to all the DUCKS - ISP/IC

[Exec32]

There is not much help in the contractor forum to help fellow contractors understand the IC to ISP transition. I understand that most of you are hesitant to respond because of the unenforceable, invalid non disclosure agreement that is intentionally vague as to get FEDEX desired outcome, contractors not helping one another against the beast.
This is text book corporate tactics to keep their leverage.
So here it goes....
IC = stop$ + package$ + Fuel surcharge + corezone + van availability + monthly bonus + Quarterly (multi) = revenue
From what I understand; all these are going away except stop$, Package$. Some are being replaced with,, Service fee, brand promo and another form of control using their bonus incentive...
The pitfalls are??????? don't say everything, I already know that...
They want us to determine how much it costs to do A STOP! (right?), This will be dependent on my DEFINED AREA.... to make a long story short how can one make a determination on cost if your area has not been determined or DEFINED, or you currently have an area(s) that would not be considered ideal for ISP. Does FEDEX swoop in and say here is the area we have decided is yours, by the way you don't have the historical data to determine an accurate cost to service, and just do it for what your doing it now, or less.
BRAND PROMOTION,,,,I want to negotiate this as a completely separate item in the contract. IT has nothing to do with my cost to service area!
Have any of you made the first offer!!!! It seems to me that fedex encourages you to allow them to make the first offer, not requires.. does this not put you in a compromised position to begin with? If you know your costs, and you know your acceptable range of profit why not make the first offer. In order for them to appear to be engaging in FAIR WILLING NEGOTIATIONS (contract law) they would have to at least make one counter.
lets start standing together, helping one another out, its not going to get better unless we communicate. I wish I could provide some of you with helpful information, however we are transitioning late.
Fedex plan is to look out only for their shareholders, smart,,how about we start doing the same!

 

[bacha29]

Spot on when you talk about areas that are not ideal ISP compatible areas. In my work area and this example is just one of many similar. The zip was a town of 5900 people out of a score of smaller towns. This town was according to X 26 "stem" miles from the terminal and that is what they based the core zone on. What they failed to recognize was the fact that every morning 8 rural mail carriers left the post office to go out and service that zips 480 mile R.D. carrier net work that used that same zip code. They never factored in the R.D.s. When I left the guy who took over the route had to add a supplemental plus a jumper because the guy he hired to succeed me refused to stay out until 9 PM or later every day and night. Now that my state is moving to ISP the guy who took over my route is going to have a very hard time getting the money out of X as will anybody who has a depressed rural area with tons of unpaved dirt roads to cover that can't be traversed at speeds above 20 MPH

 

[It will be fine]

They used to force us to make the first offer. They do not negotiate in good faith. They are not very interested in working towards an agreement. It's closer to take it or leave it.
It is a good idea to break down your current settlement to a per stop dollar figure. Then you can break down their offers to the same and compare how badly you're getting screwed. I break mine down to per stop payment and per piece payment. Keep in mind that these numbers will decrease through the length of your agreement as growth continues but your fixed compensation remains the same.

 

[bacha29]

You are a good man IWBF. Your service to that company makes the way you and others like you are being treated now a disgrace. My hope is that someday soon you will be able to sell for a profit large enough to give to chance to move onto something better. This way somebody else can deal with the aftermath of the collapse of the operation as a whole.

 

[Exec32]

I understand the variable revenue concept, per piece and per stop cost. What I want to avoid is the over reliance of fixed revenue. Seems to me those do not fairly compensate for growth and other costs.
Is it fair to say....., look it will take 8 trucks to cover an area, I will estimate full day work load at x amount of stops/packages, then base my offer on those averages. Keep your service fee and all bonuses, pay me on a per stop/package rate only.
I will charge x amount for branding outside other calculations, since this has nothing to do with service.
You know what I'm getting at, in other words eliminate as much control under FedEx as possible, and receive increased revenue based on your growth.

 

[It will be fine]

I understand the variable revenue concept, per piece and per stop cost. What I want to avoid is the over reliance of fixed revenue. Seems to me those do not fairly compensate for growth and other costs.
Is it fair to say....., look it will take 8 trucks to cover an area, I will estimate full day work load at x amount of stops/packages, then base my offer on those averages. Keep your service fee and all bonuses, pay me on a per stop/package rate only.
I will charge x amount for branding outside other calculations, since this has nothing to do with service.
You know what I'm getting at, in other words eliminate as much control under FedEx as possible, and receive increased revenue based on your growth.

You can say that, they won't listen. To make it easier on them and their management staff they keep everyone's agreement very similar. They would never allow one contract to be that different than the others. I would love to get only a piece rate, fuel surcharge and surge stop bonus for peak. They won't do it. They won't even entertain it. If you send them a proposal like that they won't counter and will send it back to you for revision. It's not good faith negotiating. They want the financial burden of additional resources to handle growth to come out of your pocket not theirs.

