money- what your investment could otherwise earn passively. Just simply investing in the stock market nets about 8%, and real estate is about the same. Earning $25k from the investment is around a 6% ROI.

Someone could easily take the same $400k, get a job with benefits maybe at UPS, invest the money, and come out ahead- except for the unskilled, who tend to be the supporters of this model.

Strange way of looking at it. I haven't invested my own money in my company. I've taken out loans, but the bank won't hand over a stack of cash for you to invest in the stock market. They will give you money to expand your business. That expanded business then pays down that loan. Now I hold a more valuable asset. A few decades ago I bought one truck, didn't have to buy the route. Money generated from my company has allowed me to expand considerably. I've never treated it as a passive investment, it's my company, I run it and pay myself. What's the ROI if you've invested nothing?

 

[bacha29]

Strange way of looking at it. I haven't invested my own money in my company. I've taken out loans, but the bank won't hand over a stack of cash for you to invest in the stock market. They will give you money to expand your business. That expanded business then pays down that loan. Now I hold a more valuable asset. A few decades ago I bought one truck, didn't have to buy the route. Money generated from my company has allowed me to expand considerably. I've never treated it as a passive investment, it's my company, I run it and pay myself. What's the ROI if you've invested nothing?

What do you mean banks won't lend you cash to invest in the stock market? What do you think trading on margin is? You say that you own a more valuable asset? Outside of the NADA book on your trucks there is no book on the intangible asset known as your contract. A couple of kids at the station wanted to buy out a multi route contract . I put up the down payment on the condition that they get the rest themselves. They went to the bank armed with the DP but not much else. The bank despite the DP in place would only lend based on the trucks book because it was the only tangible physical asset in play. They wouldn't lend them a dime for that so called contract. They might have had a chance with an SBA if there had been enough time to put one through but they only had a few days. Now in recent years there may have been a formal book made on XG contracts banks can loan off of but again it's an intangible asset.


This may help to explain why you see more contracts on the market with sellers requiring cash secured by the sellers personal assets. No SBA's or any other unsecured forms of borrowing.