Originally published by Business Insider | Author Emma Cosgrove
Nearly three months after FedEx quashed an effort by one of its largest delivery contractors to push for better pay and conditions — firing and suing him in the process — a new group has risen to improve the fate of struggling FedEx contractors.
This time, FedEx is on board.
FedEx Ground, the division that handles the majority of the giant's e-commerce business, contracts with 6,000 small businesses for doorstep deliveries. FedEx contractors have had a tough year navigating fuel costs and operational changes. Spencer Patton, the former contractor, wanted the company to cut costly Sunday service, among other changes.
In August, Patton founded a trade group to work on these issues and held an election for officers at his company's Las Vegas conference. Later that month, FedEx severed his contracts and sued him, accusing him of creating a "fictionalized crisis." In October, Patton resigned from the trade group. This week, the remaining officers announced that they'd resigned as well, effectively dissolving the organization.
After Patton's rebellion fizzled, ThinkISP, a think tank founded by eight large contractors (also called integrated service partners, or ISPs) and one former FedEx communications executive, launched at the end of October.
Seeking a fix for the network
Steven Johnson, a ThinkISP founder who runs about 120 FedEx routes in Mississippi and Louisiana, said that apart from Patton's conference and private Facebook groups, contractors largely don't know where to take their issues. Facebook groups and smaller networks of regional contractors have been abuzz all year — but none of that talk had turned into meaningful action, in the eyes of ThinkISP's leadership.
"There were several contractors that were really concerned about the model," Johnson told Insider. "We decided to band together to begin to talk about best practices and things that we can actually do to make the model better."
ThinkISP is recruiting members to join with the benefit of periodic events and biweekly member calls at an annual fee of $95. The organization declined to say how many members have joined.
Where many saw Patton's approach as combative, ThinkISP is collaborating with FedEx. On October 31, the group announced an "information-sharing project" with the company. A FedEx Ground representative likened the arrangement to working with an outside consultant. (Asked if any money is changing hands, both parties said the terms of the deal are confidential.)
Matthew Pickett, another founder, said information ranging from financial health and costs to challenges with staffing and vehicles, for example, would be anonymized and shared with FedEx and contractors.
Moreover, Johnson said the think tank chose its top issues "collaboratively" with FedEx Ground. Among those issues are making Sunday service profitable and further developing a program in which FedEx employees deliver packages in their own vehicles.
ThinkISP's founders said that cooperation is key to getting contractors to sign up as members. The people running these businesses can see that FedEx is working with — and not against — the effort, Johnson said. "That has never happened before."
Lobbying for a better deal
In addition to providing a FedEx-approved avenue for communication and information sharing, the group hired the Washington, DC, lobbying firm Envision Strategy to push for regulatory changes to benefit contractors. A ThinkISP representative said the lobbying efforts have so far been funded by the founders and existing members.
The first goal of the lobbying work is to speed up the payout process for the employee-retention tax credit, which many delivery contractors have taken advantage of.
After the early goals of lobbying and level-setting, Johnson and Pickett said, working on securing discounts for essentials like insurance is on the table in the long term, along with at least 30 other initiatives.