Best Practices

New FedEx Contractor Step-By-Step Instruction Manual

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It’s finally here! Our New FedEx Contractor Checklist has been a hit for some time now, and the complementary manual is now ready for download.

The PDF is a step-by-step instruction manual that goes hand-in-hand with the startup checklist to break down each step of the startup process. This instruction manual not only explains what is required to satisfy each step of the registration process in greater detail, but also shows examples of the documents you need to complete and tips on where to find them.

We’ve packed A LOT into this 20 page manual. Check out our Table of Contents:

  • Establishing Your FedEx Business

    • Step 1: Government Incorporation

    • Step 2: Complete FedEx Request for Vendor Information (RFI)

    • Step 3: Senior Manager Email

    • Step 4: Safety Plan

    • Step 5: Terminal Visit

  • Completing Your Business Set-Up with FedEx

  • Back Office Set-Up

  • Stand-Up Week

  • Appendix: Sample Safety Plan

Spend less time on paperwork and more time learning about being an efficient operator! You can hop on over to our Resources to see the full range of downloads/help we offer.

Or, download the new manual below ↓

How to Find and Retain the Right Manager for Your FedEx Business

Photo by Arthur Aldyrkhanov

Photo by Arthur Aldyrkhanov

Management Changes in the Purchase Process

When you purchase new routes, you may purchase routes with a manager already in place. You are probably excited about the experience this manager will bring to the table!

On occasion, however, existing managers choose to leave their position when a sale is in process. They may have stayed only to help out the previous owner or they may be looking for new work with someone they already know. Whatever the reason for their departure, it can add stress to the transition.

When purchasing a FedEx operation, you should always be prepared to have your manager give notice. Your manager will not be contractually obligated to you, so it is important to secure a window of support from the seller in case you lose your manager.

If this happens, you —or someone you trust—needs to be willing to step into that role for a few weeks, learn about what you need in a manager, and then take the time to hire a new one.

Though you may never face this challenge, it is important to have a contingency plan for your first weeks of operating.

Absentee Structures

To be a truly absentee owner, you have to have several layers of contingency plans in place. You would need a good manager, perhaps an assistant manager depending on the size, and part time drivers in place. If multiple drivers call out, you would have to make sure you have enough people in place to fill those spots.

Recruiting Great Managers

If you are looking to hire a new manager for your FedEx business, we suggest looking within your current operation first. Promoting an assistant manager, mechanic, or driver is a great way to ensure your new manager will be familiar with the operation from Day 1.

Moreover, a selection from among the team shows other team members that yours is a culture with opportunity and advancement potential. This feeling creates more loyalty in your employees.

You can also recruit with traditional online sources such as Indeed, Monster Jobs, Craigslist, and ZipRecruiter. You want to get a job posting in front of as many candidates as possible! Be sure to look for mechanical knowledge, logistics experience, and/or truck dispatch in their work history. We always tell owners that one of your first questions to a potential manager should be, “are you a halfway decent mechanic?” Managers who can help with the basics—oil changes, tire rotations, and wiper replacements—save you a lot of money overall.

With the scope of our operations, we’ve spent our fair share of time on job boards. And we have some pro tips to offer our consulting clients. If you’re interested in our insider tips to recruit more effectively, reach out for our consulting services.

You will want to use caution when you’re interviewing managers who work with existing FedEx businesses. You do not want to poach a manager from another contractor, specifically another contractor from within your terminal (because that's just not a good way to make friends!).

It happens from time to time that you do want to hire someone who is currently with another FedEx operation. In these cases we recommend working out a gentlemen's agreement with the other owner, giving them plenty of notice or waiting until they can fill the exiting manager’s position.

Retaining Great Managers

As with drivers, you should work hard to retain your manager. Keeping your team in tact is one way you can increase your business efficiency and, in turn, your profit.

It's also important to be honest and clear with your manager about your expectations for their role from the beginning.

In specific, you want to be clear about when they may be expected to drive for the operations and how often you expect this to occur. Your pay structure for the role should reflect these expectations. You manager needs a clear idea of how much they are expected to drive at their current salary. Additionally, they need to know how they will be compensated if they have to drive more than expected.

We also recommend offering an array of manager incentives as one method of retention.

Payroll Goal Incentive

Offer the manager a bonus for staying within his weekly payroll allocation consistently.

For example, if your business has 10 daily routes and the drivers make $600/week on average, your weekly payroll is $6,000. Allow an additional 5% for the manager to use during training and turnovers. This makes for a weekly payroll allocation of $6,300.

Let your manager know that If he/she maintains payroll at that level every week of the month, he/she will receive a $500 monthly bonus. Be sure to limit the amount your manager can drive in the operation if you implement a bonus like this! You want them managing, not driving to save on payroll.

