If you have been a FedEx Contracted Service Provider (CSP) for more than a few years, you are likely familiar with the shift in how contract negotiations are handled. Long gone are the days of every negotiation being a lengthy, open-ended virtual table negotiation for every single agreement. In their place, we have the MESO program—Multiple Equivalent Simultaneous Offers.
On the surface, this system seems efficient. It presents three distinct (but equal?) options, allowing contractors to choose the path that best fits their operational style. However, after five plus years of this program, a troubling trend is emerging. While the MESO program streamlined the process for FedEx, it may be inadvertently suppressing contractor margins and driving good veteran operators out of the network.
This is the first of a two-part series exploring the MESO dynamic. In this post, we’ll break down the problem: how accepting "convenient" offers creates a cycle of inaccurate data that hurts your bottom line.
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Topics:
ISP Negotiation,
FedEx,
Contract,
Negotiation,
model,
Agreement,
consulting,
Cash flow,
expenses,
renegotiation,
Financial,
Margins,
Budget,
service provider,
MESO
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.
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Topics:
FedEx,
Management,
Ground,
Business,
Contract,
model,
Money,
Cash flow,
renegotiation,
Network 2.0,
transformation
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.
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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 ...
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Topics:
FedEx,
Ground,
ISP,
FedEx Ground,
Business,
Contract,
Investment,
model,
Agreement
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.
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Topics:
Business Structure,
Business Tools,
Management,
Payroll,
FedEx Ground,
Business,
Investment,
model,
Merge,
Purchase
Here we are at the end of another year.
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Topics:
Business Structure,
Business Results,
FedEx,
Business Metrics,
Business,
Investment,
model,
Metrics,
Selling,
contractor,
Profit,
vendor
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:
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Topics:
ISP Negotiation,
FedEx,
ISP,
FedEx Ground,
Business,
Contract,
Negotiation,
model
