The Business of Independent Service Provider Contracting

A year ago, Chad Barnes was covering about 60% of his Contracted Service Area, losing half his drivers every month, and getting phone calls from the terminal every hour telling him to fix it. He had paid millions of dollars for the contract. He was, in his own words, ready to sell.

This week he joined our Weekly Business Update and told the story of what happened next.

The day before we talked, GoGo Drop delivered 716 of 717 time-definite packages on time. His operation has climbed from what he calls "a color below bronze" to the edge of gold. His margin is close to 20% and he's working toward 25%. And he had just returned from a two-week leadership trip to South Africa during which, by his account, the business ran better without him in the building.

I've reproduced the heart of our conversation below, lightly cleaned up for readability, with our own commentary between the questions. I asked Chad to be candid about what went wrong before it went right, and he was.

If you're a FedEx CSP who is struggling right now, or if you're about to buy a contract and think FedEx is going to show you how to run it, this one is for you.

Driver turnover is climbing across the FedEx Service Provider base, and the timing could not be worse. Our eTruckBiz data shows Service Provider driver turnover running 30–40% annually, with roughly a third of new hires gone before they reach the 90-day mark. That is consistent with the broader sector — Bureau of Labor Statistics JOLTS data shows annual separation rates in transportation and warehousing regularly exceeding 40%. The difference for you is that a national statistic is an abstraction and your roster is not.

Two things are converging right now. First, Network 2.0. FedEx has implemented the new model at roughly 360 locations, has closed more than 200 stations with 475-plus targeted by the end of 2027, and expects 65% of eligible daily volume to run through optimized facilities by the time this peak season hits. Many contractors have not been integrated yet. For those who have, the integration itself — new start times, reworked CSAs, new operational demands, and in some cases, new leadership — has been generating turnover on its own. Change is a resignation trigger, and Network 2.0 is nothing but change.

Second, peak. The 2026 FedEx Ground peak settlement period runs Saturday, November 21 through Friday, January 1, 2027 — six settlement weeks carrying surge stop charges. That is roughly ten weeks from today. A driver you hire in October is not a peak driver; a new hire realistically takes three to five weeks to become productive, and DOT qualification and Qual Cert processing eat into that before they ever run a route solo. The drivers who will actually carry your peak are already on your roster. The only real question is how many of them will still be there on December 15.