The Business Of Independent Service Provider Contracting

Paying Drivers Daily or Hourly? (Part 2)

Posted by Gary Wade on Jan 9, 2022 10:15:00 AM

This post is the second in a two-part series.

In my last blog post, I shared that people often ask me, “Should I pay my drivers by the day or by the hour?”  My answer is based on comparing both methods, and I'll tell you why I recommend paying drivers by the hour.

Paying by the day is still most common because it’s a holdover from when delivery volume was consistent and only 5-days per work week.

As a result of adding residential service and e-commerce, package volume swings now vary widely on a daily basis. Paying drivers by the day has made business owner profitability more challenging.

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Topics: Business Structure, Payroll, Ground, FedEx Ground, overtime, leadership, Money

The Question That Never Goes Away: Paying Drivers Daily or Hourly

Posted by Gary Wade on Dec 19, 2021 2:53:48 PM

This post is the first in a series on choosing to pay drivers by the hour, or by the day.

Almost every week, another new Contractor will ask me an old question.  Should I pay my drivers hourly, or by the day? There’s truly one right answer, but complex dynamics cause many new CSP’s to believe that the old ways of paying drivers are acceptable.

Many new Contractors do not bring transportation industry experience with them. Although it’s likely they achieved significant success in their previous ventures. That success can lead to a variety of ways they address driver compensation.

New Contractors typically choose to either keep the same practices as the previous owner, or they make drastic changes. If they choose the latter, it’s because they recognize the existing compensation method is not financially feasible.

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Topics: Business Structure, Payroll, Ground, FedEx Ground, overtime, leadership, Money

9 Reasons To Invest In Management Training

Posted by Jeff Walczak on Nov 15, 2021 2:15:24 PM

As you may know, FXG Contractors and their Managers have chosen eTruckBiz University for in depth training for almost a decade. Since our very first class in Huntsville, Alabama, we have received a tremendous response from those who understand the importance of continuous education. Thousands of hours have been spent updating, refreshing, and tweaking our curriculum. Why? Because it's critical to our customers' success.

Training your team is the same as putting fueling in your trucks. Without regularly filling up the tank, your people are running on fumes. 

In fact, FXG requires continuous safety lessons, right? That's because statistics prove when training stops, people assume it's no longer important. Hitting your Service Levels requires fuel in the trucks. Staying compliant with your Agreement requires completed safety lesson. And making your business profitable requires essential, off-site training for your key people.

However, some AO's still want to know why this type of training is important, and, is there a return on this investment? That's a great question.

Well, here are 9 reasons why the question shouldn't be if I should send my managers to the University, but how soon can we attend?

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Topics: Business Structure, Business Tools, Management, Training, Investment

2021 Insights for Business Owners

Posted by Ben Weil on Jan 3, 2021 1:43:13 PM

We recently caught up with two guys heavily involved with building successful transportation companies to ask for their insights into 2021.

The first expert is a long-time CSP from the Midwest, Tracy Taylor. The second is the founder and CEO of eTruckBiz, Jeff Walczak. Both have spent the better part of their careers in the FedEx Ground arena. We engaged in a fast-paced conversation to produce our most recent Truck Talk podcast episode.

Some of the insights may surprise you.

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Topics: Business Structure, Business Tools, Business Planning, Training, Intelligence, Business Metrics, ISP, FedEx Ground, Business, Negotiation, Metrics, Profit, leadership, safety, coaching, Scheduling

The Most Important Goals for Your Transportation Company

Posted by Bob Tiell on Dec 13, 2020 4:00:00 PM

This week’s blog is the first in a two-part series of posts by Bob Tiell, an eTruckBiz Coach, who resides in Lexington, KY. His experience includes years of operational management at FedEx Ground.

Goal Setting - Business Plans and Safety

Even though we're in the middle of peak, it's time to start planning our next twelve months. If planned well with the right goals set at the beginning of the year, we can make peak 2021easier and more efficient for everyone involved. If you haven't already started thinking about your 2021 goals, perhaps you'll find some helpful direction and starting points in this brief blog post.

Let's start with the likelihood that your company has grown throughout the years, and you’ve probably added supplemental routes. They then became full routes (after FedEx Ground approval).

Plus, you've probably added more drivers and a BC, or two, over the years. What's next?

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Topics: Business Structure, Business Tools, Business Planning, Intelligence, Business Metrics, ISP, FedEx Ground, Business, Metrics, Profit, leadership, safety, coaching

eTruckBiz Just Got Better - Unveiling The New Platform

Posted by Jeff Walczak on Nov 15, 2020 1:22:11 PM

For more than 8 years, we’ve been building products & services to help CSP’s transform the way they approach running their businesses.

Recently, the FXG model itself has been transforming in unprecedented ways. For most CSP’s , the days of being a “hands-on” operator are gone, and the need to provide leadership & management through systems, processes and people are quickly being implemented. The days where you or your BC’s could “jump in a truck” to fix things are gone.

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Topics: Business Structure, Business Tools, Business Planning, Timekeeping, Bookeeping, Intelligence, Business Metrics, ISP, FedEx Ground, Business, Negotiation, model, Metrics, Profit, leadership, safety, coaching, Scheduling, Dynamic Route Optimization

Profitability Profile - Preston Wengert

Posted by Ben Weil on Feb 3, 2020 4:36:12 PM

HOW A COMMUNITY COLLEGE DROPOUT FOUND ENTREPRENEURIAL SUCCESS

You think your market conditions are tough, what about Colorado? According to the latest Bureau of Labor Statistics (BLS) data, the Denver area's average weekly wages are $1,242. Think it's easy to find drivers? The BLS also lists the area unemployment rate at 2.4%. Way lower than the U.S. average.

