The Business of Independent Service Provider Contracting

Ground CSP's, generally, possess exceptional area knowledge for the areas they service. They can utilize this knowledge to plan routes and take into account all the intricacies of a particular area.

Now, however, CSP's are starting to see that the old process of developing static routes to cover a particular service area is going the way of the horse and buggy.

Routes now need to be planned dynamically. This means that with the transformation of stop characteristics (residential) along with an evolving FXG business model (heavy focus on eCommerce), route planning needs to change constantly.

In order to remain successful, today's CSP must adapt to this new demand as the business continues to change. The number of routes and the actual route "boarders" need to be engineered in such a way to be flexible based on work load characteristics. 

HOW A COMMUNITY COLLEGE DROPOUT FOUND ENTREPRENEURIAL SUCCESS

You think your market conditions are tough, what about Colorado? According to the latest Bureau of Labor Statistics (BLS) data, the Denver area's average weekly wages are $1,242. Think it's easy to find drivers? The BLS also lists the area unemployment rate at 2.4%. Way lower than the U.S. average.

What made a young guy from out of town who knew nothing about the logistics industry think that he could buy a Ground business to support his growing family? Sure he's smart, but he's so young.

"There's no selling, no advertising, no collecting money from past due accounts. I'm not saying it's easy, but it beats a lot of other options out there," Preston Wengert says.

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 

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.

An Extra Set of Eyes

Dustin Franz bought an RPS route twenty years ago in Pasco, WA. Today, he's a successful FXG contractor with multiple routes. He's traveled an interesting path to profitability.

Buying a route was his first time owning a business. Much of how he learned to deliver packages came from his own experiences plus talking to contractors in his terminal.

Others taught him what they had learned from their own mistakes, and they really couldn't teach him how to be more profitable any faster. It was no fault of their own. They hadn't been trained themselves.

Dustin performed some online research and determined he needed outside assistance.

YOU CAN'T LET DRIVERS RUN YOUR BUSINESS

Business owners (CSP's) are generally likable. Drivers want to work for them. People enjoy being on their team. Nothing wrong with that. It's a good thing.

However, it's a problem when CSP's are too nice. Tracy Taylor learned that lesson early in his career as a Contractor. 

"I had 12 employees, 15 trucks and two operations hundreds of miles apart. My people needed me to make tough decisions instead of letting them manage themselves," he recalls.

RETAINING EMPLOYEES IN TIGHT LABOR MARKETS

Steve Ellis has been a contractor for almost twenty years. Many business owners who've been operating that long think their processes work because they've "always done it this way."

However, Steve's openness to studying and changing his processes make his operations exceptionally successful in a state with some of the lowest unemployment rates in the country.

THE PERILS OF BUSINESS OWNERSHIP

Marena and Ralph Markel bought their first FedEx Ground route in 2005.

Of course, they were inexperienced owners, but they were committed to their future and each other. Like many couples who work together, each spouse brought different skills and strengths to the business.

After experiencing significant growth, the pair were overwhelmed by the responsibilities of leading a large team of commercial drivers including:

• Scheduling
  
• Payroll
• Compliance
• Training

Would the couple remain happily in business?

Here we are at the end of another year.

It is finally here!

After a considerable amount of work on our part and feedback from you, we have developed a tool that will help you prepare for your transition to an ISP operating agreement.

It is important to point out that the tool has been developed in both a mobile and a desktop version.

Soon you will see why.

We didn't want to develop this tool with just your ISP negotiations in mind. We wanted it to be useful in many other situations as well,

And boy is it ever!

This is a hot one!

If you haven't already done so, during your annual compliance certification, you will be asked by FXG to certify that you have "established a system for recording and maintaining records of hours worked by employees".

There are lots of theories as to why, but the bottom line is, you need to have a way to do this.

So, you can get all bent out of shape complaining about this little zinger, or we can look for an easy way to do this that satisfies the requirement, and, turns this new task into a positive for your bottom line! 

Most of you know that I have the wonderful opportunity to talk to many contractors daily, from coast to coast. They ask lots of questions, but what do you think the the most frequently asked one is? You might guess it's about new features or something in eTruckBiz right?

It's not.

The question that's on the most everyone's mind is: How can I make my business more profitable?

Actually, the answer is pretty simple. Yet few know the answer. For most, doing what it takes to become more profitable can be boiled down to doing one simple thing.

Before we tell you how to do this thing, let's understand why many of you may be struggling or not doing as well as you like. The reason your results may be suffering is because there is something you don't know. 

Let's look at an example...