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[bacha29]

And you think Wall Street investors think all of that is a good thing?

If the model is unsustainable it either has to change or be discarded. That is exactly the point and that is what should give investors pause: uncertainty going forward.

Wall Street doesn't give a rodent's rectum about FXG contractors. They've made their money and moved on. Earlier this week Bernstein threw a couple of jacks under the stock price and tried to move it but it wouldn't budge.

Again it comes back to the fact that it's a network and business model that was never designed to do what is being expected of it now. It was designed to serve B to B and support Roadway's LTL network. Look at it now. it's trying to be all things to all people. A setup drowning in duplication in the form of all these different operating units none of which can provide any meaningful support to the other. Not to mention wasting boatloads of oil.

Challenging headwinds? What does that mean? It means that they've taken the current Ground setup as far as they can take it and can see that it's beginning to collapse.....and Wall Street doesn't like what it's seeing.

 

[bbsam]

Wall Street doesn't give a rodent's rectum about FXG contractors. They've made their money and moved on. Earlier this week Bernstein threw a couple of jacks under the stock price and tried to move it but it wouldn't budge.

Again it comes back to the fact that it's a network and business model that was never designed to do what is being expected of it now. It was designed to serve B to B and support Roadway's LTL network. Look at it now. it's trying to be all things to all people. A setup drowning in duplication in the form of all these different operating units none of which can provide any meaningful support to the other. Not to mention wasting boatloads of oil.

Challenging headwinds? What does that mean? It means that they've taken the current Ground setup as far as they can take it and can see that it's beginning to collapse.....and Wall Street doesn't like what it's seeing.

That’s exactly what I said. They have a mess on their hands with now real solutions. The model has to be fixed or scrapped. Neither is a scenario that Wall Street will find comfort in.

 

[MAKAVELI]

That’s exactly what I said. They have a mess on their hands with now real solutions. The model has to be fixed or scrapped. Neither is a scenario that Wall Street will find comfort in.

Sometimes the most painful solution is ultimately the best long term solution.

 

[bacha29]

And you think Wall Street investors think all of that is a good thing?

If the model is unsustainable it either has to change or be discarded. That is exactly the point and that is what should give investors pause: uncertainty going forward.

Dano is right in the sense that a complete restructuring would require an enormous charge against earnings lasting several years perhaps a decade. If past history is any indication they'll try to do a little bit of window dressing here and there . At the same time they know that contractors are trapped for the reasons earlier mentioned and they will point to the fact that they have made it abundantly clear time and time again that the parent firm is not in the business of creating enterprise value for third party contractors. Therefore, they're not going to feel bad for them.

Thirty seven years ago when Dan Sullivan started Roadway Package System the Soviet Union was still in existence and the internet strictly the domain of the US military. Here we are 2022 the entire planet is wired, consumer goods are but a click away, the Empire strikes back in Ukraine, China is cuffing around Taiwan the motherlode of microchips yet Fat Freddy's ground network has changed little from what it was when it started and chances are it will change very little going forward..... I just don't see how it can change much.

 

[bbsam]

Dano is right in the sense that a complete restructuring would require an enormous charge against earnings lasting several years perhaps a decade. If past history is any indication they'll try to do a little bit of window dressing here and there . At the same time they know that contractors are trapped for the reasons earlier mentioned and they will point to the fact that they have made it abundantly clear time and time again that the parent firm is not in the business of creating enterprise value for third party contractors. Therefore, they're not going to feel bad for them.

Thirty seven years ago when Dan Sullivan started Roadway Package System the Soviet Union was still in existence and the internet strictly the domain of the US military. Here we are 2022 the entire planet is wired, consumer goods are but a click away, the Empire strikes back in Ukraine, China is cuffing around Taiwan the motherlode of microchips yet Fat Freddy's ground network has changed little from what it was when it started and chances are it will change very little going forward..... I just don't see how it can change much.

I don’t see how you keep missing what I’m saying. It’s very possible that it can’t change much. But if they are unwilling to pay what is required to sustain the model, then the model has to be scrapped. And I don’t think little “window dressing” solutions are going to work anymore. Contractors have seen it before. Many are at the point where walking away is the best solution.

