FedEx contractor revolt?

[bbsam]

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.

I don’t know Raj, but from what I’ve seen so far, this is way out of his league.

 

[MAKAVELI]

I don’t know Raj, but from what I’ve seen so far, this is way out of his league.

Yep, he bit off more than he can chew. But that's at the fault of Fred and the board. They put him in that position.

 

[yadig]

Yep, he bit off more than he can chew. But that's at the fault of Fred and the board. They put him in that position.

Fred saw this coming and he threw raj to the wolves.

 

[HedleyLamarr]

My money is on the contractor side winning out. FedEx needs them more then they need FedEx.
The real question is are the company executives too proud to admit this is the case. Will they let the company burn down before they admit to being beaten by a bunch of contractors?

 

[Cactus]

Fred saw this coming and he threw raj to the wolves.

No doubt about that.

The situation is already a shaky house of cards and a windstorm is brewing.

 

[It will be fine]

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.

There’s no bluff. The players are all folding and leaving the casino. The house can’t take a rake if nobody sits at the table.

I used to be able to survive some operating loses during the year and make up for it all during peak. Last peak they slashed our peak compensation which is what set off this chain of events. I think they’ll try to cut peak pay even more this year and that’ll be enough to sink many contractors.

 

[bbsam]

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!

Eliminate threats? They’re struggling to get contractors already. Are they going to eliminate another 20%? We’ve already had the tough times. The company has decisions to make.

 

[bacha29]

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.

Wrong again. You've been around long enough to know that when you're contract expires all past relationships end and it starts all over again with a clean sheet of paper and the presentation to you of a new set of non negotiable terms plus of few minor matters on the fringes for which they will adjust in a mutually agreeable manner.

 

[yadig]

Eliminate threats? They’re struggling to get contractors already. Are they going to eliminate another 20%? We’ve already had the tough times. The company has decisions to make.

What do you think the company should do immediately? I’ve been told for years “the company isn’t in business to make you rich”. Does contractors think FedEx was gonna make them ultra rich? We’re their expectations too high? I was thinking that the ground model was the future, I’m not so sure now.

 

[bacha29]

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.

If you want to know who would win in a go to the mat battle between contractors and Fat Freddy just walk and take a look at your trucks and see whose DOT numbers and copyrighted brand name is on the side of it and whose freight is going in it.

It will tell you everything when it comes to who will prevail in this little dustup.

 

[bbsam]

What do you think the company should do immediately? I’ve been told for years “the company isn’t in business to make you rich”. Does contractors think FedEx was gonna make them ultra rich? We’re their expectations too high? I was thinking that the ground model was the future, I’m not so sure now.

It’s in their best interest to make the contracts an attractive investment.

I used to think that contractors were easily replaced. They aren’t. The company (if they are paying attention) is figuring that out now.

 

[bbsam]

If you want to know who would win in a go to the mat battle between contractors and Fat Freddy just walk and take a look at your trucks and see whose DOT numbers and copyrighted brand name is on the side of it and whose freight is going in it.

It will tell you everything when it comes to who will prevail in this little dustup.

Again, you don’t get it. This isn’t a battle. It’s not a war. It’s not a contest. It’s business. If it’s not in Raj’s interest to increase compensation, the the model will fail and services will halt.

You tell me. If you were still a contractor losing money month after month after month, would you continue to do it? Would you in essence pay Raj for the opportunity to show up and deliver his ? That’s not realistic and it’s unsustainable.

If you had a contractor building a pool in your back yard and every day he showed up you required a $1200 entrance fee to access the back yard, do you think your pool would be built? Of course not.

It’s not a fight. Just businesses making business decisions.

 

[bacha29]

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.

Spot on. X has a plan already in place to respond to a contractor work stoppage. They'll bring in rental trucks, temps, trip leases managers to run P&D as well as call up list of people with prior experience and offer them premium pay to come back and help.

What is happening is that a growing number of contractors are finally waking up to the realization that they operate in a climate of servitude, have always operated in a climate of servitude but cast a blind eye to it as long as they were making good profits. But, now that that part of it is gone they've suddenly see the whole miserable mess in a completely different light.

Any service disruption on the part of contractors will last a day....two at the most as contractor employed drivers will threaten to quit and some will leaving contractors caught right in the middle with no choice but to do a Dano and go crawling back praying that Fat Freddy will take them back.

 

[bbsam]

Wrong again. You've been around long enough to know that when you're contract expires all past relationships end and it starts all over again with a clean sheet of paper and the presentation to you of a new set of non negotiable terms plus of few minor matters on the fringes for which they will adjust in a mutually agreeable manner.

Not really. Used to be that way. FedEx probably wishes it was that way.

It’s absolutely true that FedEx writes the Agreement 100% in their favor. The agreement means what they say it whenever they say.

In our building they used to deadline trucks if they had rust on the wheel rims. No. That is not an exaggeration. Do you think any contractor today would even attempt to get that route delivered today if they brought up something so petty today?

With worthless contracts come toothless agreements.

