A year ago, Chad Barnes was covering about 60% of his Contracted Service Area, losing half his drivers every month, and getting phone calls from the terminal every hour telling him to fix it. He had paid millions of dollars for the contract. He was, in his own words, ready to sell.
This week he joined our Weekly Business Update and told the story of what happened next.
The day before we talked, GoGo Drop delivered 716 of 717 time-definite packages on time. His operation has climbed from what he calls "a color below bronze" to the edge of gold. His margin is close to 20% and he's working toward 25%. And he had just returned from a two-week leadership trip to South Africa during which, by his account, the business ran better without him in the building.
I've reproduced the heart of our conversation below, lightly cleaned up for readability, with our own commentary between the questions. I asked Chad to be candid about what went wrong before it went right, and he was.
If you're a FedEx CSP who is struggling right now, or if you're about to buy a contract and think FedEx is going to show you how to run it, this one is for you.
Where he started
Jeff: Tell us a little bit about you and your company, and where you were when you got started.
Chad: I came in from the franchise system of a carpet cleaning company called ZeroRez. I was there for 20 years. I owned multiple locations, hundreds of employees, hundreds of vehicles on the road every day. I foolishly thought that FedEx was going to be similar. I was dealing with drivers and vehicles, but I wasn't dealing with FedEx.
I came into a broken business. We were covering about 60% of our CSA, with the terminal hounding me daily to hurry up and take back the whole area. I didn't have much of a team. We were way understaffed. I didn't have managers that knew how to manage. I was in for a ride.
My commentary: Pay attention to the background here, because it's the whole point. Chad is not an inexperienced operator. He ran hundreds of vehicles and hundreds of employees for two decades. He understood P&Ls, pro formas, and management. And he still walked into this business and got knocked flat.
That's not a knock on Chad. It's the pattern. We have heard a version of this story not once but hundreds of times. General business competence does not transfer cleanly into a FedEx contract, because the operating model is unlike anything else: seven days a week, Network 2.0 volume, a terminal relationship that can turn adversarial fast, and a cost structure where one bad dispatch can erase a day's margin. The people who get hurt worst are often the ones who come in most confident.
When he realized he needed help
Jeff: When did you realize this was more than you could handle on your own?
Chad: I knew I couldn't do it on my own no matter what. The question I had in the beginning was, who can help? Who has the character and the competency to actually lead me first so that I can lead my team?
It took roughly a month of my best efforts. I thought I had it buttoned up operationally. Then I looked back after a couple of months and realized my turnover rate was still 50% of my team almost every single month. That was after all the spiffs and the special programs and the gimmes and changing up their routes to make them happy. Still 50%.
I like to have a weekly leadership team meeting. That's a non-negotiable for me. In the first eight weeks of the business I had to cancel every single one because we were out on rescue missions. After we were failing miserably at all of it, I just threw my hands up and started asking questions.
My commentary: Two things stand out here. First, the leadership meeting. Chad knew what good management looked like, and the business wouldn't let him do it. When the owner is personally chasing missed pickups, the one thing that could fix the problem, structured leadership, is the first thing that gets cancelled. That's the trap. The fires consume the time you need to stop the fires.
Second, notice how long it took him to look for outside help: about a month of his best effort, then a couple of months of watching the numbers not move. That's actually fast. Most contractors we meet have been grinding for a year or more before they admit the approach isn't working. The cost of that delay is enormous, and I'll come back to it.
Turnover is the problem, recruiting is the Band-Aid
Jeff: Turnover is a hot topic right now. Most people think the way you solve turnover is to recruit harder. I'd argue turnover is the actual problem and recruiting is just a Band-Aid. Would you agree?
Chad: A thousand percent. Turnover happens for so many reasons, and life is going to happen to some of these drivers. But I believe 80% of your drivers will stay year over year if there's structure and some accountability. They thrive on it.
That's what I was missing. I would just keep catering to everything they needed. Once I put the data in front of my team, drivers and managers included, and said, "This is what we hold people accountable to," that's when the needle started to move. 50% turned into 40%.
