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.
David
I work for FedEx Freight as a Road Driver, I have 26 years driving experience & 29 1/2 years with the company. I am not a spokesman for FedEx Freight nor will I ever be. If it is broke which is the best way to fix it? It sounds like QDM, Quality Driven Management. I don’t know that much about it but according to FedEx Corporate it works. I am not pointing the finger at anyone but with the economy like it is, fuel prices sky high along with everything else it would be good I would think to offer ways to fix the problem. Trust me it works like this, my way (FedEx) or the highway. I wish all of you the very best at what you do, it has to be tough.
Richard
Indie, well said. I’ve been involved with FDX Ground since the RPS days of the 90s….it gets worse yearly. We are the redheaded stepchild of national logistics.
Richard
Charlie
There is nothing controversial about this medals program. Its aim and goal is to improve the drivers and contractors to a high level. Poor preforming contractors that think they can disregard the rules of safety among other things, to make a quick buck and affect the basis what FedEx stands for will eventually let go; but they all have the tools available to them to succeed. In all companies they’re those that are high achievers that strive to do the best, and those that demand they should get rewarded for doing nothing. Businesses that award those that do nothing is a recipe for disaster, that is a fact.
FedEx and like most companies around the world has to restructure itself, because of lack of earnings it made over the 2022 Christmas time, that is what a business does if it wants to be successful. Loosing poor preforming contractors maybe one of those things. CSA scores are a big culprit for this medals system, all transportation companies are aware of what this means, and how it affects them. I’m in no way against FedEx in this program, cutting ties to those dragging the company down is just good business practice.
Doug Kelley
The best thing Fed ex ground can do for its customer base is completely go out of business.
Indie
You drivers have no idea what contractors go through. All you do is clock in, work, then clock out. You don’t have to deal with 365 days 24/7 BS..multiple drivers not showing up to work, or quitting and needing to hire and train new ones, DRO bs, complaints from FX and customers prob caused by you, and believe me FX complains the most out of anybody. They’re graded just like we are BUT they can push their mistakes or inefficiencies off to us that we have to fight hard against. And if a vehicle breaks down who do you call to take care of it? Or worst if all accidents and the behind the doors sh*t we have to deal with when that happens. The FedEx Independent relationship with contractors is the most abusing independent relationship I’ve ever seen and heard of in 26 years of being independent. Tried it for 1 year and I WAS OUT! Very poor quality of life. A day of reckoning is coming to FedEx you mark my word.