FedEx Ground contractors demand inflation help prevent shipment collapse: ‘Huge financial stress’

A FedEx employee loads a cart with packages for deliveries on August 5, 2022 in New York City. (Photo by Robert Nickelsberg/Getty Images)

As FedEx Ground Delivery drivers are paying the price for soaring inflation and high diesel fuel prices, FedEx’s biggest contractor has sounded the alarm that at least a third of the roads system is on the edge of the ‘collapse.

“Really, what I’ve been advocating for and what I’ve really made the public aware of is that we’re in tremendous financial distress,” Route Consultant founder and president Spencer Patton told Dagen McDowell. from FOX Business on “Mornings with Maria” Friday.

“We’ve seen our fuel prices double in a year. We’ve seen our wage rates go up, our vehicle costs go up,” Patton continued, “and I’m sounding the alarm that the risk of grid disruption at FedEx Ground is also as high as I’ve ever seen it.”

Patton explained how FedEx Ground outsources 100% of its network to approximately 6,000 small business owners who manage an average of 10 to 25 employees.

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“The person who comes to your door wearing a FedEx uniform and driving a FedEx truck is not actually a FedEx Ground employee,” the industry leader said. “And they’re the ones that actually deliver all the packages across the United States.”

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According to Route Consultant Founder and President Spencer Patton, 100% of FedEx Ground drivers are contractors, not employees, during “Mornings with Maria” on Friday, Aug. 19, 2022. (Getty Images)

Route Consultant President Asked FedEx Ground To Recognize Its Contractors And Reverse What Would Have Been increase own profit margins by withholding additional revenue from these small businesses.

Patton urged the company to reconsider past explorations to upgrade the status of entrepreneurs to franchisees, which could restore “financial balance”.

“The risk is that if we don’t do exactly what FedEx Ground asks us to do, then FedEx Ground, being the $60 billion company, can say, ‘Sign this deal or we’ll find someone else. Who’s gonna do it. “”

“We’re just trying to get everyone’s boxes delivered,” he continued. “We are the definition of an essential worker.”

If the problem is not resolved in the short term, FedEx Ground’s largest contractor warns the crisis could continue into the holiday season shopping and deliveries.

“As I speak on behalf of my own independent business, I need financial assistance. And some 6,000 other FedEx Ground contractors need the same,” Patton pleaded. “We saw FedEx Ground in its last earnings report on June 23, FedEx highlighted a 30% increase in its margins due to the pass-through of fuel surcharges to the US consumer, but not the pass-through of those same surcharges on subcontractors, the very ones who consume the fuel.”

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