The Business of Independent Service Provider Contracting

Network 2.0 = Contracting 2.0

Posted by Jeff Walczak on 7/4/22 5:15 AM

Well, the time has finally come.

FedEx has officially announced the big move that we had known was coming for a long time.Start

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. 

Network 2.0 is the destination. Whether it takes 2, 3 or 5+ years to get there really doesn’t matter for current and future CSPs & TSPs. As you can see, the transformation has already started. The announcement this week was just a show for the investment community and an opportunity to wave the starting flag.

It's underway and there's no stopping it now!

What Does It Mean For FXG Contractors?

It’s important to understand that Network 2.0 will result in Contracting 2.0. This means that all the changes that have happened for years prior to last Wednesday were basic things that needed to happen prior to readying the entire system for the real transformation that is about to begin.meaning

For example, the contract that allowed for a contractor’s proprietary interest in the their work area needed to be eliminated so that the path for 1 year contracted vendors (CSPs) could be cleared.

Network 2.0 means big changes, but also that big opportunities are on the way.

What Changes Are Coming?

Now that the curtain has been pulled back, you can expect major movement in the plan to build the most cost and operationally efficient logistics network in the world.

There will be more changes in the next 3 to 5 years than there have been in the last 10. Some will seem insignificant and others will be sweeping operational changes.

shhSince there are so many changes that warrant explanation, we will be taking to the road to visit you in person to discuss it all. We will be revisiting our UnBoxed sessions of the past where a decent amount of what has, and is about to happen, was discussed.

We're sorry but most of the details are not appropriate for blasting out over the internet. We will be discussing them with you in person (see below).

Is This Good Or Bad?

Most of you who are still around have demonstrated that you are able to handle the roller coaster ride that has been FXG contracting for the past decade. If you have hung on, you'll probably be able to weather this storm as well.

 It's still the place for strong cash flow and above average margins in the transportation industry.

If you are able to adapt to another set of major league transformative operational changes, most of which will result in significantly increased revenue to the contractor, then you are definitely in the right place, and need not worry.

Notice what we just said there as a hint: "significantly increased revenue".

You'll be enjoying that part, but It’s going to take:

  • Leadership
  • Engineering
  • New Financial Tracking & Financial Management 
  • Training
  • Patience
  • Capital

Where Can I Learn More?

As previously mentioned, we are going to hit the road to bring the information to you.

If you’d like us to come present much more to you, fill out the form below and we’ll contact you about putting a presentation together in your area.

How Soon?

This is going to all happen relatively quickly. Unfortunately, FXG is not in a place where they can just roll out everything at once. This would cause chaos and confusion. They will do what they’ve already done, which is roll things out systematically, one thing at a time.

The difference now is that they have unveiled it all to the investment community, investors will not have the patience that may be needed for a paced approach to implementing Network 2.0.

So buckle up, it’s going to be another exciting ride!


Leave Your Comments Below:

Topics: FedEx, Management, Ground, Business, Contract, model, Money, Cash flow, renegotiation, Network 2.0, transformation

Independent Service Provider (ISP) Tips And Advice

Learn From Industry Experts And Successful Contractors

Get valuable, actionable information from our founder and other industry participants that also have a deep understanding of your business and want to help you maximize your opportunity. Keep up with all the issues that affect your business.

  • Stay Informed
  • Find and Implement Other Best Practices
  • Learn Profit Maximizing Strategies
  • Make Running Your Business Easy
  • Create More Time To Do The Things You Want To Do

Subscribe to Receive New Posts

Recent Posts

Posts by Topic

see all