We still have turnover. We're not immune. But now we're turning them over. We're not losing drivers for the heck of it. We're choosing who stays on the team.
Jeff: So does paying more, or coming up with the world's greatest bonus plan, reduce turnover?
Chad: I still want to be the one that pays the most, to attract as many good drivers as possible. But I pay a little bit more, not a ton more, and I also have higher standards than most. Drivers are attracted to it, and we hold them accountable to it. When they don't live by the standard, they're gone. It's pretty cut and dried.
They know how they get paid and they know why they get paid. We have weekly drawings and fun games to keep them engaged. But I'm not taking lots of money and saying, "If you go hit this one more pickup, I'll give you $20." That's just part of the job now. A year ago I was begging and pleading and negotiating with them every day to go do their job.
My commentary: This is the single most important thing in the interview, and I want it to land. Chad tried the spiffs. He tried the special deals, the route changes, the "Joe has to be off at 2:00 for softball" accommodations. Turnover stayed at 50%. Then he added structure and accountability, and turnover dropped. Not the other way around.
Here's the financial reality behind that. Every driver you lose costs you recruiting time, Qual Cert time, training time, and weeks of below-goal productivity while the replacement learns the route. At 50% monthly turnover on a 30-to-50 route operation, you are essentially rebuilding your workforce every two months. No pay rate fixes that. The only thing that fixes it is becoming a place where good drivers want to stay, and good drivers want to stay where the expectations are clear and consistently enforced.
The phrase Chad used, "we're choosing who stays," is what I call constructive turnover. It's a sign that you've gotten control of the operation. Involuntary turnover means the business is happening to you. Constructive turnover means you're running it.
Why nobody else could help him
Jeff: Did you try anything else before you reached out to us?
Chad: Like everybody else, I went fishing every day for the next best idea. I was trying to create my own pro formas. I was trying to create my own morning workflow, what was most important to pay attention to. I was trying to learn from other contractors, and I realized every contractor has their own agenda, their own goals, their own circumstances with the terminal.
And I was expecting the terminal to actually help me. No offense to FedEx, but they've said it in their own words: "We can't do your job for you. We can't tell you how to run your company." So if nobody can coach me, and I wasn't connecting with other contractors in a way that met my goals, I had to find somebody that could help me reach my objectives.
My commentary: If you're new to this business, or thinking about getting in, read that twice. Other contractors are good people, but they're running their own businesses and they're not going to run yours. And FedEx will tell you exactly what you need to produce, and hold you to it, but they will not tell you how. That's not a criticism. It's the structure of the contract. The "how" is entirely on you.
That gap, between what FedEx requires and what nobody teaches you, is the whole reason eTruckBiz exists. Hundreds of FedEx Service Providers have run into it. Chad just found it faster than most.
What the first weeks of help actually looked like
Jeff: I don't want to tell this part. I want you to tell everybody what happened when you engaged with us.
Chad: One thing I appreciated was that in the beginning you normalized my problems. That let me get out of my own head. I remember the comment: "We've seen this a thousand times. We've got the game plan to get you out. You just have to trust us." For me that was really hard, because it was my baby. I'd just paid millions of dollars for this contract. I thought I knew what I was doing.
What really happened was daily phone calls with Ken, Jeff, and the team. The most important thing was helping me create a priority list: what were the things I had to tackle first that would eliminate a lot of other problems down the road. You helped me understand we're playing a short game, but the long game matters more.
Those calls helped me understand what my easy number was, the number I had to hit each day so all those holes in my bucket weren't draining money out the back end. And I saw my bank account actually stop going backwards. It stabilized. That was in the first couple of weeks.
From day one I get an email from Ken every single day: "Here's how you did yesterday. Here are the ten things we discussed. You knocked it out of the park on pickups, but you weren't efficient on stops. Drivers one, two, and three didn't meet the objectives. Let's talk about that." Ken and Bob came out to Raleigh and were on the dock in the morning and in our weekly leadership meeting. When we got off track, they pulled us back.
