(TheRedAlertNews.com) – FedEx Ground, one of the main subsidiaries of the FedEx Corporation, may be about to collapse due to the “enormous financial stress” that its contractors are experiencing, says its largest contractor, who has sounded the alarm.
According to Route Consultant, the delivery drivers of FedEx Ground, who are contractors rather than employees, are feeling the brunt of soaring inflation, which includes the sky-high price of diesel fuel.
So much so that at least one-third of the ground package delivery company’s route system is on the brink of collapse.
“What I’ve been advocating and really making the public aware of is that we’re in enormous financial distress,” Spencer Patton, the Route Consultant founder and president, has told Fox News.
“We’ve seen our fuel prices double in a year. We’ve seen our wage rates up, our vehicle costs up, and I’m sounding the alarm that the risk of network interruption in FedEx Ground is as high as I’ve ever seen it,” he elaborated.
Patton revealed that 100% of FedEx Ground’s drivers are contractors. Those are about 6,000 owners of small businesses, each one of whom typically manages an average of 10-25 employees.
“The person coming to your door wearing a FedEx uniform, driving a FedEx truck is not actually a FedEx Ground employee. And they’re the ones that are actually delivering all of the packages across the United States,” the head of Route Consultant pointed out.
Patton urged FedEx Ground to make a U-turn on its plans to boost its profit margins but keep additional revenue from its contractors’ small businesses. He also argued it should reconsider altering the contractors’ status to franchisees.
“The risk is that if we don’t do exactly what FedEx Ground asks us to do, then FedEx Ground, being the $60 billion business, can say, ‘Sign this agreement or we’ll find somebody else that will. We’re just trying to get everybody’s boxes delivered. We’re the definition of an essential worker,” the industry leader insisted.
He emphasized that the delivery crisis could hit the winter holiday season unless the issue is resolved swiftly.
“We’ve seen FedEx Ground in their most recent earnings report on June 23, FedEx highlighted a 30% increase to their margins as a result of passing through fuel surcharges to the U.S. consumer, but not passing through those same surcharges to contractors. The very ones consuming the fuel,” Patton stressed.
INFLATION NATION: 'We've seen our fuel prices double in a year. We've seen our wage rates up, our vehicle costs up, and I'm sounding the alarm that the risk of network interruption in FedEx Ground is as high as I've ever seen it.' https://t.co/auRxbuWcK8 pic.twitter.com/06jBNf10y5
— Fox News (@FoxNews) August 21, 2022