What made a young guy from out of town who knew nothing about the logistics industry think that he could buy a Ground business to support his growing family? Sure he's smart, but he's so young.

"There's no selling, no advertising, no collecting money from past due accounts. I'm not saying it's easy, but it beats a lot of other options out there," Preston Wengert says.

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Topics: Business Structure, Business Tools, Business Results, Management, ISP, FedEx Ground, contractor, Profit

Business Coaching Benefits CSP's

Posted by Ben Weil on Jan 19, 2020 2:43:03 PM

An Extra Set of Eyes

Dustin Franz bought an RPS route twenty years ago in Pasco, WA. Today, he's a successful FXG contractor with multiple routes. He's traveled an interesting path to profitability.

Buying a route was his first time owning a business. Much of how he learned to deliver packages came from his own experiences plus talking to contractors in his terminal.

Others taught him what they had learned from their own mistakes, and they really couldn't teach him how to be more profitable any faster. It was no fault of their own. They hadn't been trained themselves.

Dustin performed some online research and determined he needed outside assistance.

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Topics: Business Structure, Business Tools, Business Results, Management, ISP, FedEx Ground, contractor, Profit, coaching

Profitability Profile - Tracy Taylor

Posted by Ben Weil on Jan 6, 2020 1:15:00 PM


YOU CAN'T LET DRIVERS RUN YOUR BUSINESS

Business owners (CSP's) are generally likable. Drivers want to work for them. People enjoy being on their team. Nothing wrong with that. It's a good thing.

However, it's a problem when CSP's are too nice. Tracy Taylor learned that lesson early in his career as a Contractor. 

"I had 12 employees, 15 trucks and two operations hundreds of miles apart. My people needed me to make tough decisions instead of letting them manage themselves," he recalls.

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Topics: Business Structure, Business Tools, Business Results, Management, ISP, FedEx Ground, contractor, Profit

What If Someone Buys FDX?

Posted by Jeff Walczak on Jan 2, 2020 1:20:10 PM

Is FedEx about to be purchased?

The answer is probably not...maybe.

Truth is we'll never know for sure until it happens. But don't lose sleep over it because it's not under your control.

However, it's good business to think about and reasonably prepare for change. Focus on things you can control.

Let's take a look at what a sale of FDX might look like for CSP's.

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Topics: Business Structure, Business Outlook, FedEx, Ground, ISP, FedEx Ground, Business, Contract, Selling, contractor, Purchase

Profitability Profile - Steve Ellis

Posted by Ben Weil on Dec 8, 2019 10:15:44 AM


RETAINING EMPLOYEES IN TIGHT LABOR MARKETS

Steve Ellis has been a contractor for almost twenty years. Many business owners who've been operating that long think their processes work because they've "always done it this way."

However, Steve's openness to studying and changing his processes make his operations exceptionally successful in a state with some of the lowest unemployment rates in the country.

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Topics: Business Structure, Business Tools, Business Results, Management, ISP, FedEx Ground, contractor, Profit

Profitability Profile - Marena Markel

Posted by Ben Weil on Sep 2, 2019 1:07:00 PM


THE PERILS OF BUSINESS OWNERSHIP

Marena and Ralph Markel bought their first FedEx Ground route in 2005.

Of course, they were inexperienced owners, but they were committed to their future and each other. Like many couples who work together, each spouse brought different skills and strengths to the business.

After experiencing significant growth, the pair were overwhelmed by the responsibilities of leading a large team of commercial drivers including:

  • Scheduling
  • Payroll
  • Compliance
  • Training

Would the couple remain happily in business?

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Topics: Business Structure, Business Tools, Business Results, Management, ISP, FedEx Ground, contractor, Profit

Who Decides How Much You Earn?

Posted by Ben Weil on Jul 14, 2019 2:43:41 PM

It's a simple question with a simple answer. If you're a FedEx CSP, you may think - of course FedEx decides how much I'll earn because they decide what to pay for my services.

But it's not the right answer.

Focus instead on two key words, "decides" and "earn."

FedEx offers, or negotiates, estimated fixed and variable revenues, but they don't decide how much of that you'll keep.

You will make decisions during the course of the contract  determining how much you'll earn.

Don't confuse income with earnings.
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Topics: Business Structure, Business Outlook, FedEx, Training, Ground, FedEx Ground, Negotiation, Profit

Keeping Score and Making Money

Posted by Ben Weil on Jul 7, 2019 10:40:00 AM

Wayne Gretsky, Isiah Thomas, Magic Johnson, and Pete Rose. Each was phenomenally successful at scoring goals, points, or runs in their respective sports. Coaching others to do the same? Not so successful.

Bill Belichick, Pat Riley, Bobby Cox and Tony La Russa. Polar opposites to the previous four athletes.

"What's your point?" you ask.

Business people, like athletes, don't have to be great players to be great coaches and vice versa. However, great coaches can bring out the best in others.

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Topics: Business Structure, Business Outlook, FedEx, Training, Ground, FedEx Ground, Negotiation, Profit

3 Steps to Prepare for 7-Day Service

Posted by Ben Weil on Jun 16, 2019 9:00:00 AM

FedEx recently announced that seven-day service will be starting in 2020. This means big changes for FXG Contractors.

"Eight Days a Week" is a popular song written by Paul McCartney and John Lennon in the 1960's about love. According to McCartney, the title was inspired not by love, but by work.

He has been quoted as saying when he asked his chauffeur how he was doing, the chauffeur replied, "Oh working hard, working eight days a week." (Wikipedia, May 22, 2019).

You and your drivers probably feel the same about FedEx' recent announcement to move FXG to a seven-day work week.

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Topics: Business Structure, Business Outlook, ISP Negotiation, FedEx Ground, Negotiation

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