The Business of Independent Service Provider Contracting

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.

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. 

The panic associated with the COVID-19 pandemic has forced you into ADAPTING how your business is run.

Only weeks ago, it was unthinkable that both our United States healthcare system and our economy would be under this kind of assault.

The good news is that this bizzare event has uncovered some things that will be useful to incorporate into your business strategies going forward.

Here are some tips & suggestions as you look ahead:

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.

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?

Take a look around.

Do you see the number of contractors around you dwindling?

How many contractors do you see today, vs. how many there used to be 2, 5 and 10 years ago.

It's plain to see the number of contractors is shrinking, while the number of trucks grows

This results in fewer, but larger operations.

Think this is a coincidence?

It's not.

As you seek answers from FXG on how you will achieve scale, contiguous service areas and overlap, you are being told you need to "work it out" with those around you. Well that's great, but how are you supposed to do so if you have limited resources?

There is a way, but you'll need to ask yourself some questions first.

Some of you reading this have already negotiated your first ISP agreement.

Maybe more than one. Others, still have not gone through the process yet, and are wondering what to expect.

Whether you are a veteran, or going to be a rookie, we thought we'd take this opportunity to share with you what we have learned from helping more than 800 of you (as of August of 2017) successfully get through the process.

It's been a while.

Yes, we know that it has been a while since we released anything new and exciting to help you run your business.

But good things come to those who wait!

We want to give you a sneak peak at the new "Contractor Business Intelligence Dashboard"....

Today, we'd like to announce a new initiative for 2016 that is aimed at helping you run your business better!

We would like to announce:  eTruckBiz University!

The purpose of eTruckBiz University is to be a source of continuing education and business training that you and your supervisory people cannot get from FXG. It is a way for you to get away from the daily grind so you can put things into perspective.

It is essential Business Training For FXG Contractors!

The time has come to look at the ISP Negotiation process from the contractor perspective. 

First, let's go ahead and call it what it is: David v. Goliath, FBS vs. FCS, Large Cap vs. Small Cap. It's the tremendous resources of FXG vs. those of an individual contractor. I think we can all agree that from the ability to influence, FXG holds the cards.

But that doesn't mean, a contractor cannot conduct a meaningful, and even successful negotiation. It just means that in order to do so, the contractor needs to do some homework, and find some very special tools and help.

Well, now, finally, the tools, and help exist...

Finally, it has arrived!

By overwhelming demand, we are introducing a new set of services from the highly experienced folks here at eTruckBiz, that will without question, make your life and business easier to manage, while producing information you need to conduct a more meaningful ISP negotiation.

We can now take some of the most burdensome chores out of your busy hands, so your can MANAGE your business,  instead of spending hour after hour doing "busy-work". 

Our new services produce not only the usual information you need for accounting and taxes, but turn this data into contractor-specific information that you'll use to get new, powerful insight into your FXG business.

One of the most difficult and tedious tasks that an FXG CSP faces, is the continuous burden of finding new drivers.

In order to find new drivers, you first must have a solid way of sourcing new potential driver leads. 

This can't be that hard...right?

Well...

How do you find them? Where do you find them? What do you do if you find them? How can you screen through them to get some good candidates, without it taking too much time and effort? Can you organize the ones I have so that you can find them and work on them when you need to? Can you email the good ones an application?

We've created a revolutionary new tool to make it easy to do all of this.

See how ...