The FedEx network, under the transformative wave of Network 2.0, is poised for significant change. This overhaul will extend its influence to all facets of FedEx and, by extension, to the lives of its customers. Amidst this transformation, there's a vital element that must remain unwavering for the successful integration of Express services into the Ground network: the FedEx Brand.
As eTruckBiz wraps up its 12th year, we take a moment to reflect on the journey so far and the exciting path that lies ahead. It's been a time of significant challenges and changes, not just for us but for the entire FedEx Contractor community. Despite the turbulence caused by ongoing changes within FedEx and the broader economic landscape, we've navigated these waters with resilience and innovation.
In our last blog post, we released a legal summary of the most recent lawsuit making the rounds in the transportation business industry. Our goal was to provide contractors with the facts and a summary along with our best industry recommendations. Our advice is always based on past experience and what we believe is best for contractors, but ultimately we want to empower contractors to make their own choices based on their unique business situations.
We've got some news that's making waves in our circle. A new lawsuit has popped up concerning contractor status. It's stirring quite a bit of chatter, and we at eTruckBiz think it's crucial to chat about it, especially since it touches on the heart of our operations – the independent contractor model.
Topics: FedEx, ISP, FedEx Ground, Business, Contract, Negotiation, contractor, Financial, Network 2.0, Margins, fedex legal issues, low cost model, fedex ground contractors, fedex ground legal advice, fxg, fedex lawsuit, Spencer patton, Patton Logistics, CSP
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.
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.
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.
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.
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.
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...
July 20th, 2020, was the day that FXG announced via MGB that it would make significant changes to the way they will approach your End Of Agreement (EOA) process.
It is important to understand what’s going on here, as it will impact the way you think about contract renewals with FXG.
At first glance, it appears it’s just FXG flexing its muscles again, and in some respects that’s true.
However, when you study the process, it’s easy to see that it is really an attempt to ...
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.
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...
Are your drivers forced to comply with safety rules?
Or do they want to comply?
If you prefer the latter, maybe you should consider Ashiq Mizan’s unique approach.
Do Your Drivers See the Big Picture?
Ashiq Mizan is a CSP in Philadelphia, PA, who had grown increasingly frustrated with his drivers’ lack of safety training compliance.
Despite the safety training lessons being super-easy, compliance in October was around 5%. Not only did his drivers' indifference put his money at risk, but it also showed that they were missing the bigger picture.
Is FedEx about to be purchased?
The answer is probably not...maybe.
Truth is we'll never know for sure until it happens. But don't lose sleep over it because it's not under your control.
However, it's good business to think about and reasonably prepare for change. Focus on things you can control.
Let's take a look at what a sale of FDX might look like for CSP's.