Changes at FedEx Custom Critical

[ATeam]

Comments in the Independent Contractor or misclassification thread suggested that FCC changed its rules to include acceptance ratings in the formula that determines which truck gets the next load. Curious to learn more, I went, for the first time in months, to the FedEx Custom Critical Carrier Forum to see what FCC contractors were saying.

While there, I learned of other policy changes. I post them here to give the larger Open Forum community the chance to comment. FCC is a big company and big force in the expediting industry. It seems appropriate that expediters outside of the company have the opportunity to comment on the changes, and especially to comment on how those changes may affect them as the effects of the changes spill over or cascade into the industry at large.

My sole source of information about the changes is the EO Open Forum. If I am wrong about what they are exactly, I request that someone who is closer to the company correct what I state below.

The changes are:

1. You will be terminated and made ineligible to contract with FCC for one year if you are cited for (a) not wearing your seat belt, (b) using your cell phone while driving, and (c) speeding more than 11 mph over the speed limit.

2. Load acceptance ratings now matter more. The following quote from Jason Frederick about that was shared in the FCC carrier forum: "I also wanted to let you know that we have added acceptance rate to the criteria we use when ranking trucks for loads. This means that, the higher your overall acceptance rate, the more “points” you receive in our ranking system when our system determines who gets the load. This recognizes those contractors who accept freight and help ensure we are meeting customers’ needs."

 

[xiggi]

I have a question for you fed folks. Because of the way they broadcast offers to multiple trucks does everyone who says no get a turndown?

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[jjoerger]

Phil: Correct. Just as you would be terminated for violating the sitting duck rule or having an at fault accident during your first year. Every company has its own rules.

xiggi: I think so.

 

[ATeam]

The FCC safety changes may be more stringent than some carriers have, but if you are doing what you are supposed to be doing, they are no big deal.

People who want to argue about seat belts being uncomfortable or unsafe (might drown if you find yourself in a truck underwater, might get trapped in a burning truck) lose before they begin. These arguments have been made for years but overlook the fact that with no seat belt on, you remain vulnerable to all other types of crashes too, and in those, wearing a seat belt may very well save your life.

Yes, there is the risk that an over-zealous cop will cite you for not using a seat belt when you really are using a seat belt, but how much of a risk is that really? One thing to be careful of is keeping your seat belt on when you get pulled over or pulled into a scale. While a natural instinct may be to unfasten your seat belt when you stop and turn off your truck, be sure to keep it on until the cop gets to your truck and sees you with it on.

So too with not using your hand-held cell phone while driving and keeping your speed within posted limits. It is totally under your control to do so, so do so.

Some FCC contractors mentioned that they are getting pulled into CA scales all the time now. If that is true, it makes sense that FCC would take action to reduce its safety violations.

The load-acceptance changes also make sense from the company point of view, but in the longer run, may be counterproductive. FCC knows that there is a never-ending stream of truckers and trucker wannabees who don't know their business and cannot distinguish meaningful activity from meaningful results. And with this new policy, they seem to be determined to tap this resource. Run a truck until it goes broke, then replace it with another of the same kind.

This is counterproductive within the company because drivers of that kind are the same ones who don't get it about CSA, cell phone use, speeding and seat belt use.

Outside of the company, the FCC load-acceptance policy change puts additional downward pressure on freight rates. To the extent that there is a race to the bottom to win the price competition game, FCC seems determined to win it.

Looking at it from the company point of view, it is a valid strategy. Price is one of the most, if not the most, important considerations a shipper has when selecting a carrier. For the most part, a truck is a truck and a shipper's first instinct will be to go with the company that can get the job done at the lowest price. From a sales point of view, it is very easy to get your foot in the door if you can say something like "we can reduce your shipping costs by 20 percent right now if you say yes to us."

The question is, can a company that runs a fleet of trucks, the majority of which are destined and expected, to go broke, maintain the quality that shippers also expect. Sure, the low price is a good thing, but it stops being so if a shipper gains a dissatisfied customer because of freight damage claims, service failures and drivers that act like clowns and smell like pigs.

Will FCC be able to maintain this low-pay model while keeping the quality high enough to keep shippers happy? Time will tell.

For Diane and me, the effects are unseen so far at our carrier. The low-paying loads that FCC offers its contractors (sometimes in the vicinity of $0.50 per mile, all miles), that now count against contractors if they are declined because they are included in the load-acceptance ratings, are not seen at our carrier.

