FedEx contractor revolt?

[bbsam]

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?

Nope. I don’t think that at all. I think Ground is going to implode. I’ve seen nothing that suggests that the leaders have any competence whatsoever and I know for a fact that contractors will let thousands of trucks sit and the network fail.

Now the analysts? If brokers are smart they’ll listen and start a massive sell off.

 

[Fred's Myth]

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?

Bacha's argument......

 

[bbsam]

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?

Who wants to be top cock if you’re stuck in a corpse?

 

[bacha29]

Nope. I don’t think that at all. I think Ground is going to implode. I’ve seen nothing that suggests that the leaders have any competence whatsoever and I know for a fact that contractors will let thousands of trucks sit and the network fail.

Now the analysts? If brokers are smart they’ll listen and start a massive sell off.

It's all gong to come to the question of how many contractors Ground can get caught in a no win situation. They can walk away, sell for pennies or take the deal and hope for better times.
Their contract is an intangible asset. It has no physical presence but potential revenue value but in this case the potential is entirely in the hands of Fat Freddy and his willingness to grant it to the contractor and that's for a maximum of one year . If there's no profit or minimal profit then what's it's value?

As a result it comes down to the same offer....."here's the load....here's what it pays....do you want it or don't you"?

As for Patton and the way he described his group, "it's not this, it's not that, it's not something else",. he' has already ceded whatever power it might have otherwise acquired. The only way that could get you the terms you want now is a very sizeable refusal of service over a large enough area for a long enough period of time....and he's just not going to get it, Fred Freddy knows it and Johnny Dollar Sign has made that point clear. The matter is already settled. Take the offer or leave. There is simply no third choice in the matter and it's not likely that there ever will be.

 

[It will be fine]

It's all gong to come to the question of how many contractors Ground can get caught in a no win situation. They can walk away, sell for pennies or take the deal and hope for better times.
Their contract is an intangible asset. It has no physical presence but potential revenue value but in this case the potential is entirely in the hands of Fat Freddy and his willingness to grant it to the contractor and that's for a maximum of one year . If there's no profit or minimal profit then what's it's value?

As a result it comes down to the same offer....."here's the load....here's what it pays....do you want it or don't you"?

As for Patton and the way he described his group, "it's not this, it's not that, it's not something else",. he' has already ceded whatever power it might have otherwise acquired. The only way that could get you the terms you want now is a very sizeable refusal of service over a large enough area for a long enough period of time....and he's just not going to get it, Fred Freddy knows it and Johnny Dollar Sign has made that point clear. The matter is already settled. Take the offer or leave. There is simply no third choice in the matter and it's not likely that there ever will be.

If Spencer gets states to start determining FedEx has been selling franchises instead of contracting out services, there will be changes. The question would be what those changes are. Franchises have heavier regulations, disclosure and termination requirements. The question being asked has already made FedEx alter its plans for an indemnity insurance fine they are going to start issuing in Oct. They had to change the whole program to pay incentives to more contractors to try to avoid franchise designation.

FedEx is afraid.

 

[bacha29]

If Spencer gets states to start determining FedEx has been selling franchises instead of contracting out services, there will be changes. The question would be what those changes are. Franchises have heavier regulations, disclosure and termination requirements. The question being asked has already made FedEx alter its plans for an indemnity insurance fine they are going to start issuing in Oct. They had to change the whole program to pay incentives to more contractors to try to avoid franchise designation.

FedEx is afraid.

It took 7 long years for the company to grudgingly grant goodwill and proprietary rights. And it took 12 years to settle out of court the multi state class action. So if you think that you can win franchise designation and that it will ease your suffering , well you might but by the time you get it it will be too late for most if not all of you. And how will the plaintiffs pay for all the legal fees? A bake sale? That's if you can find somebody given the time it took to settle the previous claims to take Fat Freddy on.