 

[bbsam]

Spot on. X has a plan already in place to respond to a contractor work stoppage. They'll bring in rental trucks, temps, trip leases managers to run P&D as well as call up list of people with prior experience and offer them premium pay to come back and help.

What is happening is that a growing number of contractors are finally waking up to the realization that they operate in a climate of servitude, have always operated in a climate of servitude but cast a blind eye to it as long as they were making good profits. But, now that that part of it is gone they've suddenly see the whole miserable mess in a completely different light.

Any service disruption on the part of contractors will last a day....two at the most as contractor employed drivers will threaten to quit and some will leaving contractors caught right in the middle with no choice but to do a Dano and go crawling back praying that Fat Freddy will take them back.

A plan to cover work stoppages? It’s called contingency. It costs the company billions per year. And they’ll run out and rent a bunch of trucks and throw who behind the steering wheel? And load them up with how many stops? And an already dismal safety record will get better?

If it were as easy as you portray, perhaps you’d still be there.

 

[bbsam]

Any service disruption on the part of contractors will last a day....two at the most as contractor employed drivers will threaten to quit and some will leaving contractors caught right in the middle with no choice but to do a Dano and go crawling back praying that Fat Freddy will take them back.

I don’t forsee anything like that happening. More likely contractors will simply sit on a portion of their routes on any given day. And it’ll change from day to day. Crappy rural routes will be the first to suffer. FedEx will do everything I. Their power to disguise the crappy service numbers but by peak they simply won’t be able to hide it.

 

[bacha29]

Again, you don’t get it. This isn’t a battle. It’s not a war. It’s not a contest. It’s business. If it’s not in Raj’s interest to increase compensation, the the model will fail and services will halt.

You tell me. If you were still a contractor losing money month after month after month, would you continue to do it? Would you in essence pay Raj for the opportunity to show up and deliver his ? That’s not realistic and it’s unsustainable.

If you had a contractor building a pool in your back yard and every day he showed up you required a $1200 entrance fee to access the back yard, do you think your pool would be built? Of course not.

It’s not a fight. Just businesses making business decisions.

This AM FDX is trading ABOVE both it's 50 day and 200 day moving average. Of 32 analysts who track FDX stock 23 of them have given it a "buy" or "strong buy" rating with an average target price of $290. Even the other 9 have given it a "hold" rating.

So what does that tell you? It tells you that a handful of contractors parking their trucks for a day or two will not have any meaningful impact on FXG operations. I told you guys 3 years ago not to hang around too long trying to get every last possible dime you can get for your routes but you wouldn't listen. So now it's either find somebody willing buy your routes for a "take it off your hands" price or soldier on until you simply run out of cash and the old woman is threatening to leave you if she hasn't already done so.

It most definitely will not get any better for you and getting even worse is almost guaranteed but you have nobody to blame but yourselves.

 

[bbsam]

This AM FDX is trading ABOVE both it's 50 day and 200 day moving average. Of 32 analysts who track FDX stock 23 of them have given it a "buy" or "strong buy" rating with an average target price of $290. Even the other 9 have given it a "hold" rating.

So what does that tell you? It tells you that a handful of contractors parking their trucks for a day or two will not have any meaningful impact on FXG operations. I told you guys 3 years ago not to hang around too long trying to get every last possible dime you can get for your routes but you wouldn't listen. So now it's either find somebody willing buy your routes for a "take it off your hands" price or soldier on until you simply run out of cash and the old woman is threatening to leave you if she hasn't already done so.

It most definitely will not get any better for you and getting even worse is almost guaranteed but you have nobody to blame but yourselves.

Stock price tells me that stockholders don’t pay attention to the company.

You know what’s strange? You seem to be the only upset one talking about this. I’m not trying to bring FedEx to their knees. Neither is IWBF. Neither is Spencer Patton. If it folds, it folds. Most should be in a position to get out without crippling debt.

 

[VigSaturn]

This could get interesting!

FedEx Contractor Revolt Intensifies With Calls for Pay Increase

FedEx Corp. is facing more pressure to raise pay for the small businesses that deliver a big portion of its packages, adding another hurdle to the logistic giant’s plans to boost profitability.

www.bloomberg.com

Good point.

 

[bacha29]

Stock price tells me that stockholders don’t pay attention to the company.

You know what’s strange? You seem to be the only upset one talking about this. I’m not trying to bring FedEx to their knees. Neither is IWBF. Neither is Spencer Patton. If it folds, it folds. Most should be in a position to get out without crippling debt.

I'm not upset. I feel bad about the fact that many of you passed up the opportunity to get out earlier and under the best possible terms. Many of you expected to be able to live fairly securely on the proceeds from your contract sale. Well, you still might but the principal upon whom the retirement income will be generated is likely to be quite a bit smaller.

In one sense the current situation should come as no surprise given the way Dan Sullivan fought bitterly in an effort to keep from having to grant goodwill and proprietary rights to contractors but grudgingly had to in the end or face the prospect of a DOJ/IRS lawsuit that could have permanently shutdown the entire operation bringing an abrupt end to his little scheme.