Is FedEx legally obligated to negotiate in good faith with their contractors?

[bacha29]

Could you explain this a bit more? You deducted that amount from what? You mentioned that you held your routes for a while and they were profitable, I’m trying to understand why people are selling so quickly after buying if they are so profitable. I’m seeing many for sale that have only been owned by the seller for a year or so, yet post cash positive profit to the owner of often 15 to 20 percent which is a compelling investment to own and operate. Your posts are extremely informative, thank you for participating on this forum!

Perhaps the reason many are doing so is because they believe that their routes are never going to be worth more than they are right now. And perhaps others are simply no longer willing to put anymore money at risk for the sake of a contract FXG will tell you right to your face they don't consider binding upon themselves.
Please be my quest. Buy 10 routes, buy a 100 routes, buy a thousand routes. You'll be buying them with the belief that their value is going to go up. Trouble is you're buying them from somebody who's equally convinced that they're going to go down.

 

[59 Dano]

I’m seeing many for sale that have only been owned by the seller for a year or so, yet post cash positive profit to the owner of often 15 to 20 percent which is a compelling investment to own and operate.

Some people get in, make their money, and get out. Some people see that kind of return as evidence of a volatile investment and want to leave before it gets wiped out by a bad year. There are as many reasons for getting out as there are people who are getting out.

 

[FedGT]

Could you explain this a bit more? You deducted that amount from what? You mentioned that you held your routes for a while and they were profitable, I’m trying to understand why people are selling so quickly after buying if they are so profitable. I’m seeing many for sale that have only been owned by the seller for a year or so, yet post cash positive profit to the owner of often 15 to 20 percent which is a compelling investment to own and operate. Your posts are extremely informative, thank you for participating on this forum!

I deducted the amount from what they were claiming was year to date gross sales which in turn severely lowered cash flow numbers.

There are many reasons why contractors are selling, and selling much quicker now. The packages have turned us into 1 man furniture delivery companies causing concern of work comp issues as well as drivers that just can’t physically do the job. The terminal I am based out of over the past 2 years has developed an issue where drivers only want 60-80 stops a day or they walk away, I was firm on a route wasn’t a route unless it was 100 delivery stops a day (I don’t know how the contractor now is making money considering threshold numbers are in the tank).
These routes have the potential to make a lot of money and in the right area can grow substantially but it will be one of the hardest employee workforce you will ever have and it is probably one of the most stressful businesses you can own because of that. Unfortunately a lot of drivers cause a lot of problems and insane amounts of stress, finding good ones that stick around is like a needle in the haystack. That is the biggest reason most contractors in my area have sold off.

 

[FedGT]

Could you explain this a bit more? You deducted that amount from what? You mentioned that you held your routes for a while and they were profitable, I’m trying to understand why people are selling so quickly after buying if they are so profitable. I’m seeing many for sale that have only been owned by the seller for a year or so, yet post cash positive profit to the owner of often 15 to 20 percent which is a compelling investment to own and operate. Your posts are extremely informative, thank you for participating on this forum!

I probably wouldn’t touch a route that was owned for a year or less. More than likely they have terrible drivers and/or largely under staffed. Many brokers preach this business as absentee and they run themselves, it is not true. Many people that have the money for these routes are not interested in actually filling in and doing the job or they anger the drivers when they come in demanding what they expect without showing that they can actually do the drivers jobs creating huge morale problems.
There was a set of routes that ended up selling 5 times in a year because no owners were willing to do the work and they couldn’t figure out how to staff it. Only person that made a killing on those routes were the original owner and the broker that sold the same set 5 times in a year.

 

[It will be fine]

I probably wouldn’t touch a route that was owned for a year or less. More than likely they have terrible drivers and/or largely under staffed. Many brokers preach this business as absentee and they run themselves, it is not true. Many people that have the money for these routes are not interested in actually filling in and doing the job or they anger the drivers when they come in demanding what they expect without showing that they can actually do the drivers jobs creating huge morale problems.
There was a set of routes that ended up selling 5 times in a year because no owners were willing to do the work and they couldn’t figure out how to staff it. Only person that made a killing on those routes were the original owner and the broker that sold the same set 5 times in a year.

5 times in a year? Suuuuurre. I’m sure sales were getting done and stood up every other month and FedEx was approving that. Lying makes your point less credible.

 

[burrheadd]

I deducted the amount from what they were claiming was year to date gross sales which in turn severely lowered cash flow numbers.

There are many reasons why contractors are selling, and selling much quicker now. The packages have turned us into 1 man furniture delivery companies causing concern of work comp issues as well as drivers that just can’t physically do the job. The terminal I am based out of over the past 2 years has developed an issue where drivers only want 60-80 stops a day or they walk away, I was firm on a route wasn’t a route unless it was 100 delivery stops a day (I don’t know how the contractor now is making money considering threshold numbers are in the tank).
These routes have the potential to make a lot of money and in the right area can grow substantially but it will be one of the hardest employee workforce you will ever have and it is probably one of the most stressful businesses you can own because of that. Unfortunately a lot of drivers cause a lot of problems and insane amounts of stress, finding good ones that stick around is like a needle in the haystack. That is the biggest reason most contractors in my area have sold off.

Try this

Pay a decent wage

 

[Cactus]

Try this

Pay a decent wage

At Ground? That’s a laugh.

