FedEx contractor revolt?

[bbsam]

Now you're talking sense. Your plan is to downsize to whatever profitable minimum that exists and to resist any attempts by Fat Freddy to pull you out from behind that economic fortress. Like the first TM at our terminal told me...."I admit it...it's a rotten deal but you signed it. Now I'm going to tell you how you can survive. Keep borrowed money to minimum and limit your exposure to risk and to variable costs to only that which you cannot avoid"

So if you’re understanding what I’m saying, it isn’t a huge stretch to understand Spencer. FedEx will put up with me because they don’t have better options. They’ll do the same with him for the same reason. They hate it, but it’s the house they’ve built.

 

[bacha29]

So if you’re understanding what I’m saying, it isn’t a huge stretch to understand Spencer. FedEx will put up with me because they don’t have better options. They’ll do the same with him for the same reason. They hate it, but it’s the house they’ve built.

It is gratifying to see contractors finally resisting pressure from management to go borrow more money just to cover areas that management knows is not and never will be profitable to service and doesn't want to have to pay what it will cost to make them even marginally profitable.

I once told middle management, "This business model is designed for a metropolitan area in a warmer climate with flatter terrain a modern highway system with much higher population density and much higher per capita consumption. The area were we are located is in every standard of comparison the complete opposite."

Here's where the similarity exists between Fat Freddy and Bezos. Both of them think the whole world is one great big prosperous city. Then they get out there and discover just how rural, sparsely populated and economically depressed the nation still is. Bezos as everyone knew he would took the easy in town stuff and then dumped the money losing rural junk off onto the post office. When Fat Freddy bought out Sullivan the whole county both good areas and bad went right along with the deal. He then makes the totally stupid move of taking Smart Post back from the post office and tried to do it himself then cut rates so low no contractor could survive.

This the one foremost reason why we 3 Day 1's refused to expand. There simply weren't any investible areas remaining that offered a worthwhile return relative to the headaches they presented. Fat Freddy's wants every damn dime the box pays for himself and now it would appear that he's gotten even worse than before in that regard.

 

[yadig]

Fat Freddy and raj must have dangled a carrot to the contractors, they’ve been awful quiet lately.

 

[It will be fine]

Fat Freddy and raj must have dangled a carrot to the contractors, they’ve been awful quiet lately.

Spencer announced his trade association and what it plans to work on. The expo is next weekend where we’ll get a good idea how many contractors are going to join the trade association.

From the sound of things, Fats and Raj plan on offering even less peak incentives than last year because the volume expectations are pretty low. They haven’t responded to the trade association news publicly. I’m sure they’re not big fans.

 

[bbsam]

@bacha29

Have you heard of D.E. Shaw? I guess they are or want to be big holders of FDX stock.

Seems they have questions for contractors. Spencer seems to have gotten their attention.

 

[bbsam]

Fat Freddy and raj must have dangled a carrot to the contractors, they’ve been awful quiet lately.

Nope. See above.

 

[bacha29]

Nope. See above.

The two additional board members were announced today . A former navy admiral and a journeyman manager. The key here is that they were to the satisfaction of DE Shaw.

The thing to remember is that Shaw is only about the 15th largest shareholder. He's not big enough to take on Fat Freddy all by himself. He would have to get several other major shareholders lined up on his side to get in a proxy fight that would have even a half a chance of gaining control.

So contractors DE Shaw is not your friend. In fact you might not want to provide any financial information . D.E. Shaw is a hedge fund/corporate raider that seeks out and exploits market abnormalities. Therefore, if a spin off/ break up/ sale off is what he has in mind and if successful there's no telling where you guys might end up at and he ain't going to give a rodent's rectum about what happens to you guys outside of how he can use you to better fulfill his aims.

Keep in mind XPO spun off it's logistics/warehousing operation and is selling both it's trucking brokerage division and entire European trucking operations to raise cash and pay off some debt..... D.E. Shaw might also be thinking along those lines. This could be a very wild ride and remain unsettled for years.

 

[floridays]

Nope. See above.

Give Ground hell Sam.
Maybe you guys can teach Express employees something. They certainly haven't learned anything from the pilots association.
I offer you my best wishes.

