FedEx contractor revolt?

[bacha29]

You keep talking about this as if it’s supposed to be a power struggle.

It’s not. It’s a sober analysis of a situation that is bad, getting worse, unsustainable, and should be of paramount interest to investors and customers.

If they do not address the model, it will implode. It’s not a threat. It’s just facts. If they are ok with it, then so be it.

You're right in the sense that it's not a power struggle because and I'm sure you know this contractors have no power or control over their fate as contractors. You guys all laughed when I said years ago that in the RPS/FXG "independent contractor" model the ONLY real independence is the opportunity to decide independently when to quit which for you guys should have been 3 years ago. Even for Spence Patton that's all he's got because his fate is also in the hands of somebody else.

And yes, the only effective solution to this impossible situation would be total system collapse allowing for the construction of a entirely new transportation network. Only this time done the right way.

 

[It will be fine]

You're right in the sense that it's not a power struggle because and I'm sure you know this contractors have no power or control over their fate as contractors. You guys all laughed when I said years ago that in the RPS/FXG "independent contractor" model the ONLY real independence is the opportunity to decide independently when to quit which for you guys should have been 3 years ago. Even for Spence Patton that's all he's got because his fate is also in the hands of somebody else.

And yes, the only effective solution to this impossible situation would be total system collapse allowing for the construction of a entirely new transportation network. Only this time done the right way.

Spencer actually has more data than FedEx does when it comes to the financial health of the contractors. He sells the routes, he follows the profitability. To continue that business he needs them to be valuable and profitable. For FedEx to keep getting boxes delivered they need the same thing. It’s not a power struggle.

The network is already struggling, he’s making the case that it’s getting worse. FedEx knows this, the question is how bad are they willing to let service get before adjusting.

 

[bacha29]

Spencer actually has more data than FedEx does when it comes to the financial health of the contractors. He sells the routes, he follows the profitability. To continue that business he needs them to be valuable and profitable. For FedEx to keep getting boxes delivered they need the same thing. It’s not a power struggle.

The network is already struggling, he’s making the case that it’s getting worse. FedEx knows this, the question is how bad are they willing to let service get before adjusting

It just another ,"yes sir, thank you sir, please sir, may I have another" situation. When you look at the entire global landscape, economic, geopolitical, environmental etc and all the fires in those sectors that Fat's and Raj have to go around putting out in defense of the company as a whole , when it comes to their top 10 list of worries a handful of sniveling Ground contractors would be doing good for themselves if they can come in tied for ninth .

 

[It will be fine]

It just another ,"yes sir, thank you sir, please sir, may I have another" situation. When you look at the entire global landscape, economic, geopolitical, environmental etc and all the fires in those sectors that Fat's and Raj have to go around putting out in defense of the company as a whole , when it comes to their top 10 list of worries a handful of sniveling Ground contractors would be doing good for themselves if they can come in tied for ninth .

I know we all say this often, but you really have no idea what you’re talking about.

 

[bacha29]

I know we all say this often, but you really have no idea what you’re talking about.

What I do know and you have often made the same admission in the past and that is that FXG contracting is a "take it or leave it " proposition . As you have admitted to so called negotiations involve the offer of a fixed amount of total dollars that the contractor can have deposited into whatever slot he wants but it's still only a fixed amount of total dollars.

As Patton plainly stated earlier requests for rate increases where soundly rejected . Now he's trying a higher profile more widely publicized approach. Do you really think that's going to produce the kind of change he wants? Holding a contractor convention taking over an entire hotel and convention center complex in one of the nation's wealthiest high roller cities....and then go poor mouthing to Fat's and Raj . I'm sure that's going to really scare them into seeing it Patton's way.

 

[yadig]

It’s making sense why they have been bringing lmo/p2 back to express.

 

[yadig]

I really hope you ground guys stick together. I promise you that FedEx doesn’t like contractors going on Bloomberg and telling them there is problems. There will be some tough times for you guys now. They will eliminate threats quickly!

 

[It will be fine]

I really hope you ground guys stick together. I promise you that FedEx doesn’t like contractors going on Bloomberg and telling them there is problems. There will be some tough times for you guys now. They will eliminate threats quickly!

They are running out of contingency teams. There are too many failures and open contracts to cover already. No one is taking free contracts, they aren’t going to pull more without a good reason. They have the choice to pay current contractors more or pay even higher rates to attract more contingency coverage.

 

[bacha29]

They are running out of contingency teams. There are too many failures and open contracts to cover already. No one is taking free contracts, they aren’t going to pull more without a good reason. They have the choice to pay current contractors more or pay even higher rates to attract more contingency coverage.

And you know as well as anyone that those open routes will be tied to future negotiations with the contractors remaining at a given terminal. .Any new deals will include open routes that are near to the contractors existing area. Sure, it's pure blackmail but what else are they going to do but eat it and smile?

 

[MAKAVELI]

They are running out of contingency teams. There are too many failures and open contracts to cover already. No one is taking free contracts, they aren’t going to pull more without a good reason. They have the choice to pay current contractors more or pay even higher rates to attract more contingency coverage.

It's really just one big poker game. The same type of poker is being played out at Express across the country. What would bring these corporate bags to their knees is if Ground and Express banded together and organized across the country.

