FedEx Ground has launched its controversial driver contractor grading program, giving it the name “Medals” and outlining in an internal memo how the program is expected to work.
The program is being introduced across the network through March 2, the FedEx Corp. unit (NYSE: FDX) said in the memo, which was released earlier this week and obtained by FreightWaves. Officers authorized to grade service providers will be invited to rollouts in each district to learn more about the process, according to the memo.
The program will affect about 5,000 of FedEx Ground’s 6,000 contractors who provide local pickup and delivery services. It does not affect a smaller group of contractors who manage longer-haul over-the-road services.
FedEx Ground operates exclusively with a nonunion contractor network. Contractors are responsible for their own drivers, vehicles, fuel and other expenses. They get paid on a per-stop basis.
The new process awards contractors Olympic-style medals — gold, silver and bronze — based on a wide range of performance-based criteria. Gold medalists win the opportunity to negotiate a new agreement and the right of first acceptance. A service provider with that classification may also be able to serve more stops, thus earning more money, and contract to provide lucrative “contingency” services in which one contractor steps in temporarily to serve another’s territory.
Silver medalists will have the same negotiation and first-acceptance opportunities as their gold medal brethren.
A bronze medalist may not be offered the chance to negotiate a new agreement unless it can improve its results, and its classification, within three months of receiving the grade, the memo said.
However, a bronze classification does not automatically mean the provider will be disqualified, according to the memo. A higher level of past performance could result in additional negotiating opportunities for bronze medalists, the memo said.
Under the new process, authorized officers will meet monthly with FedEx Ground station managers to review the results
News of the grading system leaked out at the end of January. In response to concerns about media reports that the process was being portrayed as confrontational, FedEx Ground said the Medals process aims to “enhance engagement and transparency” between the company and its provider network.
For years, FedEx Ground has conducted internal evaluations with contractors over their safety and service quality performance. The key component of the new program is an increased focus on efficiency, according to a contractor who asked to remain anonymous.
In a slow economy, the ability of contractors to operate efficiently has become paramount to the company, contractors have said.
The company said it has launched a new “data-driven approach” to communicating contract-specific results via an online dashboard. The results can be used to “identify opportunities as well as recognize service provider companies with superior results,” according to a statement from late January.
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Dustin
From someone who has been linehaul driver to now BC – FedEx needs to stop making this a competitive action & pay up. Lots of good ambitious LH CSPs have had to close up, or downsize their operation just to break even. Don’t turn em against each other – man up handle the issue at hand change with the economy and stop relying on an outdated system that benefits only deep pockets.
Ed
So where does the Driver benefit from this Medal System 🏅? I’m a former FedEx ground driver.Volume of packages extremely high weight 130Ib plus.Name of the game was to push rush n cuss.Saftey was last on the list.Im sorry the driver last on the list.
Trucker
So let me understand, we as drivers are being pushed to the maximum to achieve the unachievable. As a contractor continues to push us harder they will benefit from this new program, while we continue to make almost minimum wage. At some point we as drivers need to be recognized as well. We put our life on the line on a daily basis, dealing with weather, accidents, and just general Chaos on our routes.
michael
Bad idea because then the Contractors will start forcing driveers to remain out longer doing deliveries till all stops are completed just like Amazon and Ups, It will have a negative effect and cause contractors to fire drivers all over and very high turnover rates, Something needs to be built in to this plan as well to also protect drivers by doing something to where they can not be out past 6pm and building that plus % of each route into all this and set it up that a driver can not be let go unless their % is below say 75% delivery rate if not ican guarantee this will fail as im a ex driver
JJ
So, if FedEx is going to also start pushing Express volume to Ground drivers for delivery and combining their operations (read that in another article this week about their plans to cut costs), at what point do they take the final step from contractors to employees? Wonder how close the NLRB and the Teamsters are watching this?
tim
the ground drivers certainly need to be scrutinized more for safety and service , but it is extremely doubtful they will ever run “ the tightest ship in the shipping business .”
Brian Lockett
Contractor have no voice at the end day these guys are employees of fedex , they can’t negotiate there contracts you get three offers a million dollars is a million dollars take one or they will post your routes on the board bid, simply you can’t own something that you can’t control!!
Fred Smith Jr.
The program is a joke. How they can grade in efficiency is laughable when DRO sucks? They’ve stolen from many contractors with Schedule L. Loans are going bad. Banks have stopped lending. A dip in volume and a spike fuel prices = more will perish. Nearly every contractor hates them with a passion and wishes they never entered this business. Running stops for fedex is like working for a charity.