 

[bacha29]

Try this

Pay a decent wage

As I'm sure you've noticed the so called "managers" come on here disclosing vast amount of complex equations, statistics and projections. As impressive as it might sound and appear in the end it all comes down to one simple final achievement...........GETTING SOMEBODY TO WORK FOR NOTHING !

The whole damn operation comes down to that inescapable fact. Sure, some will quote a few wage numbers but in many cases there's no benefits . It's all up front money distorting the actual total compensation relative to how it compares to UPS and the other major carriers.

Sure a few will claim to offer benefits but a closer examination and you'll more often than not discover that they're those flimsy little "bronze" plans that only pay about 60% of billed claims. And those mighty defined contribution 401K plans they brag about? What good are they going to do when in the end there's nothing in them.

If you can find enough people willing to go out there every day bust their rectums and actually give a flying face copulation then as a contractor you'll do ok but as GT alluded to it would appear that an increasing number of labor markets are starting to run out of them.

And despite the best efforts of contractors to promote and advertise their employment, the word's out on it. The real word. It's a ball busting, joint killing, dead end job.

 

[FedGT]

5 times in a year? Suuuuurre. I’m sure sales were getting done and stood up every other month and FedEx was approving that. Lying makes your point less credible.

Original contractor sold, next guy lasted 3 months, he sold to a stock broker that offloaded in less than 2.5 months, went to the next guy who was split in between two terminals and ran a crap operation (FedEx gave him 30 days to sell after 5 months) now it is with the current guy. Sorry sold 4 times 5 different owners were there in a year. I don’t have anything to lie about, I have been straight up with my posts from starting on here. If you don’t want to believe me then don’t but that is what has happened.

 

[FedGT]

Try this

Pay a decent wage

Wage wasn’t the issue, that is ignorance. The largest problem was entitlement. People thinking they should make what they were making but wanted to take off as much time as they wanted with no heads up, work half days, do no pickups, and bitch constantly. Money isn’t the answer. I am sure you never ran a business because anyone who has knows that giving someone a raise, bonus, etc only shuts up a pain employee for a couple days or a couple weeks if you are lucky.

 

[bacha29]

Original contractor sold, next guy lasted 3 months, he sold to a stock broker that offloaded in less than 2.5 months, went to the next guy who was split in between two terminals and ran a crap operation (FedEx gave him 30 days to sell after 5 months) now it is with the current guy. Sorry sold 4 times 5 different owners. I do t have anything to lie about, I have been straight up with my posts from starting on here. If you don’t want to believe me then don’t but that is what has happened.

I believe you. What you've got in there now are contract flipping speculators, The trucking version of house flippers. If it gets out of control it might serve to destabilize the entire network.

 

[bacha29]

Wage wasn’t the profit, that is ignorance. The largest problem was entitlement. People thinking they should make what they were making but wanted to take off as much time as they wanted with no heads up, work half days, do no pickups, and bitch constantly. Money isn’t the answer. I am sure you never ran a business because anyone who has knows that giving someone a raise, bonus, etc only shuts up a pain employee for a couple days or a couple weeks if you are lucky.

That's why you need three guys on every truck. One coming, one driving, one leaving. Word of mouth still travels quickly and once a given job with a given employer gets bad word of mouth nothing will ever change no matter what you try to do to improve the quality of the employment.

 

[FedGT]

I believe you. What you've got in there now are contract flipping speculators, The trucking version of house flippers. If it gets out of control it might serve to destabilize the entire network.

I have only seen 1 of those and it was recently. No one except the original owner and broker made money in the situation I was talking about. 2nd guy didn’t lose out too much but the 3rd guy was a ball of stress 24/7 and was sure he was going to lose the routes from X pulling the contract. I don’t know quite how much he lost but I guarantee it was in the 6 figures.

 

[bacha29]

I have only seen 1 of those and it was recently. No one except the original owner and broker made money in the situation I was talking about. 2nd guy didn’t lose out too much but the 3rd guy was a ball of stress 24/7 and was sure he was going to lose the routes from X pulling the contract. I don’t know quite how much he lost but I guarantee it was in the 6 figures.

I think we could agree on this. It's no longer a stable investment/economic platform. Anymore you have to be located in exactly the right part of the country and in the most advantageous set of demographics.

 

[burrheadd]

Wage wasn’t the issue,

Keep believing that

It’s a lot easier to walk away from a crappy job that doesn’t pay squat and no benefit’s

Than it is one that does

 

[FedGT]

We have definitely gone at each other numerous times through the last couple years. Although I still don’t have quite the disdain towards X as you do, I still believe it can work but yes it is much more likely to be successful in the right areas. It could also be made much easier if the furniture delivery business was not part of Ground and if X got off your back more.

 

[FedGT]

Keep believing that

It’s a lot easier to walk away from a crappy job that doesn’t pay squat and no benefit’s

Than it is one that does

Yeah since Express doesn’t have just as awful of a turnover rate.

 

[FedGT]

Or amazon, or on track, or about every courier company, or OTR company, or pretty much anyone except UPS that has a driving workforce...............I guess you got me, huh?

 

[specter208]

Can a FedEx contractor quit and take all his trucks and employees with him so to speak? What happens to those packages pending delivery?

 

[It will be fine]

Can a FedEx contractor quit and take all his trucks and employees with him so to speak? What happens to those packages pending delivery?

You have to provide a 30 day notice or you get billed for the cost to service your area.