The Business of Independent Service Provider Contracting

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

Do you spend a lot of time thinking about how to improve your transportation company operations? If you’re a FedEx Ground Contractor, there are thousands of Contractors like you sharing the same questions.

And if you’re not a FedEx Ground Contractor, but are thinking about getting in the game - there are tens of thousands people like you asking themselves questions.

Or, if you’re a Business Contact (BC), thousands of transportation company managers are wondering the same things. What are some easy ways our team can get to the top of our game?

Zig Ziglar’s famous catch phrase was, “See you at the top!”  Well, Zig, how do we get to the top?

Topics: Business Results, FedEx, Classes, Training, FedEx Ground, Metrics, Profit

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

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 ...

Topics: FedEx, Ground, ISP, FedEx Ground, Business, Contract, Investment, model, Agreement

We recently hosted a webinar that obviously struck a chord with many Contract Service Providers (CSP’s). Attendance for the webinar was sizable. The topic was Dynamic Route Optimization, more well known by its acronym, DRO, which has understandably created a generous amount of frustration.

Topics: Business Tools, FedEx, Training, FedEx Ground, Investment, Dynamic Route Optimization, DRO

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

Implementing new processes can be challenging. And when it comes to implementing a new process for your business, time is money.

FedEx Ground now is requiring Contractors to outfit their vehicles with dual-facing Video Event Data Recorders (VEDRs), to implement a driver safety program to meet industry standards, contractual obligations and to meet three out of four Key Indicators (KIs).

Topics: Business Tools, Compliance, FedEx, FedEx Ground, safety

In today’s world with the latest AI (artificial intelligence) technology, we can use voice commands to control not only our devices,- “Alexa” / “Hey Google” “Play Crazy Train by Ozzy Osborne” (yes choice of song intended), but we can also control our lights (remember the clapper?), garage doors, air-conditioning, and appliances through apps from the palms of our hands.

One would think that a world class company like FedEx would be able to offer a highly sophisticated routing solution software as a tool to fine tune the routing for today’s exploding e-commerce market. You would be correct to hope for that to happen.

Topics: FedEx, FedEx Ground, Profit, Scheduling, Dynamic Route Optimization, DRO

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. 

Topics: Business Tools, Business Planning, Business Results, FedEx, Ground, FedEx Ground, vendor

In October 2019, James Sheban, an FXG Contractor, reached out to eTruckBiz about an urgent problem. His company, Sheban Express, had recently failed its VEDR audit. He needed expert guidance to correct the situation. And he knew that his company may lose its contract if the audit wasn't quickly addressed.

Topics: FedEx, Training, FedEx Ground, safety

Did you pay attention to the CEO's quotes in last week's press release? Maybe the rhetoric sounded familiar.

"We demonstrated once again the power of our unrivaled network and our ability to provide solutions for our customers while growing package volumes during our peak period."

"We will continue to aggressively pursue opportunities to generate profitable revenues and drive greater operational efficiencies under our current structure..."

No, the above quotes weren't from FDX. In fact, those were quotes from the U.S. Postmaster General and CEO Megan J. Brennan last Thursday.

Topics: Business Outlook, FedEx, Ground, FedEx Ground, vendor

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.

Topics: Compliance, FedEx, Ground, ISP, FedEx Ground, Business, Contract, Selling, contractor, Purchase, safety

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.

Topics: Business Structure, Business Outlook, FedEx, Ground, ISP, FedEx Ground, Business, Contract, Selling, contractor, Purchase

It's a simple question with a simple answer. If you're a FedEx CSP, you may think - of course FedEx decides how much I'll earn because they decide what to pay for my services.

But it's not the right answer.

Focus instead on two key words, "decides" and "earn."

FedEx offers, or negotiates, estimated fixed and variable revenues, but they don't decide how much of that you'll keep.

You will make decisions during the course of the contract  determining how much you'll earn.

Don't confuse income with earnings.

Topics: Business Structure, Business Outlook, FedEx, Training, Ground, FedEx Ground, Negotiation, Profit

Wayne Gretsky, Isiah Thomas, Magic Johnson, and Pete Rose. Each was phenomenally successful at scoring goals, points, or runs in their respective sports. Coaching others to do the same? Not so successful.

Bill Belichick, Pat Riley, Bobby Cox and Tony La Russa. Polar opposites to the previous four athletes.

"What's your point?" you ask.

Business people, like athletes, don't have to be great players to be great coaches and vice versa. However, great coaches can bring out the best in others.

Topics: Business Structure, Business Outlook, FedEx, Training, Ground, FedEx Ground, Negotiation, Profit

Here we are at the end of another year.

Topics: Business Structure, Business Results, FedEx, Business Metrics, Business, Investment, model, Metrics, Selling, contractor, Profit, vendor