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
At eTruckBiz, our mission is simple- to help contractors run the easiest and most profitable business possible. Recently we’ve become aware of a potentially growing problem found within several contractors’ operating agreements. In each case, these were recently negotiated contracts done by popular brokers in the FXG space.
Topics: Business Results, ISP Negotiation, FedEx, FedEx Ground, Business, Contract, Negotiation, contractor, Profit, Agreement, consulting, settlement, Cash flow, brokerage, brokers
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.
By now, it’s easy to see that everyone’s operating margins are being seriously squeezed.
In an effort to force some sort of helpful response, some made a plea to FXG asking for assistance in various areas to solve a worsening financial situation.
Trust us when we say that FXG is very aware of the plight of CSP & TSP’s.
But now, there is another added challenge that has reared its head. This one, along with inflation not seen for generations, is going to create some unprecedented financial problems that will test even the best operators…
Topics: Business Results, Bookeeping, Training, Intelligence, Business Metrics, Negotiation, Profit, consulting, Money, Cash flow, Inflation, Costs, recession, expenses, renegotiation, Financial, Rates
So it’s not the 2008 financial crisis, but in the FXG Contracted Service Provider world, it could ultimately prove to be worse.
A combination of events has spawned a crisis that we foreshadowed back in August of 2021 in our post: the Dark Side Of Density.
What we described in that post has ultimately proven to be true, and is now exacerbated by the quickly deteriorating economic conditions.
As business owners, solving problems is a daily occurance. This one however is going to need full attention, for an extended period of time.
Let's begin our look at what to do about all this by analyzing the root causes of why the issues now exist...
Topics: Business Results, ISP Negotiation, Payroll, Business, Contract, Profit, consulting, Money, Inflation, Costs, Holiday Season
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.
Topics: Business Structure, Payroll, Ground, FedEx Ground, overtime, leadership, Money
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.
Topics: Business Structure, Payroll, Ground, FedEx Ground, overtime, leadership, Money