Even now, after almost a year, there's an accountability partner. Sometimes it's not fun. But it's the right thing.
My commentary: I'll let Chad's description stand on its own, but I want to underline the sequence, because it's the sequence that works. Normalize the problem so the owner can think clearly. Build a priority list so the owner stops fighting every fire at once. Establish the one number that, if hit daily, protects the margin. Then review the operation every single day against that number and the handful of behaviors that drive it, and show up in person when it matters.
Chad also said something I didn't ask him to say: he and I have gone round and round on a few things. That's true. We've disagreed, and I've told him to go run his play and let's see what happens. An accountability partner who only agrees with you isn't one.
The BC evaluation that changed the management game
Jeff: Let's talk about the BC evaluations. What did they show you?
Chad: They showed me my BCs weren't structured during the day. They were reactionary to problems that were going to arise, even though we could have been out in front of them. Most of all, the BC evaluation showed me, the owner, that I was looking for the wrong character and the wrong competency in that position.
Once I found a BC who was actually executing the Xs and Os, a lot of the problems didn't disappear, but they became manageable. For me to hold somebody accountable to the things that mattered most changed the management game. And once the management game changed, so goes the ship.
Jeff: When you started, did you know the difference between a BC who was helping you and one who was hurting you?
Chad: No. I thought they were all helping, because there were mountains of packages left behind on the belt every morning. Running 30 to 50 routes a day, some stuff is going to be left behind, but I had mountains behind four or five trucks. Now we're looking at one or two packages on the belt a day.
In the first week I heard "we can green-sheet this" a hundred times. "We don't have to be there for that pickup." Now a hundred has gone down to two a day, based on real circumstances, not a CYA because we didn't have our stuff together.
My commentary: Here's a quick test for any owner reading this. Ask your BC how the morning went. If the first thing out of their mouth is "well, you don't have to do it that way, here's how we handle it," followed by a list of corners that get cut, you have a problem. BCs talk to each other, and what travels between them is usually the best recipe for the shortcut, not the best method.
The hard truth Chad landed on is that most BCs who underperform have good intentions. They're either self-taught or trained by someone who was self-taught. They don't know what to pay attention to that actually yields results. That isn't fixed by yelling at them. It's fixed by defining the job, measuring it daily, and, where needed, putting experienced guidance behind them. That's exactly what our BC Assist program is built to do.
It's what happens in the trucks
Jeff: When did it hit you that it's really about what happens in the trucks? You send a driver out and you're assuming they're doing the right thing. When did it land that you have to check on them, all the time?
Chad: It still hits every day. It's every day watching the VEDR events, every day monitoring their pace and stops per hour. The eTruckBiz team would ask, "Did you see the driver do this?" and I'd say no, I was busy. "Do you have a manager watching these every day?" In the beginning the answer was no.
Once we started, it turned into training, training, and more training. Drivers had good intentions. They just didn't know the best practices. It was the blind leading the blind.
The camera footage has been instrumental, because it's not debatable. You can't dispute someone not wearing a seatbelt or blowing through a stop sign. It's awkward in the moment to say, "You have to shape up or you're out, because if you don't, I lose my contract." But those videos are not debatable.
My commentary: This is the blocking and tackling of our business. Everything you care about, service, safety, productivity, margin, is produced inside a truck by one person you can't see for ten hours a day. Either you have a system for knowing what's happening in there or you're hoping.
VEDR footage is the most underused asset most contractors own. Chad went from not looking at it to building his morning meetings, weekly meetings, and one-on-ones around it. The conversations got shorter and more productive because the evidence does the arguing.
Learning to actually make money
Jeff: Did you think you understood the financial side before you got started?
Chad: Of course I thought I knew. I'd looked at other contractors' P&Ls and pro formas. They were insightful, but they weren't aligned with my goals. Then the eTruckBiz team put an actual budget in front of me: this is what the structure should look like, these are the ranges each major expense category needs to live in. Once that was in place I could put data on paper and see where we were failing.