Repair/Maintenance Incentive

If you’re willing to share books and records with your manager you can offer him/her a bonus for maintaining a total repair and maintenance number that is 15% (or less) of your total revenue.

Make the timeframe longer on this incentive to encourage preventative maintenance as well. You don’t want your manager cutting corners to save on the budget.

Linehaul Manager Incentives

The best bonuses for linehaul managers are ones that reward him/her for not declining runs or freight within a certain period of time. You want him/her to maximize your operations.

Need More Help?

We know recruiting and retaining drivers is hard work. We have experience across the United States managing a fleet of over 250 trucks and a staff of over 200 drivers. This challenge is real for us, too.

If you need help talking through your staffing issues, we’re here to help. Connect with us and we can work one-on-one with you as you navigate these challenges.

How to Retain Your Best FedEx Drivers and Handle FedEx Driver Turnover

Photo by Oscar Nilsson

Photo by Oscar Nilsson

The route and trucking industry in the United States is in the midst of a severe employee shortage. The American Trucking Association (ATA) noted a shortage of 50,000 drivers at the end of 2015 and predicted that shortage would increase to 174,000 drivers by 2026.

Hiring New FedEx Drivers

The ATA’s own research says the trucking industry needs to hire 90,000 drivers each year in order to keep up with demand.

Low US unemployment numbers (less than 5 percent) further complicate the driver shortage. With so many employment opportunities, individuals can be pickier about the industry and company they work with.

Research shows that the booming construction industry directly competes with the trucking industry for employees. Construction and manufacturing opportunities often pay better with less travel, making the positions more desirable to potential employees.

How can you compete in these economic conditions and hire excellent FedEx drivers?

One of your best sources for finding new drivers is your existing drivers. We recommend offering an employee referral bonus. For example, you can offer your drivers a $50 bonus after the employee they referred is on the team for 30 days. And, and additional $100 bonus after the new employee crosses the 90 day mark.

You should also recruit with traditional online sources such as Indeed and Monster Jobs. In many ways, hiring new drivers is a numbers game. You need to get your opening in front of as many eyeballs as possible.

Retaining Your FedEx Drivers

Not only do these economic factors make hiring new drivers difficult, it makes retaining your current drivers difficult. Research shows that nearly 60 percent of new drivers will leave their current company within the six months after they start.

Extensive “poaching” occurs throughout the trucking industry: offering bonuses and higher pay for drivers to leave their current company. Moreover, the driver shortage often means that companies ask more of their current drivers and fail to keep their hiring promises (miles per week, time off, shift changes, etc.).

With all of this dire information, what can an owner do to retain the best FedEx drivers and hire great new drivers?

Build a Family Atmosphere and a Culture of Loyalty

Difficult days on the job are part of every job. They can feel particularly stressful for your drivers. And they have options to go elsewhere if they are stressed too often. Be sure you have an atmosphere where team members feel respected and can be open with management about their concerns.

When individuals feel as if they’re part of something bigger and they have an outlet for their frustrations, they are more likely to consider themselves as part of a family environment. And they stay on the job longer.

Similarly, be honest with your drivers about changes to their work experiences. If you are going to change their mileage or time off as a result of economic pressures, be upfront with them about how things are changing and how your team can support your drivers through the changes.

Purchase New Vehicles and Maintain Your Current Fleet

When drivers enjoy their physical working environment, they enjoy their job more. While construction jobs offer volatile weather and working conditions, there’s a lot to like about working in a clean, climate controlled vehicle most of the day.

However, that satisfaction will evaporate if the vehicles are old, prone to breaking, and dirty.

Leverage an Incentive Structure

Give your drivers a reason to perform above and beyond. Everyone enjoys recognition and appreciation for stellar work. A few incentives we recommend are attendance bonuses and raises for increased stop loads.

An attendance bonus example: promise your drivers that for every three months they go without a call out they will receive a full extra day of pay. That will keep drivers motivated to get in their seats!

Once you’ve established average daily thresholds for each driver, offer a raise for drivers who can increase their daily stop average by 20 stops (or whatever makes sense for your route). This gives drivers ownership over the efficiency of their day and incentivizes your team to think creatively.

Need more help?

We know recruiting and retaining drivers is hard work. We have experience across the United States managing a fleet of over 250 trucks and a staff of over 200 drivers. This challenge is real for us, too.

If you need help talking through your staffing issues, we’re here to help. Connect with us and we can work one-on-one with you as you navigate these challenges.

How to Negotiate the Strongest Contract for Your FedEx Business

You are charging FedEx for your services. You will negotiate each of the following ten charges with FedEx. All of these charges combined account for money flowing into your business. It’s critical you understand how and when those charges occur. And how you can increase your cash flow! Following is a quick overview of the charges you will negotiate as part of your Independent Service Provider (ISP) contract.