On Aug. 26, FedEx Ground filed a lawsuit against Route Consultant, a consultancy working with FedEx Ground contractors, claiming that its founder and president Spencer Patton has created “a fictionalized crisis” to promote Route Consultant’s services. The suit seeks "permanent injunctive relief and monetary damages" related to "false and misleading statements" Patton made about FedEx Ground.
Hours later, FedEx Ground terminated the contract of Patton Logistics. With about 275 vehicles serving 225 routes, Patton Logistics was the largest FedEx Ground contractor in the U.S.
Starting months ago and through his Contractor’s Expo in Las Vegas Aug. 19-21, Patton’s public message was that FedEx Ground has not addressed concerns surrounding profitability for its 6,0000 contractors specifically relating to the high cost of Sunday deliveries and not allowing ISPs to take part in FedEx Ground’s fuel surcharges on customers, among other issues.
The FedEx Ground network of contractors (called independent service providers, or ISPs) delivers 100% of FedEx Ground’s packages.
Patton is forming a trade group to represent the ISPs. He also has been promoting #PurpleFriday, a reference to Black Friday (Nov. 25), when he and potentially other contractors would be forced to cease business if FedEx didn’t make operational and contractual changes. For Patton at least, that threat is now moot.
In a press statement, Patton responded to the lawsuit by writing that “FedEx Ground is ignoring systemic, networkwide problems and attempting to silence its small business owners.’
“For years, FedEx Ground has used bullying tactics when interacting with their contractors to create an environment of intimidation,” he wrote. “This move to cancel our contracts is a clear case of a $60 billion corporation silencing anyone with a voice.”
Patton wrote that his public statements were “an option of last resort after months of attempting to work through these issues privately with our FedEx Ground partners.”
“I knew this was a David vs. Goliath story, and that this outcome was a possibility when I stood up to a company that makes billions and is used to doing things their way,” he wrote. “They built their company on the backs of these small business owners, and yet they are wildly unresponsive to the very real financial struggles facing most contractors today.”
Patton wrote that while FedEx Ground CEO John Smith has recognized the contractor issues and offered an open dialogue, he repeatedly declined ISP’s requests for dialogue and rejected the invitation to speak at Contractor Expo.
Patton said he is “working hard to re-home our employees” and will “continue to stand up for what we believe in and what’s in the best interest of the contractor community.”
Originally posted on Automotive Fleet