We came up with a number: if we hit it and don't have any major blowups, we make money. That started at 94 stops per dispatch. We're averaging about 102 right now. My big, hairy, audacious goal is 140. If we get to 110 or 115, I know we hit 25% margin. We're close to 20% now.
People think it's just going to happen for them. It doesn't. The goal board was the biggest aha moment for me. That's how I ran my businesses before, with a P&L and a pro forma. But if the number isn't up every day in front of the managers, it's a guessing game. They work extremely hard. Without the information, it's a shot in the wind.
My commentary: Let me be precise about this, because it's the piece people most often get wrong. In the interview Chad mentioned some rough percentage ranges for driver pay, maintenance, and fuel. Those are generalizations, useful for orientation and nothing more. The real work is the Standard Budget, Expense Plan, and ezNumber development exercise we do with every client. That exercise produces targets built on your CSA's specific characteristics: your stop density, your stem miles, your vehicle mix, your contract terms. That is the entire point of it. A generic percentage will get you by. A tailored plan tells you exactly where you're leaking money and what to do about it.
The 94 Chad mentioned is his ezNumber: the average stops per dispatch his operation has to hit so the Expense Plan produces the owner's benefit. The P&L does not have an easy number on it. Most BCs will never read a P&L. But every BC can understand "we need 94 today," and when you give them that number, they start producing the financial result the business needs without ever opening a spreadsheet.
Chad told a story that illustrates this perfectly. His manager comes to him about once a week and says, "I could only get 110 stops on each truck today. Am I failing?" The answer is no; that's the progression we need. But think about what's happening: a manager who used to green-sheet a hundred packages a week is now worried that 110 stops per dispatch isn't good enough. FedEx tells your people the service number every day. Nobody tells them the financial number. The ezNumber is how you do it.
Keeping admin in-house, and what it cost him
Jeff: You kept a lot of your admin in-house. How did that go?
Chad: I brought over Jen, who ran my accounting and admin for 20 years at ZeroRez. She's meticulous. But she didn't know what to go after. We had to relearn a seven-day-a-week 2.0 business. She was giving me numbers we thought were right, and they were close, but not enough to be successful. Enough to get by day to day and keep the bank account flat.
I thought hiring somebody smart was going to change my world. We tried that a couple of times. It cost me money, because the bank account still didn't change. At some point it dawned on me: I could have two fewer people on staff and one remote resource that I don't pay payroll taxes on, that isn't a liability on the road, and that can give me actual data from hundreds of other contractors to align to.
My commentary: I'm not going to pretend our help is free. It isn't. But the comparison isn't "eTruckBiz versus nothing." It's "eTruckBiz versus the mistakes you'll make without it." Chad hired smart people twice and watched the bank account stay flat. That's expensive. A good administrator who doesn't know what to measure in this business will give you numbers that are close, and close is how you stay in bronze.
Bronze versus almost gold
Jeff: Is it easier to run the business as a bronze medalist, or as almost gold?
Chad: I had a knife in my gut for six months. The terminal saying "fix it, fix it, fix it" every day, every hour. "Are you going to go get that pickup?" The threat of losing the contract, contingency programs you'll have to pay for. Now we don't get any of those calls, which frees my mind to actually work on the business and figure out the next problem before it hits.
I was giving my full effort, and it was sucking life from my family and my physical health. I was ready to sell if I didn't see progression in the next couple of weeks. Then things started to shift. I just took a two-week trip to South Africa and the business did awesome while I was gone.
And it's funny how, as you get better, the terminal wants to help you more. And more good drivers want to show up and work for a team that's winning.
My commentary: This is the thing I most struggle to get across to contractors who are in the middle of it. When you're bronze, it is nearly impossible to imagine not being bronze. You get beaten up every day and you start to think that's just what the job is. It isn't. Chad went from a knife in his gut to a two-week trip overseas in roughly a year, and he did it with the same contract and largely the same area.
He also surfaced something I want every owner to hear: the question isn't gold or profit. He's balancing both, close to 20% on the bottom line and tipping gold. You can do both. In fact, the same structure produces both, because the terminal stops consuming your day, good drivers start finding you, and your management team finally has time to manage.
