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
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.
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?
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
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 ...
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.
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.
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.
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.
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.