 

[bbsam]

The two additional board members were announced today . A former navy admiral and a journeyman manager. The key here is that they were to the satisfaction of DE Shaw.

The thing to remember is that Shaw is only about the 15th largest shareholder. He's not big enough to take on Fat Freddy all by himself. He would have to get several other major shareholders lined up on his side to get in a proxy fight that would have even a half a chance of gaining control.

So contractors DE Shaw is not your friend. In fact you might not want to provide any financial information . D.E. Shaw is a hedge fund/corporate raider that seeks out and exploits market abnormalities. Therefore, if a spin off/ break up/ sale off is what he has in mind and if successful there's no telling where you guys might end up at and he ain't going to give a rodent's rectum about what happens to you guys outside of how he can use you to better fulfill his aims.

Keep in mind XPO spun off it's logistics/warehousing operation and is selling both it's trucking brokerage division and entire European trucking operations to raise cash and pay off some debt..... D.E. Shaw might also be thinking along those lines. This could be a very wild ride and remain unsettled for years.

So you’re saying it’s not over yet?

Remember, I don’t care how it ends. I just know it’s not going to stay what it is right now.

 

[bacha29]

So you’re saying it’s not over yet?

Remember, I don’t care how it ends. I just know it’s not going to stay what it is right now.

I think it's a question of whether or not Shaw is simply setting up to make some quick cash or has set out to completely overhaul the board and management of the entire company and perhaps gain majority control. You'll find out which as events unfold but I wouldn't expect to see the plight of contractors improving much in the near term . Fat Freddy is going to need an ocean of cash in order to meet Shaw's demands and guess where he's going to get it.

 

[bbsam]

If the plight of the contractor doesn’t improve, the model will continue to erode. Not sure how that’s good for Shaw

 

[bacha29]

If the plight of the contractor doesn’t improve, the model will continue to erode. Not sure how that’s good for Shaw

D.E. Shaw is a arbitrageur/hedge fund. The question he is what is his timeline? Is he looking to rip Fat Freddy for a big and quick wad and in doing so wreck the company's bottom line and balance sheet taking years to recover or has he set out to undertake a complete transformation of the entire company which could either mean a full consolidation of the entire company into a UPS style model or break it apart and sell it off piecemeal. The first and last outcomes are the most likely. Getting stuck running the entire FDX company is not something he would normally allow himself to be encumbered with.

Either way it still looks like contractors are going to continue getting cuffed around and dragged along behind the wagon until they free themselves no matter the economic cost.

 

[bbsam]

The thing to remember is that Shaw is only about the 15th largest shareholder. He's not big enough to take on Fat Freddy all by himself. He would have to get several other major shareholders lined up on his side to get in a proxy fight that would have even a half a chance of gaining control.

D.E. Shaw is a arbitrageur/hedge fund. The question he is what is his timeline? Is he looking to rip Fat Freddy for a big and quick wad and in doing so wreck the company's bottom line and balance sheet taking years to recover or has he set out to undertake a complete transformation of the entire company which could either mean a full consolidation of the entire company into a UPS style model or break it apart and sell it off piecemeal. The first and last outcomes are the most likely. Getting stuck running the entire FDX company is not something he would normally allow himself to be encumbered with.

Either way it still looks like contractors are going to continue getting cuffed around and dragged along behind the wagon until they free themselves no matter the economic cost.

Which is it? Is Shaw a minor player or the driving force?

 

[Fred's Myth]

The two additional board members were announced today . A former navy admiral and a journeyman manager. The key here is that they were to the satisfaction of DE Shaw.

The thing to remember is that Shaw is only about the 15th largest shareholder. He's not big enough to take on Fat Freddy all by himself. He would have to get several other major shareholders lined up on his side to get in a proxy fight that would have even a half a chance of gaining control.

So contractors DE Shaw is not your friend. In fact you might not want to provide any financial information . D.E. Shaw is a hedge fund/corporate raider that seeks out and exploits market abnormalities. Therefore, if a spin off/ break up/ sale off is what he has in mind and if successful there's no telling where you guys might end up at and he ain't going to give a rodent's rectum about what happens to you guys outside of how he can use you to better fulfill his aims.

