Discussion in 'FedEx Discussions' started by Exec32, Jul 5, 2016.

  1. Exec32

    Exec32 Member

    From what I hear you must know how much it cost for your company to do one stop to determine your negotiation range. FedEx has designed a process of negotiating on a premise that the STOP is the bases of evaluation. If this is the case then why does FedEx have so many clauses and addendums in the contract that have nothing to do with the act of doing a STOP.
    DETERMINING Your unit of labor is a more precise measurement of cost. This can capture all expenses in the performance of delivery. For me to compete within my industry and provide the level of service the contract demands, I will need to charge 36 dollars per unit hour of labor. This can capture items like HR, QUALITY CONTROLL, CUSTOMER SUPPORT, RETENTION, COURIER DELIVERY, ACCOUNTING, ADMINISTRATIVE, OVERTIME, any other currently uncompensated or undervalued services. This of course is based on volume, or what FedEx likes to call scale. If you determine units of labor it will also capture growth and resource utilization.
    MY POINT IS, I informed the TM, " the only thing I want from you is the right package on the right truck with the right address" and I will do the rest, thus creating a real independent relationship, however this will cost you more. The only remaining thing for me to become truly independent is to service more than just one customer, which is now just FEDEX. The viability of their model relies on this. Remove CONTROLL and pay for all services, (FedEx) be a "logistics" company only, and let me handle the delivery. GET IT!
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  2. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    I agree with everything except your last request. There is no way that FedEx will allow you to use your vehicles with their logo to deliver goods and/or services for anyone other than FedEx. You can do whatever you want with your non-FedEx branded vehicles but are severely limited as to what you can with their logo on the side of your truck.
  3. bacha29

    bacha29 Well-Known Member

    Thank you for the insight. Even at 36 bucks per hour you are giving X a real bargain. Out in the rural areas where stops are thin, road quality is very poor slowing down the SPH it needs to be more like 45-50. but your calculations are a good starting point but even getting 36 out of X will be tough given how they have so heavily over valued logistics and management and have completely devalued the physical movement of the box from point A to point B. Needless to say the result going forward will find contractors sandwiched between heavy downward pressure on settlements and a shrinking pool of labor willing to try to meet steadily increasing production and precision demands for the money offered. Perhaps that might explained the increased number of investor class owned operations that are already at scale coming on the market. It would appear that more and more of them are starting to realize that this is a headache they don't need.
  4. STFXG

    STFXG Well-Known Member

    (36*ManHours)/DailyStops = Stop Cost

    There ya go.
  5. Bounty

    Bounty Active Member

    The real equation is
    (X decides your costs = your compensation)
    It's not a real negotiation!
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  6. bacha29

    bacha29 Well-Known Member

    Indeed Bounty: They seem to have in place right from the outset a range of compensation that will be agreeable to them . If what you want doesn't land inside that range which doesn't appear to be a very wide one to begin with they will simply take your routes and offer them to the next guy who will do it for what they are comfortable with. It might explain the reason for the confidentiality agreement which by it's design prevented contractors from taking a unified stance against what appears to be a growing movement by X to force contractors to accept low ball offers in the future. Given all the at scale investor class owned routes going up for sale you and I may not be the only two people who have the same vision of what lies in store going forward.
  7. Bounty

    Bounty Active Member

    I have a feeling once the "negotiations" are completed in my neck of the woods there will be a lot of routes for sale.