spencer patton

Spencer Patton, Founder and President of Route Consultant and Patton Logistics, Inc.

The Brentwood-based contractor company Route Consultant is FedEx Ground’s largest contractor in the United States, and its founder and president is urging the transport company to provide financial remedies to its base of 6,000-plus Contracted Service Providers (CSPs). 

Founder and President of Route Consultant, Spencer Patton, has written a letter and released a video urging FedEx Ground officials to increase compensation for CSPs.

“Written from the desk of one of the largest contractors in the United States, believe me when I write that the situation is far more dire than the general public currently understands," Patton writes. 

"Not a single day passes without my phone ringing with the story of yet another contractor who is financially collapsing under the weight of these dramatic cost changes that have gone entirely unaddressed by FedEx Ground in 2022.” 

He also mentioned that he feels FedEx Ground has a history of addressing difficult circumstances. 

“As recently as 2020,” he writes, “during the COVID-19 pandemic, FedEx Ground offered a flat, across-the-board 6-month compensation increase for its contractors in order to overcome the extraordinary conditions of that year.” 

Patton said that since 2020, the changes for contractors have been even more monumental, but claims no financial adjustment has been made.

In the subsequent video, Patton said that “contractors in general are suffering to a degree that is largely unseen by the general public and to some degree FedEx Ground themselves.” 

Patton says Route Consultant’s fuel costs have doubled in less than a year, wage costs have soared and truck costs, as well as lack of truck availability, have spiked. He adds the current CSP financial model is collapsing. 

Within the letter, Patton specifically requested two things from FedEx.

He asked for the pickup and delivery network, a $0.50-per-stop pay increase on all FedEx Ground and e-commerce stops, and for the linehaul network, a $0.20-per-mile pay increase on all solo and team runs and a 10 percent increase in compensation for spot runs. 

He asked that all negotiations and decisions be made by Nov. 25, 2022.

At the end of the letter, he explained that the CSP base will be meeting for their annual Expo in Las Vegas, Nevada from Aug. 20-21, and that they will elect a committee of 10 CSPs to speak as a unified voice to FedEx Ground.

During a live Q&A session on Wednesday afternoon, Patton spoke more about his responsibility to the small businesses with which he works. 

“I have a tremendous vested interest here,” he said. “We’re one of the largest contractors in the United States. There is no one who wants to see routes do better than I, but I also serve and work to steward these small businesses.

"I want to make sure that we do a great job representing them and advocating for their interests in a time where we can support it from a business space and a data perspective.”

He later explained that he wants this message to be seen as an effort to find a common resolution, not an adversarial one, and that it is done to achieve progress. 

“I think there’s a lot of incentive to act because there isn’t a network without their contractors… FedEx Ground’s obligation first and foremost is to its shareholders," Patton added. "It is to make a profit and return capital.

“We are the wheels that make that happen, and the vehicle doesn’t roll without the wheels. So we’ve got to find a way to have a win-win dynamic that has defined this business for decades.”

In response to Patton's claims, FedEx addressed the climate they find themselves in at present and their plan to address some of Patton's frustrations. 

“FedEx Ground’s entrepreneurial business model comprises more than 6,000 service provider businesses, which earned an average revenue of $2.3 million last year," read a statement from Allie Addoms, FedEx External Sr. Communications Specialist.

"More than half of these businesses have provided service for FedEx Ground for five or more years, growing and evolving their companies alongside FedEx Ground as we jointly navigated opportunities presented by the rapid growth of e-commerce. We recognize the shifting market dynamics and current economic conditions may pose new challenges for service provider businesses, and we remain committed to working with these businesses to create opportunities for continued success.

"As each service provider agreement is negotiated individually based on a number of factors, including the unique characteristics of each business’ geographical service area, we have found that the most effective solutions are identified through direct engagement with each independent business. FedEx Ground teams across the network are continuing these productive discussions at a business-to-business level.”

To view the video and letter from Patton, click here.