Again. Whether out of financial ruin or protest, before the year is out, trucks will be parked.

 

[floridays]

I don’t see how you keep missing what I’m saying. It’s very possible that it can’t change much. But if they are unwilling to pay what is required to sustain the model, then the model has to be scrapped. And I don’t think little “window dressing” solutions are going to work anymore. Contractors have seen it before. Many are at the point where walking away is the best solution.

Again. Whether out of financial ruin or protest, before the year is out, trucks will be parked.

I hope the best for your personal situation.

 

[bacha29]

I don’t see how you keep missing what I’m saying. It’s very possible that it can’t change much. But if they are unwilling to pay what is required to sustain the model, then the model has to be scrapped. And I don’t think little “window dressing” solutions are going to work anymore. Contractors have seen it before. Many are at the point where walking away is the best solution.

Again. Whether out of financial ruin or protest, before the year is out, trucks will be parked.

More likely financial ruin that protest. In simple terms. Cut your losses and get out. Nobody is coming to rescue you and with each passing day you're one day further away from the best day to pack it in.

I harken back to what the first terminal manager I reported to told me and these were his exact words..."I admit it. It's a rotten deal but nevertheless you signed it. But, you might be able to survive by doing three things. Keep borrowed money to a minimum and limit your exposure to risk and to variable costs to only that which you cannot avoid".

I'm confident that many of those distressed contractors out there failed to see the trappings of this little con and instead fell victim to one of the most basic of human behavioral traits.....greed.

 

[bbsam]

More likely financial ruin that protest. In simple terms. Cut your losses and get out. Nobody is coming to rescue you and with each passing day you're one day further away from the best day to pack it in.

I harken back to what the first terminal manager I reported to told me and these were his exact words..."I admit it. It's a rotten deal but nevertheless you signed it. But, you might be able to survive by doing three things. Keep borrowed money to a minimum and limit your exposure to risk and to variable costs to only that which you cannot avoid".

I'm confident that many of those distressed contractors out there failed to see the trappings of this little con and instead fell victim to one of the most basic of human behavioral traits.....greed.

Lol. Damn son. You are ridiculously slow! Nobody is suggesting anyone is going to be saved! I’m content with it all going up in flames if that’s what happens. All I’m saying is that X has to do something. There is no papering over this mess anymore and investors have to be getting that point.

X will do something. One way or another. There is no kicking this problem down the road.

What’s your opinion? Fix the model or scrap it. There is no third option. This is no longer about fooling contractors. They will have investors looking closely and digging in.

Either way X will have massive changes to make, changes they had no intention of making 48 hours ago.

 

[floridays]

Lol. Damn son. You are ridiculously slow! Nobody is suggesting anyone is going to be saved! I’m content with it all going up in flames if that’s what happens. All I’m saying is that X has to do something. There is no papering over this mess anymore and investors have to be getting that point.

X will do something. One way or another. There is no kicking this problem down the road.

What’s your opinion? Fix the model or scrap it. There is no third option. This is no longer about fooling contractors. They will have investors looking closely and digging in.

Either way X will have massive changes to make, changes they had no intention of making 48 hours ago.

How do they fix the model?
I have my ideas, I'm interested in yours.

None of the fixes I see are ones that FedEx would even contemplate.

That being said, I don't know if the contractors would be able fulfill it.

 

[bbsam]

How do they fix the model?
I have my ideas, I'm interested in yours.

None of the fixes I see are ones that FedEx would even contemplate.

That being said, I don't know if the contractors would be able fulfill it.

I’m not even sure they believe there is a problem.

I think the only shot they have is probably where they’ve possibly always been trying to get to: total autonomy of the contractors. Contractors would have their own DOT number and run all local operations on their own.

The problem is that X would have to put up a lot of money to those contractors and basically cede control. Contractors on the other hand would be compensated at such a point that they’d WANT to do everything in their power to keep that contract.

Honestly at this point I think the relationship between X and contractors is so severely strained that I don’t know how it gets fixed.

 

[floridays]

I’m not even sure they believe there is a problem.

I think the only shot they have is probably where they’ve possibly always been trying to get to: total autonomy of the contractors. Contractors would have their own DOT number and run all local operations on their own.