It does sound however that Fat's might be running out of ways to modify the Ground model in a way that will keep him on the right side of the law and still maintain the complete and total command and control he has had to this point and still maintain the choice gravy margins he's known in the past. But if he has reached the point where he can't shift and maneuver the Ground OPCO in a way that his favorable to him that doesn't altogether mean that he'll just capitulate to contractors . I don't think there's any question some on Wall Street believe that FDX is worth more broken up and sold than to continue in it's current cobbled together form

 

[bbsam]

Fred Freddy knows it and Johnny Dollar Sign has made that point clear. The matter is already settled. Take the offer or leave. There is simply no third choice in the matter and it's not likely that there ever will be.

So our terminal currently has two open CSAs. That means that for approximately 1300 stops every day the company is paying an additional $4 per stop above negotiated stop pay. Had one route sit because nobody had a driver available three days ago.

Yesterday they had approximately 20 stops left at 2pm unaccounted for. Text to all contractors offering $8 per stop to get those stops done. All stops on the same road 12 miles from the terminal.

Why does that tell us? It tells us that the “take it or leave it” offer is a smokescreen. Guess what happens next.

You’ll see more and more stops left behind. Bringing in contractors has proven incredibly difficult and the market now exists for the existing contractors to set the rates. They have no backup plan for the system they’ve created.

This is small scale. This is why the company is in no position to take action against Spencer or anyone else. Imagine if the company attempted to purge contractors now before peak or even after peak. Good luck with that.

 

[It will be fine]

So our terminal currently has two open CSAs. That means that for approximately 1300 stops every day the company is paying an additional $4 per stop above negotiated stop pay. Had one route sit because nobody had a driver available three days ago.

Yesterday they had approximately 20 stops left at 2pm unaccounted for. Text to all contractors offering $8 per stop to get those stops done. All stops on the same road 12 miles from the terminal.

Why does that tell us? It tells us that the “take it or leave it” offer is a smokescreen. Guess what happens next.

You’ll see more and more stops left behind. Bringing in contractors has proven incredibly difficult and the market now exists for the existing contractors to set the rates. They have no backup plan for the system they’ve created.

This is small scale. This is why the company is in no position to take action against Spencer or anyone else. Imagine if the company attempted to purge contractors now before peak or even after peak. Good luck with that.

One of the stories made the claim that FedEx is already over budget on contingency pay for the year. That type of nonsense is a huge drag on earnings. It means the walkouts have far exceeded their expectations and we’re not even at peak yet.

 

[bbsam]

One of the stories made the claim that FedEx is already over budget on contingency pay for the year. That type of nonsense is a huge drag on earnings. It means the walkouts have far exceeded their expectations and we’re not even at peak yet.

Exactly. And it’s exactly what everyone told them would happen.

 

[bacha29]

So our terminal currently has two open CSAs. That means that for approximately 1300 stops every day the company is paying an additional $4 per stop above negotiated stop pay. Had one route sit because nobody had a driver available three days ago.

Yesterday they had approximately 20 stops left at 2pm unaccounted for. Text to all contractors offering $8 per stop to get those stops done. All stops on the same road 12 miles from the terminal.

Why does that tell us? It tells us that the “take it or leave it” offer is a smokescreen. Guess what happens next.

You’ll see more and more stops left behind. Bringing in contractors has proven incredibly difficult and the market now exists for the existing contractors to set the rates. They have no backup plan for the system they’ve created.

This is small scale. This is why the company is in no position to take action against Spencer or anyone else. Imagine if the company attempted to purge contractors now before peak or even after peak. Good luck with that.

This is a matter that will not be settled by 11-25-2022. Do not be surprised it Fat's and Raj first try to drive a very hard bargain with contractors in an effort to literally scare them into taking their deal. This will be undertaken in order to gauge the collective strength of contractor resolve to give as much as it gets. But, most importantly create division between contractors willing to passively take what's offered and those who will not.

I agree. Simply do the required minimum, nothing more. If peak is a colossal failure it will be due to the systemic deficiencies in the core design of the business model itself. Will they simply try to paper over it, completely redesign it leaving you guys with nothing or spin off the entire OPCO into a separate free standing company? In the meantime raising cash should be your first priority because conditions at Ground have never appeared as uncertain as they are right now.

