More than 2,000 FedEx contractors reportedly gathered in Las Vegas to air grievances and discuss a recently formed trade association.
Spencer Patton, who operates more than 225 of the company’s routes, launched the Trade Association for Logistics Professionals (TALP) just weeks ahead of the Vegas conference. Formed as a non-profit for logistics peers, the organization could include upwards of 6,000 Contracted Service Providers (CSPs) to FedEx Ground. Patton appears to be leveraging the Sin City get-together to elect a 10-person leadership board and create collective bargaining power.
“In FedEx’s most recent earnings report on June 23, 2022, their numbers showed a stunning 30 percent expansion of profit margins while CSP profit margins dropped to new lows. In fact, FedEx disclosed they achieved those margins by passing fuel surcharges through to customers and withholding additional revenue from CSPs,” Patton reportedly stated. “CSPs are small business owners, many with just 10-25 employees, that simply do not have the financial resources to withstand historic price increases in fuel, wages and trucks. FedEx Ground has been unwilling to address the dramatic cost changes in 2022, putting the entire network in peril.”
Independent contractors in the FedEx Ground network have been lobbying the company to offset rising fuel costs, more costly vehicle maintenance, inflation, and higher wages, among others. Some contractors are considering a coordinated work stoppage heading into the busy fall delivery season.
Officials at FedEx Ground have no intention of working with TALP or any other trade association to hash out network-wide unrest. Reports indicate FedEx plans to maintain its policy of negotiating separately with each CSP. The organization has reportedly gone on the record saying the CSPs are welcome to join TALP, but contract discussions will not be brokered with the 10-person committee.
“Now with market conditions changing, FedEx Ground and service providers must all adapt and adjust again,” FedEx spokeswoman Jenny Robertson reportedly said. “We have confidence in our contingency planning and ability to deliver for our customers during this time as we weather economic changes.”
FedEx contractors typically purchase their own trucks and hire drivers for agreements that last 12-18 months. The massive growth of e-commerce rapidly changed the company’s focus and improved its profit margin in recent years. FedEx Ground comprised 36 percent of the operation’s annual revenue, according to its last financial disclosure.
Patton recently raised the notion of radically changing the CSP-FedEx business model. He’s expected to float the idea of restructuring the relationship to turn contractors into franchise owners, similar to fast-food chains. Each CSP would own an entity, provide services for a set territory, and receive corporate support. That might be a bridge too far given FedEx plans to decline discussions with a yet-to-be elected TALP leadership group.
Nominations for TALP’s 10-person leadership committee run through September 9, 2022. Voting for the TALP committee will occur from September 12 through September 18.
Sources:
https://www.prnewswire.com/news-releases/large-service-provider-to-fedex-ground-announces-the-trade-association-for-logistics-professionals-talp-301599273.html
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