The $200 TV
Jeff: Explain the board in that picture.
Chad: Monday, Wednesday, Friday we pull out a big TV and gather everybody. Fifteen minutes max. A safety topic, then what we're working on, usually from ride-alongs: wrong package placement, wrong position. Then we put up the rankings.
The drivers flock to that TV. Are they winning or losing? They stand around it for 20 or 30 minutes studying it. We have the good guys and the guys who are struggling teach some of those meetings. What works, what doesn't. It all stems from the data on that board.
We have a weekly drawing for drivers who hit the standard, AirPods or something. A monthly grand prize worth a couple hundred bucks. But in the beginning, we had no rewards and no discipline. We just put it up to see how they'd react. That was almost a year ago, right before peak.
And that board brings up more issues than anywhere else. A driver says, "I had nothing left on my truck yesterday," and now I can go to the terminal with ammo: "My guy got dinged for coding these two packages and they were legitimate." They know we're tracking it. I'm not on my heels with them anymore.
My commentary: A couple hundred dollars for a TV on a stand. That might be the highest-ROI investment in the entire interview. Drivers want a scoreboard. They want to know if they're winning. Give them one and they'll coach each other, and you'll find out about problems from the floor before you hear about them from the terminal.
What Chad would tell you to do right now
Jeff: Somebody out there is watching this and wondering what you'd tell them to do.
Chad: Every business and every person is different. So, I'd ask: do you know what your goals are? If you do, do you know how to get there? If you don't, there's a team. Not just eTruckBiz, but a group of contractors on this forum working through the same issues, and it all funnels back so the information comes back out to us.
You still have to make the decisions. You still have to execute and hold people accountable. It doesn't make that easier. It makes it easier because you know the data and you've got a team that will hold you accountable first, then teach you how to lead a team for success each day.
It's been a ride. It hasn't been easy. But I don't know anybody better, even now after a year of looking, who's going to give me information I can put on the ground today.
Putting It Together: What Chad's Turnaround Teaches
If you only read one section, read this one. These are the principles that moved GoGo Drop from below bronze to tipping gold.
- Structure beats spiffs. Chad's turnover stayed at 50% through every incentive he tried and fell only when he added clear standards and daily accountability. If you're solving turnover with recruiting, you're treating the symptom.
- Find your ezNumber and put it in front of everyone. The P&L doesn't tell your BC what to do today. One number does. Build it from your own Standard Budget and Expense Plan, not from someone else's percentages, and display it every day.
- Evaluate your BCs against the job, not their intentions. Mountains on the belt and a hundred green sheets a week are symptoms of a manager who doesn't know what to manage. Define the role, measure it, and put experienced guidance behind it if needed.
- Watch what happens in the trucks. VEDR footage, pace, and stops per hour are not optional. They are the business. Someone on your team must review them every day, and the conversations they produce aren't debatable.
- Protect your leadership meeting. Chad cancelled eight in a row while fighting fires. The meeting is where fires get prevented. Make it non-negotiable and bring an outside voice in if you need help staying on track.
- Give drivers a scoreboard. A TV and a stand. Three times a week. Fifteen minutes. Rankings, a safety topic, and a drawing. Let the drivers teach each other from the data.
- Don't wait a year to ask for help. Chad asked after about three months, and he still describes the cost of what he tried first as substantial. Every month in bronze is margin you don't get back.
Peak is a few weeks out. For a lot of contractors this will be the first peak with Network 2.0 volume, and the productivity trend across our client base has been heading the wrong direction. What you do in the next few weeks is what you'll have in December. Chad put his scoreboard up right before last year's peak with no rewards and no discipline attached, just to see what would happen. A year later he's tipping gold.
eTruckBiz Inc. works with FedEx Contracted Service Providers to put the structure, daily visibility, and accountability in place that Chad described, through the Business Growth and Support System. If you'd like to find out what your ezNumber is and where your operation is leaking margin, schedule a working session with our team. The Right Service Provider Support, Right Now.