 

[bbsam]

This is a matter that will not be settled by 11-25-2022. Do not be surprised it Fat's and Raj first try to drive a very hard bargain with contractors in an effort to literally scare them into taking their deal. This will be undertaken in order to gauge the collective strength of contractor resolve to give as much as it gets. But, most importantly create division between contractors willing to passively take what's offered and those who will not.

I agree. Simply do the required minimum, nothing more. If peak is a colossal failure it will be due to the systemic deficiencies in the core design of the business model itself. Will they simply try to paper over it, completely redesign it leaving you guys with nothing or spin off the entire OPCO into a separate free standing company? In the meantime raising cash should be your first priority because conditions at Ground have never appeared as uncertain as they are right now.

You would fit in as a FedEx board member!

We are where we are because X has been attempting to drive a hard bargain. They don’t have until 11-25 to do something. Schedule K (supplemental peak season pay structure) is coming out soon. It will be crap again and contractors will simply not accept it.

FedEx will point to it and try to sell it as better than last year while ignoring that they cut the rates in the financial agreements. It’s where a lot of the financial pain for contractors began so there will be a decent amount of scrutiny this year.

The clock is ticking. Maybe they figure it out. Maybe they don’t.

 

[bbsam]

Spencer has over 3500 contractors showing up in Vegas next weekend. That’s more than half the total number of contractors in the US. So far X has tried threats and intimidation. Might be time to try something else.

 

[bacha29]

You would fit in as a FedEx board member!

We are where we are because X has been attempting to drive a hard bargain. They don’t have until 11-25 to do something. Schedule K (supplemental peak season pay structure) is coming out soon. It will be crap again and contractors will simply not accept it.

FedEx will point to it and try to sell it as better than last year while ignoring that they cut the rates in the financial agreements. It’s where a lot of the financial pain for contractors began so there will be a decent amount of scrutiny this year.

The clock is ticking. Maybe they figure it out. Maybe they don’t.

Good. That is exactly where you start by doing only the required minimum. If there is a complete rejection of K or at the very minimum a 90% rejection then Fat's will know that you mean business. But, you and I both know that it will never happen. Fat Freddy is still in a stronger position (but not by much) than the average contractor.

The only long term solution for the company is a complete consolidation of operations into an employer/employee model similar to other carriers. No doubt they will have to cut the dividend and take an enormous charge against earnings lasting many years but at least the matter will finally be settled.

 

[Fred's Myth]

Good. That is exactly where you start by doing only the required minimum. If there is a complete rejection of K or at the very minimum a 90% rejection then Fat's will know that you mean business. But, you and I both know that it will never happen. Fat Freddy is still in a stronger position (but not by much) than the average contractor.

The only long term solution for the company is a complete consolidation of operations into an employer/employee model similar to other carriers. No doubt they will have to cut the dividend and take an enormous charge against earnings lasting many years but at least the matter will finally be settled.

You are master of the inconsistent argument.

 

[yadig]

I think FedEx will go the bacha way and divide and conquer. If they shut the operation down in a massive way it could swing in contractors favor. I don’t see a middle scenario

 

[bbsam]

I think FedEx will go the bacha way and divide and conquer. If they shut the operation down in a massive way it could swing in contractors favor. I don’t see a middle scenario

How would you say they divide? How would you increase my revenue by 30% and let the contractor next to me continue to fail? How do they then deal with the continued massive (if uneven) failure?

 

[HedleyLamarr]

I think FedEx will cave and give the contractors most of what they want. They have no choice; if Ground goes down, the whole company will go with it. We don't have the manpower or vehicles at Express to take Ground's freight.

 

[What'dyabringmetoday???]

I'd like to see Fed-Ex go out of business.

 

[yadig]

How would you say they divide? How would you increase my revenue by 30% and let the contractor next to me continue to fail? How do they then deal with the continued massive (if uneven) failure?

I could see them implementing a productivity pay out or some sort of profit sharing. I don’t think they believe in the amount of contractors failing or walking. Freds a wait n see kinda leader and right now he’s seeing a lot of talk.

 

[bbsam]

I'd like to see Fed-Ex go out of business.

You sound like a FedEx board member.