Keep in mind XPO spun off it's logistics/warehousing operation and is selling both it's trucking brokerage division and entire European trucking operations to raise cash and pay off some debt..... D.E. Shaw might also be thinking along those lines. This could be a very wild ride and remain unsettled for years.

Explains why BOD is using capital to buy back stock instead of increasing compensation to contractors and employees.

 

[bacha29]

Which is it? Is Shaw a minor player or the driving force?

As I told you right now Shaw only holds 4 of the 15 board seats and is only about the 15th largest shareholder. Now if he could pull 2 of the other 5 largest shareholders not counting Fat Freddy over to their side they could launch a proxy war that could result in Fat's and or Raj off the top board/executive seats allowing for new people come in assume the top management positions and take the company in a new direction. He clearly represents one of the more activist shareholders Fat's has had to deal with in recent years. In addition one of the current 15 board members cannot stand for reelection due to longevity and age bylaws. In addition Fat's had to raise the dividend 53% just to keep Shaw tamped down for awhile. So guess where the money's going to come from to hoark up that big dividend hairball?

Expect Shaw to make another move.....when he's ready. In the meantime you guys are simply pawns in the game.

 

[bbsam]

@bacha29

Pawns seem to be able to rattle the Kings Court from time to time.

Care to bet on the stock price come two weeks from today?

Why would Wall Street analysts even show up? Tell me again how we’re all about to be crushed by Fats and Raj. Love that story!

Pretty sure John Smith is stomping around ina blathering, blubbery rage.

 

[floridays]

So if you’re understanding what I’m saying, it isn’t a huge stretch to understand Spencer. FedEx will put up with me because they don’t have better options. They’ll do the same with him for the same reason. They hate it, but it’s the house they’ve built.

Do all the contractors you know need the next settlement to survive?
If not, why not refuse to back in and load your trucks up.

It's obvious you don't have their attention, you have to get it first.
You can get your lost money back if you refuse to load a package until they make you whole for what you have lost.

They need you as much as you need them.
It's your livlihood, take that statement anyway you choose to.
I understand it does take solidarity however.

 

[HedleyLamarr]

Do all the contractors you know need the next settlement to survive?
If not, why not refuse to back in and load your trucks up.

It's obvious you don't have their attention, you have to get it first.
You can get your lost money back if you refuse to load a package until they make you whole for what you have lost.

They need you as much as you need them.
It's your livlihood, take that statement anyway you choose to.
I understand it does take solidarity however.

If FedEx board members are going to the expo, then they are definitely paying close attention to what is going on at Ground. I know they are pretending to be above it all, but behind closed doors in Pittsburgh and Memphis, they are panicking. The contractors have ALL the leverage and the company knows it.

 

[yadig]

If FedEx board members are going to the expo, then they are definitely paying close attention to what is going on at Ground. I know they are pretending to be above it all, but behind closed doors in Pittsburgh and Memphis, they are panicking. The contractors have ALL the leverage and the company knows it.

They hold all the leverage if they stick together. FedEx is a mastermind at division and they’ll find away to keep so many happy and the rest will follow suit. If the contractors can somehow unionize then you’ll see changes. It’s the only way now!

 

[bacha29]

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@bacha29

Pawns seem to be able to rattle the Kings Court from time to time.

Care to bet on the stock price come two weeks from today?

Why would Wall Street analysts even show up? Tell me again how we’re all about to be crushed by Fats and Raj. Love that story!

Pretty sure John Smith is stomping around ina blathering, blubbery rage.

So what? The 2 board members will in all likelihood be D.E. Shaw appointees who will report directly to DE Shaw to plan their next move. And 5 analysists going? What's so special about that? Chances are they're casino stock analysts domiciled there by the brokerage house the work for. According to CNNMoney.com 25 analysists coving the stock have a median target price of $291.

If you guys still think you've got Raj and Fat Freddy by the balls, take a walk past your trucks and look to see whose DOT numbers are on the side of it then ask yourself who's top cock?