The problem is that X would have to put up a lot of money to those contractors and basically cede control. Contractors on the other hand would be compensated at such a point that they’d WANT to do everything in their power to keep that contract.

Honestly at this point I think the relationship between X and contractors is so severely strained that I don’t know how it gets fixed.

I think we are on the same page. On that page would contractor's have the ability to service other accounts or would you be content with an all eggs in one basket agreement again?

 

[bbsam]

I think we are on the same page. On that page would contractor's have the ability to service other accounts or would you be content with an all eggs in one basket agreement again?

I think what they really want is several local trucking companies that run LTL to branch into contracting with them. The problem is that those companies can tell them to pound sand when their crappy pay structure shows up in “negotiations”.

 

[floridays]

I think what they really want is several local trucking companies that run LTL to branch into contracting with them. The problem is that those companies can tell them to pound sand when their crappy pay structure shows up in “negotiations”.

With that they haven't solved anything, just kicking the can.

 

[MAKAVELI]

I’m not even sure they believe there is a problem.

I think the only shot they have is probably where they’ve possibly always been trying to get to: total autonomy of the contractors. Contractors would have their own DOT number and run all local operations on their own.

The problem is that X would have to put up a lot of money to those contractors and basically cede control. Contractors on the other hand would be compensated at such a point that they’d WANT to do everything in their power to keep that contract.

Honestly at this point I think the relationship between X and contractors is so severely strained that I don’t know how it gets fixed.

FedEx wants their cake and eat it too. They haven't figured it out yet it's not possible long term.

 

[bbsam]

With that they haven't solved anything, just kicking the can.

Right. That’s why I don’t see how they fix it. Truly a mess of their own making and nobody is going trust anything coming out out of their collective pie holes going forward.

 

[Cactus]

Again it comes back to the fact that it's a network and business model that was never designed to do what is being expected of it now. It was designed to serve B to B and support Roadway's LTL network. Look at it now. it's trying to be all things to all people. A setup drowning in duplication in the form of all these different operating units none of which can provide any meaningful support to the other. Not to mention wasting boatloads of oil.

All this chaos has one deep seated reason, to keep the union out.

If Wall Street can't see that Fred has his head so far up his ass, well then God help them.

 

[floridays]

@59 Dano I don't want to rub this in, I just want to refresh your memory.

You have claimed you are a christian, I have and am a believer as well.

That said, years ago a lot of these claims were made, you a company lined cheerleader called people crazy or worse.

It's all searchable.

“But of the tree of the knowledge of good and evil, thou shalt not eat of it: for in the day that thou eatest thereof thou shalt surely die.” Genesis 2:17

Adam lived 930 years, he didn't die physically when he ate. Nonetheless he was dead that day.

Kinda the same thing with Ground and Express.

You aren't so smart today are you?
It took awhile but it sought you out.

FedEx Express is in the process or moving freight to ground, ground is in the process of imploding.

Just my view, I'm a patient man.

 

[bacha29]

Lol. Damn son. You are ridiculously slow! Nobody is suggesting anyone is going to be saved! I’m content with it all going up in flames if that’s what happens. All I’m saying is that X has to do something. There is no papering over this mess anymore and investors have to be getting that point.

X will do something. One way or another. There is no kicking this problem down the road.

What’s your opinion? Fix the model or scrap it. There is no third option. This is no longer about fooling contractors. They will have investors looking closely and digging in.

Either way X will have massive changes to make, changes they had no intention of making 48 hours ago.

It is not going to collapse. It is not about to undergo a restructuring . Either distressed contractors find a way to keep up or they'll find somebody who can. That has always been their attitude and it will not change.

 

[bbsam]

It is not going to collapse. It is not about to undergo a restructuring . Either distressed contractors find a way to keep up or they'll find somebody who can. That has always been their attitude and it will not change.

So they’ll let the stock tank. They’ll let the brand be shredded. Ok. That’s definitely an option.

Care to put a monetary wager on that?

 

[HedleyLamarr]

The brand is already shredded which is why I no longer wear anything which might identify me as a FedEx employee outside of working hours.
Based on what Sam is saying, they will have no choice but to pay the contractors more, but a crisis will probably have to happen before they do.
So the contractors are talking big right now, but will they actually have the guts to walk out?