Sustainability questions hover around FedEx after independent contractors handling swaths of its ground game demanded more money.
A household name in doorstep delivery, the Memphis, Tennessee-based organization has been on something of a losing streak. In September 2021, the outfit sustained a 7 percent drop in its quarterly profits before bouncing back in the spring of 2022. Challenges in staffing facilities led to the closure of facilities in Pennsylvania and Tennessee, among others. Although FedEx ranks among the country’s top delivery service outfits, the optics appear troublesome.
While the FedEx leadership team has been working to make improvements, independent drivers are feeling the sting of process at the pump and 40-year-high inflation. Spencer Patton reportedly oversees more than 200 routes across 10 states. He recently sent out a letter to other logistics professionals demanding increases that include 50 cents per stop for deliveries and 20 cents per mile for truckers moving parcels from hub to hub.
“Written from the desk of one of the largest contractors in the United States, believe me when I write that the situation is far direr than the general public currently understands,” Patton reportedly stated. “Not a single day passes without my phone ringing with the story of yet another contractor who is financially collapsing under the weight of these dramatic cost changes that have gone entirely unaddressed by FedEx Ground in 2022.”
Patton appears to have set a deadline of Nov. 25 for FedEx “to provide substantial financial remedies to its base of 6,000+ Contracted Service Providers.” He also posted a video outlining the decline in service in certain areas and others that have been effectively abandoned across the country. Contract Service Providers are also suffering high default rates, according to Patton. The logistics expert also points out that 7-day delivery expectations are only adding pressure to an over-stressed trucker and doorstep delivery workforce.
“By our estimates, Sunday deliveries are costing FedEx Ground upwards of $500 million in earnings drag. That $500 million figure is getting worse, not better. Likewise, Sunday deliveries erased more than one-third of CSP profit margins in less than one year’s time. In parallel fashion, that margin erosion is worsening, not improving.” he reportedly stated.
Patton plans to leverage his yearly conference to put together a coordinated response to the financial and logistical upheaval at FedEx. The event is expected to be held in Las Vegas, and the formation of a 10-person committee is on the agenda to open direct negotiations with FedEx on behalf of independent contractors and delivery firms. Patton anticipates the lion’s share of the 6,000 contractors will attend the gathering.
Sources:
https://ajot.com/news/fedex-contractor-revolt-intensifies-with-calls-for-pay-increase
Maybe just maybe if they would slow down and quit going down the road driving like dang idiots and crashing as much as they do fed-x might pay more. Can’t much blame fed-x for not paying more
Being that FedEx insurance requires that their trucks be governed @ 67 mph.
In Southern California FedEx Ground sleeper drivers make $0.70-.80 a mile with insurance.
I understand sniveling drivers rag on them but I wonder if it’s jealousy because they make more than the snivelers?
Maybe Dick Bernal drives for Swift or JB?
Hope they go out of business. Another low paying company with ridiculous standards.
I did notice when there is a major wreck on an interstate, Fed-Ex is always in the middle of it.