We've got some news that's making waves in our circle. A new lawsuit has popped up concerning contractor status. It's stirring quite a bit of chatter, and we at eTruckBiz think it's crucial to chat about it, especially since it touches on the heart of our operations – the independent contractor model.
Topics: FedEx, ISP, FedEx Ground, Business, Contract, Negotiation, contractor, Financial, Network 2.0, Margins, fedex legal issues, low cost model, fedex ground contractors, fedex ground legal advice, fxg, fedex lawsuit, Spencer patton, Patton Logistics, CSP
Many CSPs are quickly moving into 2024 with cautious and measured optimism, mostly aware of the challenges that lie ahead. It will not surprise most that Network 2.0 is dominating the root causes of most of the concerns.
But with these challenges come large opportunities and solutions, so as forward looking teams leap into 2024, these are the things to prepare for and how to excel in the new year.
It has been a long time since economic conditions were favorable for a package rate war between UPS & FedEx.
In fact, because of generally good economic conditions, until a couple of years ago, there was little need for our two favorite competitors to try to steal each other’s business. A rising tide had been raising all boats, even including regional package carriers. Most indicators were signaling that there would never be another true price “war” like there was in the early 90’s, the early 2000’s or the period from 2008 - 2010.
Everything was stable in “pricing-land”...
Until it wasn’t.
Topics: FedEx, FedEx Ground, Business, Negotiation, contractor, Financial, Margins
Running a FedEx Ground contracting business has never been more challenging. As we navigate through the implementation of Network 2.0, contend with record inflation, and face labor market challenges, many CSPs find themselves pulled in various directions. The landscape is shifting, and margins are tighter than ever, making it essential to find a way to not just survive but thrive.
Topics: Driver Recruiting, Timekeeping, FedEx, Payroll, FedEx Ground, Business, DRO, vedr
Contracted Service Provider AO’s & BC’s wear multiple hats as they run their businesses. Their dedication to getting the job done leads to some of the most miraculous service levels in the industry. Even though CSPs are logistical experts, it doesn’t mean a few of their other responsibilities have the most efficient outcomes.
In fact, 77% of CSP AO’s & BC’s say they feel overwhelmed with the number of tasks they are required to handle, especially those that don’t have anything to do with making service happen.
If you feel this way, it is likely time to invest into an outsourced team of administrative specialists to help you with your admin responsibilities.
Many contractors are discovering that outsourcing administration not only makes good business sense, but it is giving them a big part of their life back as well.
This week, it was announced that all Canada Ground operations are going to eventually be converted to FedEx Express Canada over the next year and a half, as
part of the larger Network 2.0 operational transformation.
While we don’t know what the plans are exactly for the U.S. network, we can make some logical assumptions about what the move probably means and doesn’t mean for current CSPs.
Topics: Business Structure, FedEx, Ground, FedEx Ground, Business, Contract, contractor, linehaul, Network 2.0, transformation
This week, Contracted Service Providers will be introduced to the future.
(Project Drive?) is going to be unveiled to the masses.
What this means for CSPs is that business going forward is not going to be business as usual. Long-standing operating practices are all about to be changed, and with them, accepted CSP systems & processes will need to adapt, or get left behind.
A new type of operating awareness is about to rule the day. Those who embrace change will thrive.
At eTruckBiz, we've been anticipating and tracking these changes for a long time now. As a result, we have been developing a new application to make all of these changes easier for contractors. In our opinion, managing these metrics moving forward will be absolutely critical to success as a FedEx Contractor. With that in mind, we are introducing the Biz Status Tracker completely free.
Topics: Management, Business Metrics, FedEx Ground, Dashboard, Network 2.0, Real time, definite, Software, time
So your operation has been awarded Bronze, or Silver Trending Bronze Medal status. Should you be concerned?
If you're not, you should be. The majority of Bronze or Silver Trending Bronze-rated ISPs will need and want to shed this rating before the discussion is finalized to not offer a contract renewal.
As you embark on the journey to improve your status, it’s important to remember that Inbound Local Service is no longer, on its own, the best and most immediate way to ensure the happiness of your customer (FXG). The sooner Bronze rated ISPs get comfortable with and embrace a sense of urgency about ALL the metrics that make up their status, the sooner they can make meaningful changes that impact the situation.
