People hoping to get their holiday shopping delivered on time could be caught in the middle of a growing battle between FedEx and thousands of contractors who deliver most FedEx packages.
Many of the contractors used by the company's FedEx Ground division say they are losing money, even as revenue at that unit soared more than 60% since before the pandemic. As a result, a group of the contractors are threatening to shutter their operations right before Black Friday.
But talk of a pre-Black Friday shutdown is spreading among the contractors who are most vocal about the need for change."My business is losing money every day," said Spencer Patton, one of the largest contractors and the most vocal critic of FedEx Ground's relationship with its partner network. "And my business will not be able to continue operation past Nov. 25. Peak season is one of highest cost of operations time of the year.
Patton has been a contractor for 10 years. He started making his own deliveries on a single route before growing the business. He said historically he had about a 10% profit margin excluding interest, taxes, depreciation and amortization. Now he said he's losing 5% to 10% on that basis. FedEx Ground also would not comment directly about the threat of some contractors shutting down just before the holiday shopping season.
Patton issued a statement saying he will not stop his complaints about FedEx Ground's relations with contractors, despite the lawsuit.
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