NASHVILLE, Tenn., July 20, 2022 /PRNewswire/ — In a video appeal and supporting letter Spencer Patton, Founder + President of Route Consultant, urged FedEx Ground to provide substantial financial remedies to its base of 6,000+ Contracted Service Providers (CSPs) by November 25, 2022.
The FedEx Ground pickup & delivery (P&D) and linehaul networks are serviced by contracted logistics companies, and FedEx Ground relies entirely on the service success of these companies for its day-to-day operations. Mr. Patton notes in his letter that the current CSP financial model is collapsing due to substantial increases in the cost of fuel, labor, and vehicles over the past 12 months:
“Written from the desk of one of the largest contractors in the United States, believe me when I write that the situation is far more dire than the general public currently understands. Not a single day passes without my phone ringing with the story of yet another contractor who is financially collapsing under the weight of these dramatic cost changes that have gone entirely unaddressed by FedEx Ground in 2022.”
Mr. Patton points to declining service levels, an increase in under-serviced or unserviced territories across the United States, and a soaring level of CSP default rates as evidence of the current financial stress within the network.
The video and letter make two clear requests of FedEx Ground: first, an increase in stop pay for P&D CSPs of $0.50 per stop and an increase of $0.20 per mile for linehaul CSPs; secondly, the letter asks for FedEx Ground to reevaluate its commitment to Sunday deliveries. Of Sunday deliveries, Mr. Patton says, “By our estimates, Sunday deliveries are costing FedEx Ground upwards of $500 million in earnings drag. That $500 million figure is getting worse, not better. Likewise, Sunday deliveries erased more than one-third of CSP profit margins in less than one year’s time. In parallel fashion, that margin erosion is worsening, not improving.”
Mr. Patton closes his letter noting that the CSP base will meet for their annual Expo in Las Vegas this year, on August 20 and 21, and will elect a committee of 10 CSPs to speak as a unified voice to FedEx Ground.
Route Consultant is the leader in education for owners of FedEx Ground and Amazon DSP logistics operations. The Route Consultant team also facilitates the greatest share of transactions in the space.
Rooted in experience, the Route Consultant leadership team runs an active contracting organization (Patton Logistics, Inc.)—including a fleet of 275 trucks and 225 employees across the United States—and is the largest service provider to FedEx Ground.
Route Consultant offers consulting services to new and experienced professionals in the logistics community. These services include acquisition strategy, business valuations, operations efficiency, post-close support, compliance review, and more. Finally, Route Consultant maintains an exclusive portfolio of routes and runs for sale across the United States.
Spencer Patton video, letter to FedEx Ground: https://www.routeconsultant.com/updates/route-consultant-founder-spencer-patton-calls-for-network-wide-financial-remedies
Video Conference – Wednesday 7/20, 3:30pm CT: https://www.routeconsultant.com/upcoming-events/weekly-webinar-072022
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SOURCE Route Consultant