Topics: Business Results, Business Metrics, Business, Contract, Agreement, Medal, Bronze
By now, most of us have seen or heard the news that FedEx is rolling out a new system for rating contractor performance.
Initial indications are that there will be three tiers (Gold, Silver & Bronze) and your operation will be classified as one tier or another based on several safety, service and customer experience metrics, on a monthly basis. Word out there is that some operating efficiency data will also be included, so productivity will be a part of this too.
It appears that the days of simply meeting contractually accepted service & safety performance standards to assure continued contracting participation are about to be gone.
So the question being asked is, what does this really mean for contractors?
Topics: Business Outlook, FedEx, Management, Business Metrics, FedEx Ground, Business, Dashboard
By any measure, it’s been, and continues to be, a challenging time to be running a transportation business. However, as we often see, there are many opportunities that present themselves during challenging times.
As we look ahead to better times in 2023, it’s important to take a look at where we are currently at and how we got here so that we avoid mistakes of the past.
Our current situation is rooted in the events of 2019. This period introduced the density-stop / ecommerce push from FedEx Ground. As ecommerce deliveries gained traction and increased in number, they fueled the deterioration of contractor per-stop operating margins.
As you know, ecommerce stops are paid at a lower rate and typically include fewer packages per stop vs. commercial stops, resulting in a stealthy revenue per stop decrease across your entire business.
Topics: Business Planning, Bookeeping, Management, Business Metrics, ISP, Business, Money, Cash flow, Inflation, Costs, Financial, Margins
Can anything good come from a grim FedEx earnings pre-announcement?
While the announcement and the withdrawal of next fiscal year’s guidance are ominous signs of storminess to come, there may be a silver lining. In recent months, eTruckBiz has seen a 70% increase in renegotiation requests for its clients being granted, signaling that FedEx may be more willing than ever to work with struggling contractors.
As many of you know from attending our many informational sessions over the years, the contractor model affords FedEx Ground the lowest cost provider of last mile transportation services in the industry.
It appears that now may be the time to unleash the power of this competitive advantage.
Topics: Business Results, ISP Negotiation, FedEx, FedEx Ground, Business, Contract, Negotiation, contractor, Profit, Agreement, consulting, settlement, Cash flow, recession, Rates
THE biggest thing on everyone's mind today is their company's financial health.
FXG measures it with the Financial Health Assessment, and it is top-of-mind as many must pay keen attention to fluctuating bank balances.
In response to hundreds of requests, and in light of the current crisis, we are happy to announce the launching of our suite of Financial Services designed to help you with this current situation and beyond.
There will be several more specific services coming, but the first and maybe currently most needed is eTruckBiz Capital.
So as you might imagine, there is a considerable amount of chatter out there about some recent, controversial events.
Many want to know what we think about the whole situation.
We’re going to give you some thoughts, but I’d like to point out our perspective on the matter first.
Topics: Law, Management, FedEx Ground, Business, Investment, Agreement, consulting, Money, settlement, renegotiation, Financial
Well, the time has finally come.
FedEx has officially announced the big move that we had known was coming for a long time.
The announcement that they will be combining most of the operating components of their networks will trigger significant operational changes. The plan does include utilizing mostly contractors, even though some are currently struggling.
Many will recall that we have been signaling for more than 5 years that a change was coming. By far the largest issue will be that the demands of the new network will force contractors who operate Lifestyle Businesses into operating Transportation Companies.
The time has come to put old habits behind and embrace change, or get left behind.
Topics: FedEx, Management, Ground, Business, Contract, model, Money, Cash flow, renegotiation, Network 2.0, transformation
How can one the most attractive elements of FXG contracting be the most detrimental to it as well?
Current economic conditions are uncovering some of the large stumps that have been covered by high tides for many years.
Business as usual used to consist of volume growth, turnover & recruiting challenges.
Volume growth meant revenue growth, and this growth usually meant a steady or rising checkbook balance that could be relied upon to make payroll and other bills. Revenue growth also covered up deteriorating productivity and dare we use the term “efficiency”.
Now, growth, at least until FDX unlocks more of the upcoming plan (which we'll be addressing in detail, stay tuned, much more to come on this), is now not there to keep the boat from hitting the stumps.