Route Consultant founder and president Spencer Patton explains how FedEx Ground’s delivery network is at risk of collapse due to inflationary pressures.
As FedEx Ground delivery drivers pay the price for rising inflation and high diesel fuel prices, FedEx’s largest contractor sounded the alarm that at least a third of the route system is on the verge of collapse. lapse.
“Really what I’ve advocated and made the public aware of is that we’re in tremendous financial trouble,” Route Consultant founder and president Spencer Patton told FOX Business’ Dagen McDowell on “Mornings with Maria” Friday.
“We’ve seen our fuel prices double in a year. We’ve seen our wages go up, our vehicle costs go up,” Patton continued, “and I’m sounding the alarm that the risk of grid disruption in FedEx Ground is as tall as I’ve ever seen it.”
Patton explained how FedEx Ground outsources 100% of its network to about 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 who are actually delivering all the packages to the United States.”
According to Route Consultant founder and president Spencer Patton, 100% of FedEx Ground drivers are contract workers, not employees Friday, August 19, 2022 “Morning with Mary.” (Getty Images)
The president of Route Consultant has called on FedEx Ground to recognize its contractors and reverse course on allegedly expanding its own profit margins by withholding additional revenue from these small businesses.
Patton urged the company to reconsider past explorations to change status from contractors to franchisees, which could restore “financial balance.”
“The risk is that if we don’t do exactly what FedEx Ground is asking us to do, FedEx Ground, which is the $60 billion business, can say, ‘Sign this deal or we’ll find someone else to do it.’
“We’re just trying to get everyone’s boxes delivered to them,” he continued. “We are the definition of an essential worker.”
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If the problem is not resolved in the short term, FedEx Ground’s largest contractor warns that the crisis could lead to holiday shopping and deliveries.
“Speaking for my own independent business, I need financial help. And 6,000 other FedEx Ground contractors need the same,” Patton pleaded. “We saw that FedEx Ground in its most recent earnings report on June 23, FedEx highlighted a 30% increase in its margins as a result of passing through fuel surcharges on the US consumer, but not passing through these same surcharges to contractors. much those who consume the fuel.”