 

[It will be fine]

And you know as well as anyone that those open routes will be tied to future negotiations with the contractors remaining at a given terminal. .Any new deals will include open routes that are near to the contractors existing area. Sure, it's pure blackmail but what else are they going to do but eat it and smile?

Wrong again. Thanks for playing. They have no interest in increasing contractor scale within a terminal. Most contractors are above the scale that FedEx wants.

 

[It will be fine]

It's really just one big poker game. The same type of poker is being played out at Express across the country. What would bring these corporate bags to their knees is if Ground and Express banded together and organized across the country.

It’s not even about bringing them to their knees. It’s about keeping the network operational at this point. It’s on the brink of collapse. Contractors need money yesterday or nothing moves.

 

[bbsam]

It just another ,"yes sir, thank you sir, please sir, may I have another" situation. When you look at the entire global landscape, economic, geopolitical, environmental etc and all the fires in those sectors that Fat's and Raj have to go around putting out in defense of the company as a whole , when it comes to their top 10 list of worries a handful of sniveling Ground contractors would be doing good for themselves if they can come in tied for ninth .

Not so. Ground has been the cash cow. With that structure failing, who wins? Raj? Contractors? Investors?

Nobody. It’s that simple. It’s why contractors basically shrug their shoulders at the company. OTC? Nobody cares. Going to terminate the contract? Ok. Mad because they’re out of uniform? I can send them home and we’ll try the route tomorrow. Only ran 92%? Keep bitching and I’ll show you 30% tomorrow.

So again, if you want to say that Raj has all the power, I ask you power to do what? Run the entire thing into the ground? Absolutely. At this point, contractors don’t care.

 

[bbsam]

And you know as well as anyone that those open routes will be tied to future negotiations with the contractors remaining at a given terminal. .Any new deals will include open routes that are near to the contractors existing area. Sure, it's pure blackmail but what else are they going to do but eat it and smile?

Incorrect. We have two CSAs wide open right now and one contractor beginning a third on Saturday. No existing contractor in the building has any interest in taking on the open areas. We’re almost to August with peak around the corner. And this isn’t an isolated incident and more will come.

FedEx built themselves a nightmare. They can solve it or it can fall apart. Eventually trucks sit because contractors can’t get drivers or afford fuel. FedEx can bitch about efficiency all they want and bow down to the altar of industrial engineering, but when the model collapses, none of that matters anymore.

 

[MAKAVELI]

It’s not even about bringing them to their knees. It’s about keeping the network operational at this point. It’s on the brink of collapse. Contractors need money yesterday or nothing moves.

Nothing moves temporarily. FedEx will call your bluff but if both OPCOs actually organized it would force FedEx to rethink their strategy. Think how the 97 UPS strike forced that company to essentially make those drivers the highest paid in the industry. You might have some bargaining power as contractors but ultimately FedEx has the power to fire you all and turn to an all employee model.

 

[bbsam]

Nothing moves temporarily. FedEx will call your bluff but if both OPCOs actually organized it would force FedEx to rethink their strategy. Think how the 97 UPS strike forced that company to essentially make those drivers the highest paid in the industry. You might have some bargaining power as contractors but ultimately FedEx has the power to fire you all and turn to an all employee model.

It isn’t a bluff. Nobody is trying to apply leverage. It’s simply the financial reality contractors are in. And i think contractors have moved beyond any fear of the company. Fire us? Ok. We’ll have to sell our trucks (if possible) and possibly file bankruptcy.

Here’s the rub. That’s all better than losing thousands of dollars per month with no end in sight.

 

[bbsam]

Wrong again. Thanks for playing. They have no interest in increasing contractor scale within a terminal. Most contractors are above the scale that FedEx wants.

Incidentally, part of the problem is that they’ve forced many contractors to scale down and now they have areas they can’t give away.

 

[MAKAVELI]

It isn’t a bluff. Nobody is trying to apply leverage. It’s simply the financial reality contractors are in. And i think contractors have moved beyond any fear of the company. Fire us? Ok. We’ll have to sell our trucks (if possible) and possibly file bankruptcy.

Here’s the rub. That’s all better than losing thousands of dollars per month with no end in sight.

The company has already decided to combine the OPCOs. It's only the decision of which model will be the ONE. FedEx has $billions to spend either way. Wether the contractors walk away or not, the company will continue on. I'm just saying the true bargaining power lies with Ground and Express organizing together.

 

[bbsam]

The company has already decided to combine the OPCOs. It's only the decision of which model will be the ONE. FedEx has $billions to spend either way. Wether the contractors walk away or not, the company will continue on. I'm just saying the true bargaining power lies with Ground and Express organizing together.

They may as well decide on the Express model then. They’ve definitely “lost the locker room” on the Ground side.

Good luck explaining that decision to investors.

 

[MAKAVELI]

They may as well decide on the Express model then. They’ve definitely “lost the locker room” on the Ground side.

Good luck explaining that decision to investors.

They've lost both locker rooms. The Express side is bleeding employees and service just the same. As far as investors goes, stability will be the most important factor in the near future. Raj is not Bezos and he needs to understand that to bring stability to the future of FedEx.