 

[Exec32]

What I described is exactly good faith negotiating. Backed up by data. I do understand your point that they want to keep all contracts similar, but that's because it's always been allowed by us. That's the tricky thing about this industry, what FedEx desires cannot be met without our concessions.
I know, it's a pipe dream,,,. or is it.
I have followed your comments closely, you seem to be an intelligent business man. Negotiate for you and your shareholders, not theirs....

 

[dmac1]

Fedex doesn't need to negotiate in most cases because they can almost always find someone who will do it cheaper. They know it, and they know you know it.

 

[bacha29]

Spot on guys. It's an attrition game. In the end the only course of action is to let the boxes sitting on the dock. I have heard stories about mass quitting at a terminal not that far from the one I was at. Using temps called in from a staffing agency, it took them 4 months to get things back to normal.

 

[Code 82 Approved]

Spot on guys. It's an attrition game. In the end the only course of action is to let the boxes sitting on the dock. I have heard stories about mass quitting at a terminal not that far from the one I was at. Using temps called in from a staffing agency, it took them 4 months to get things back to normal.

Really? Mass Quitting? Not route abandonment? My bad.. must be an Express thing.

 

[bacha29]

82 if you want to be the contrarian be my guest. On the other hand I choose to offer up as much information as I can uncover in the hope that it may serve them well going forward. What has happened is what I was afraid was going to happen. They get rid of the single route guys because they wouldn't put up with being cuffed around by that company leaving heavily leveraged multi routes backed into a corner with few if any clear options except but to just stand there and watch their equity disappear into the mist as Bounty mentioned earlier. I don't know what your objective is 82 but my objective is to leave no stone unturned in an effort to find these guys some effective recourse.

 

[12yearsaslave]

Best way to figure out what you are getting is: get your average weeks numbers (package, stop count) calculate what will you get in the new agreement. Figure out how much is in the incentives (every 4 weeks). See if you are close to what you get now. Negotiate.

 

[Exec32]

Fedex doesn't need to negotiate in most cases because they can almost always find someone who will do it cheaper. They know it, and they know you know it.

Not at my terminal. We have an absolute cluster#uck of areas that are so unproductive no one will touch them. Guys can't give them away, in fact the terminal has been running one area for almost 18 months,,,,no takers.
It takes a lot more $ to become an ISP, and the ones with it are wise enough to stay away. That just leaves the spinless snakes lurking at the terminal(most contractors) as their only resource. FedEx wants you to believe you are expendable, they have everything riding on a submissive contractor pool. PEOPLE CALL THEIR BLUFF.

 

[Bounty]

Not at my terminal. We have an absolute cluster#uck of areas that are so unproductive no one will touch them. Guys can't give them away, in fact the terminal has been running one area for almost 18 months,,,,no takers.
It takes a lot more $ to become an ISP, and the ones with it are wise enough to stay away. That just leaves the spinless snakes lurking at the terminal(most contractors) as their only resource. FedEx wants you to believe you are expendable, they have everything riding on a submissive contractor pool. PEOPLE CALL THEIR BLUFF.

My terminal was mostly single route owners, and my argument to these contractors back in the day was, why run a supplemental when you lose money on it? If we would of stuck together and not run these routes back then and force X to make them routes we would all be better off now. Problem was to many lizards in the terminal. The contractors would run the supps at a loss for a year or two hoping it would turn into a route because that's what the lying terminal manager kept telling them.Now, X has these guys right where they want them. Exec32 is right CALL THEIR BLUFF. The only power you have is if you stand together. However, I know the contractors won't. X knows that the contractors won't stand up for themselves. X knows they can write up anything they want in the contract and the contractors will sign it. The biggest joke of it all is some contractors actually think they are negotiating.(bbsam)[/QUOTE]

 

[Cactus]

The biggest joke of it all is some contractors actually think they are negotiating.(bbsam)

 

[bacha29]

Spot on Bounty. The earlier contracts did not require a SR contractors to deploy anything more than that one truck but when the terminal went over budget the company paid temps were shut down and the contractor had to run supps at huge losses despite the fact that the contract he signed made no such requirement. There it again it's all in the contract language the lack thereof and X's unwillingness to abide by it

 

[bbsam]

it. The biggest joke of it all is some contractors actually think they are negotiating.(bbsam)[/QUOT

Incorrect. If you read any of my instant messaging, you would know better.

 

[bbsam]

I think y'all should just wait for the inevitable ISP class action suits.

 

[It will be fine]

I think y'all should just wait for the inevitable ISP class action suits.

There's a lot of language in the agreement that will make those very unlikely.

 

[bbsam]

There's a lot of language in the agreement that will make those very unlikely.

Standard fare that has a lot of people believing it is illegal and unenforceable. My guess is that several attorneys firms that have feasted on this company in the past will be quite pleased to do it again.