A trade association formed in August to represent the interests of driver contractors at parcel delivery firm FedEx Ground disbanded on Friday amid allegations by the group’s founder that the FedEx Corp. unit threatened to strip its leaders of their contracts if they kept the group alive.
In a statement distributed Thursday night, the 10-member leadership committee of the Trade Association for Logistics Professionals (TALP) said the group was not the “appropriate vehicle” to promote effective dialogue between the FedEx (NYSE: FDX) unit and the 6,000 nationwide delivery contractors who operate exclusively for it. The group said that “better options exist” to meet its objectives. It did not elaborate.
In the statement, the group called on contractors to work collegially with FedEx Ground to achieve mutually beneficial outcomes. An undetermined number of contractors have voiced concerns about their financial situation amid rising costs and flattening delivery demand.
FedEx Ground has acknowledged the contractors’ concerns and has renegotiated an unspecified number of contracts, most of which run for 12 to 18 months, to provide some degree of financial cushion.
According to a person familiar with the matter, FedEx Ground has also offered an unspecified number of contractors more compensation to support their peak-season investments than they had originally received. Under the “Schedule K” formula, contractors receive additional payments from the unit to ensure they have adequate equipment and staff to manage holiday volume spikes.
The new funding came out of nationwide discussions between the unit and many of its contractors and may have been influenced by more optimistic holiday demand projections from several large retailers that are FedEx Ground customers, the person said.
The trade group’s decision to disband came as a surprise to its founder, Spencer Patton, who resigned from the group on Oct. 25. In an email to FreightWaves on Friday, Patton said he was not consulted prior to the announcement and that the remaining officials made an “independent decision” to resign from the group, effectively terminating it.
He had hoped his departure would lead to constructive dialogue between the company and the group. However, FedEx Ground made it clear it would not talk with any collectively organized contractor group, Patton said. The unit’s CEO, John Smith, had stated as much a couple of months ago.
In his email, Patton said the unit “actively intimidated” committee members by warning they had a “target on their backs and threatening their contracts if they remained members.” FedEx Ground declined comment on the TALP actions or Patton’s allegations.
The group had approximately 600 members at the time Patton resigned.
In late August, FedEx Ground stripped Patton, who is based in Nashville, Tennessee, of his 10-state route network. The unit said at the time that its action was based on Patton’s businesses’ “continued failure” to meet the terms of their service agreements with FedEx Ground, despite the company providing them opportunities to do so.
Patton and the company had been at loggerheads since the summer, when Patton began a high-profile effort to call attention to the financial plight facing many contractors. He had warned that, unless FedEx Ground increased the compensation to its contractors, about one-third would have trouble surviving through the peak season or the balance of 2022.
It appears, however, that the vast majority of contractors will remain operational at least through peak. Executives at the parent said in mid-September that 96% of contractors had agreed to “Schedule K” compensation.
It is unclear how many contractors were TALP members. According to the person, TALP fell off many contractors’ radar screens after Patton was stripped of his routes. In addition, contractors who run routes for companies such as Amazon.com Inc., DHL e-Commerce and OnTrac said they are facing the same financial squeeze as FedEx Ground contractors, the person said.
Robert
We had a guy like Spencer Patton when we opened our RPS terminal in 1994. First thing he did was put his route up for sale. Declined to come to contractor roundtables because it would be better for the RPS managers if he didn’t. Caused major problems at the terminal, didn’t stop until a young contractor invited him out into the parking lot. Put a temp driver who couldn’t do the route on it and dared RPS to take his contract away. Ended up getting his contract revoked, sued for $50,000; then got his plow cleaned in court by RPS attorneys. All he ended up getting was a settlement from the contractor work accident insurance company for an alleged elbow injury. No one is going to win against FEG and few battle to a draw.
Dale durrance
3PL is a mistake by our DOT. THEY HAVE BEEN GIVEN A LICENSE TO STEAL FROM THE TRUCKING INDUSTRY!
Cornelius
FedEx Ground, FedEx Express and FedEx Freight none of these companies care anything about you are your family, FedEx Express is number one in caring about their people are there families they only worry about packages your only a number to them not a employee…I know FedEx Ground treat there employees like trash. I can go on and on but it won’t help because they will only get richer and richer by the day and the employees will be broken down zombies with bad backs,shoulders,knees and more…. Never seen a multi billion dollar company with the most unsafe vehicles. These companies get sooo big until they forget who makes them billions of dollars
Shane
Drivers employed by contractors with FedEx are the worst group on the roads. Pushed to extreme limits causes horrendous decisions involving others. Near misses Monday through Saturday nights. This comes from the very top, as most companies culture comes from.
Randy Edenfield
Ok so what about us package handlers we are the lowest man on the totem pole I mean you got ppl doing less than us and making more money it’s bogus Iam a package handler and 15-16$ an hour is not enough for me when Ive been told I’m the best they got for all things on sort I’m the guy they go to when managers aren’t around to figure out what to do
Don E Bouge
I was a contractor for 15 years for Fedex ground. Started out good an independent contractor. Then after about 5 years we went to be called isp. Independent Service Providers. Thats when the bottom fell out. I stayed in there, had to , had debt that needed to pay off. But alot of times stole from Peter to pay paul. Try to talk to fedex to go back to renegotiation but failed to help out. They are the worst Company to do contractor business with. Wish all the contractor’s the best of luck because there going to need it
BC
First I would like to state that Spencer Patton has never been a representative for all 6000 contractors. Contractors can work with FedEx themselves. They do not need a third party involved. It’s that simple.
Second, his business, Route Consultant, helping people buy routes for sale by contractors with FedEx Ground is a business that is not needed. These routes can be purchased without the added expense of paying a third party to help purchase the route. I have never, nor would I ever use a third party to purchase routes with FedEx Ground when you can work out an agreement with the contractor selling his routes yourself, without having to pay a third party to do so. And there are a lot of them out there soliciting this to the contractors. It is absolutely a waste of money. It’s a rip off. You do not need a third party company to purchase routes, period.
Third, I would like to know how all these people that set up these businesses to help purchase operations with FedEx Ground gets all of the contractors emails and start spamming our email boxes with their services making it sound like it is the only way to purchase routes. And others emailing soliciting us that they can help contractors get their ERC credit and that FedEx prefers we use them. That is an out right lie. FedEx has not, nor ever preferred that we use some outside business to handle our business, period. These people are just scammers.
Mark
Hey Spencer Patton. Shirl in Northern Kentucky says she’d like paid for the runs you never paid her for when you bought her Fedex Ground Contract.
Your a real upstanding guy to ruin a woman that just had her better half pass away…..