The Business of Independent Service Provider Contracting

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

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

Image by Lytx

This blog post is written by our friends at Lytx.

Why are KIs important to your business? We explain everything, from the metrics that matter the most to KI fleet management tips.

Keeping track of fleet management metrics is necessary in order to make objective decisions and improve performance over time. Tracking KIs is an important aspect of measuring efficiency and productivity and is integral to identifying problems and making corrections. Safety KIs, in particular, are essential to keeping your fleet running at optimum levels while ensuring minimal risk.

Topics: Business Tools, Business Results, Compliance, Training, Business Metrics, FedEx Ground, Business, Investment, safety, coaching, vedr

Today's blog post is brought to you by our friends at Fleetcor.

As a Contractor, the work seems simple, deliver packages on time and customers will be happy.

It’s not always that easy, there’s an operational side to your business, the public never sees, that is just as important to your success. One example is managing fuel spend. Fuel fraud and misuse can tank your profits, and it’s not always glaringly obvious when it’s occurring, so it pays to introduce regular monitoring controls.

Keeping a watchful eye on expense trends can help catch fuel fraud early, before perpetrators have a chance to rack up extensive charges.

Topics: Business Planning, FedEx, Business Metrics, FedEx Ground, Business, Metrics, Fuel

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.

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

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?

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

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.

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

As we’re approaching peak this year, conversations with FedEx Ground Contractors reflect a sense of urgency caused by the expected increase in package volume. From California to the east coast, everyone is feeling the pressure. Rental trucks have long been reserved by others, new trucks are scarce, the competition for finding and hiring temporary drivers is tough, and the new pre-load technology is time consuming at best.

Topics: Business Tools, Business Planning, Business Results, Business Metrics, FedEx Ground, Investment, Profit

A common thread amongst FedEx Ground Contractors is the amount of time and effort required to handle everything that’s expected to stay compliant, safe and profitable. If you’ve been tracking our blog posts about time and task management, this is the third in a series.

First, we suggested tracking where your time is spent. From there, we looked at the likelihood that working seven-days a week has resulted in losing your identity. You’re known by your job.

Now, let’s examine how to improve your working situation.

Topics: Business Tools, Business Planning, Business Results, Business Metrics, FedEx Ground, Investment, Profit

Did you read FedEx’ Quarterly Results issued last week? The financial news outlets wrote absolutely glowing reviews.

Yahoo! Finance headline declared, “FedEx Corp. Reports Strong First Quarter Results” while Barron’s headline gushed, “FedEx Destroys Earnings Estimates. Things Are Getting Really Good.”

Reading further down the page you’ll find, “Operating results increased due to volume growth in...U.S. domestic residential package services, yield improvement at FedEx Ground..., and one additional operating weekday.”

Could Yahoo! Finance and Barron’s write the same headlines about your last three months? You don’t issue forecasts, but if you did - would you be blowing it out of the water, too? If not, why not?

Topics: Business Tools, Business Planning, Business Results, Bookeeping, Business Metrics, FedEx Ground, Investment, Profit

Okay, we know what many folks are going to say. The DRO is troublesome and may not work.

While it is true that learning to use it effectively is difficult, it actually works fine. It’s the theory and engineering principals behind it that are difficult to maneuver and grasp.

The move from static route creation and management to that of a very dynamic (always changing) way of route management is now at hand. Thanks to the virus, the premature push to unprecedented levels of eCommerce, and the need for 7 day service, all are being forced to transform quicker than originally planned.

The time to embrace Dynamic Route Optimization is at hand. The fundamental culture change to Dynamic vs. Static planning is now underway.

Topics: Business Tools, Business Results, Management, Training, Business Metrics, FedEx Ground, Business, contractor

As of 1/10/2020, it’s a new day for FXG CSP’s.

You may recall we’ve talked about TRANSFORMING your Lifestyle Business into a 

Transportation Compan y for the past several years.

FXG's announcement of the new Financial Health Assessment added a new, critically important component for how they keep score on your business performance, and your value to them.

Engaging a third party, RapidRatings, to examine your financial health, then reporting those findings to FXG will create a measurement (number) that will become just as important as your daily service - if not more so.

As a CSP, you should understand the significance of this announcement and the reasoning behind why it will be so crucial going forward.

Let’s take a look at what is going on here...

Topics: Business Planning, Business Results, ISP Negotiation, Business Metrics, Contract, Profit