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.
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...
Don’t think it matters which MESO you choose when you negotiate?
We're sure you know you are gambling with the financial health of your biz when you pick a MESO based on:
- What other CSP's say is the best one to take on Facebook
- The one with the best incentive bonuses
- Thinking they hide the best one behind door #3
- No Research, No Analysis, No Data
This is what the other side hopes for, and knows many CSP's do.
It pays to do your homework and get some expert help to determine what the best offer is based on the unique characteristics of your CSA.
There's too much for you at stake to not give this issue the attention it deserves.
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...
"Eight Days a Week" is a popular song written by Paul McCartney and John Lennon in the 1960's about love. According to McCartney, the title was inspired not by love, but by work.
He has been quoted as saying when he asked his chauffeur how he was doing, the chauffeur replied, "Oh working hard, working eight days a week." (Wikipedia, May 22, 2019).
You and your drivers probably feel the same about FedEx' recent announcement to move FXG to a seven-day work week.
As an FXG contractor, you will soon have, or recently had, the (planned?) opportunity to leave money on the negotiating table.
How much money is up to you, and will be determined by your lack of preparation.
If you're not bothered by leaving money, then simply picking a MESO and moving on with your life is up to you.
On the other hand, for contractors who rely on profits for your livelihood - you may find this blog post helpful. After all, eTruck's mission is to help those who want expert guidance.
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.
Why is it important to understand and monitor your weekly Driver Productivity Report that is emailed to you weekly from eTruckBiz?
Well, it could mean the difference between surviving in the ISP environment or not.
I want to take you through the report, and show you why it is of utmost importance and why it matters to you.
First and foremost, it provides a way for you, on a weekly basis, to measure and monitor the performance of each driver to the goals or expectations you have in place for them. You should use it to give your drivers feedback and follow up on their performance.
Now that you know you will be going through your initial negotiation, there are a few things you need to be doing NOW. This it true no matter how far off it may seem. If you ask anyone who has already been through one, they'll most likely tell you that a solid understanding of where you currently stand (number-wise) is the foundation of a meaningful and successful process.
Not only will doing the things we are about to mention help you get more of what you want, but being prepared will dramatically lower your stress levels.
Most of us, when embarking on a journey to somewhere we've never been, get the map out (or today "Google It") to see where it is we are going. We then PLAN on how to get there.
You can PLAN your journey to your ideal ISP Destination by doing the following things:
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...
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!