Our agents don't bother calling contractors with ridiculously low offers because they know that contractors will not take them. At a company that does not use load-acceptance ratings as a lever to get contractors to take unprofitable loads, agents know they would be wasting their time to even make the call.

 

[jjoerger]

We do not plan on changing anything about the way we determine if we accept a load due to this change. It is either a profitable run or it is not. We hope our 100% on time pick up and delivery, 0 CSA score, driver and truck qualifications and our professionalism will be enough to keep our truck rolling with good paying freight.

 

[moose]

. FCC is a big company
Which is the ONLY rezone for
1. You will be terminated and made ineligible to contract with FCC for one year if you are cited for (a) not wearing your seat belt, (b) using your cell phone while driving, and (c) speeding more than 11 mph over the speed limit.&
2.

& a direct result of the flowed CSA system .
CSA is an unfair scoring board that penalized large carrier for been LARGE.
FECC operate 1,459 power units, & if expending over the 1,500PU it will be placed among a much more narrowed {in the bad way} group of carriers. this is do to the low VMT of only 78,000 mile per year per unit.
the SMS basic score make it EZ for the FMCSA to flag a carrier for intervention.
looking @ the carrier SMS screen: Carrier Overview show a real safety concerns.
3 triangles with the unsafe driving well over the intervention mark- all with a carrier that travel well less then most.
this is a prime example of why the SMS do very little for safety.
the carrier was flagged not because it is an unsafe carrier, but because it have very little competition in it's SMS carriers size.
the 65.7% might be good for smaller carrier because they have way more competition for been flagged, but because there are very few carriers with just below 1,500PU then the system quick to mark FXCC as bad carrier poised for intervention.
what we see here is why large carriers 'invent' safety measures{like threatening a driver: 'one strike & your out!'}. this is why we see the ATA endorse new safety regulation, & why the one size fits all will never work with CSA.
what force large carrier to do, just to stay in business and avoid intervention by FMCSA, is a none issue for smaller carriers. this is why contracting with a small carrier will most always mean driving for a safer carrier, that needs to deploy less carrier safety regulations.
and why small carrier rightly opposed new safety mandated.
what is a big problem for the ATA company's is a mute point for most of the industry.
with almost 40% of carriers out there not having ANY basic history- CSA clearly fail to identify bad carriers.
so the examples mentioned in the OP are just the start, as FXCC try to be better then it's small pile of competition- you can expect more of the above.
as mention in the OP, this unfair CSA score effect everyone industry wide, it is why FXCC now 'broker' more loads via the Sylectus, why we see more carriers entering the business, and why carriers do not grow beyond a certain size{or they will be measured in compare to an ever shrinking group of competition for safety}. it is why we see more mandated regulation, & least but not last why we see low rates.

 

[zorry]

What he said.JJ

I'm not too upset about all of this.
I see bad load offers like everyone else.
I look at the load itself. If I took the d/h out, would it be a good load? If so, it's a good load. Period. Maybe not for me today. Maybe not for a truck where I am. I find comfort that they still have good loads they are offering.
Bad load offers I see are almost always because of high deadhead miles. Not bad loads.
I then have to determine if I can justify doing it. Service the customer paying big bucks, but I'm too far away to make it a good load for me today. Can't blame the customer. Nor can I blame Fedex.
Some I'll take. Others I have to turn down. It's just part of expediting.
Phil is dead on with his evaluation of changes to this point.

The more freight Fedex gets, the less dh miles in the future, hopefully.

 

[Turtle]

Our agents don't bother calling contractors with ridiculously low offers because they know that contractors will not take them. At a company that does not use load-acceptance ratings as a lever to get contractors to take unprofitable loads, agents know that they would be wasting their time to even make the call.

One factor that should be considered is some carriers have contracts with customers which make it so the carrier cannot say no to a load from that customer. Sometimes this is written expressly into the contract, and sometimes the carrier's acceptance rating affects which and how many loads that customer will give them. Those expressly written into a contract can result in some loads that pay very little and are not profitable to run, but the carrier has to get them covered nevertheless. That's why the carrier makes those ridiculously low offers.

 

[ttruck]

Im glad i left who i was with and glad i picked the one im with now.
I GUESS YOUR NOT REALLY AN OWNER /OP WITH THE COMPANIES THAT DO THIS.
JUST A DRIVER

 

[ATeam]

One factor that should be considered is some carriers have contracts with customers which make it so the carrier cannot say no to a load from that customer. Sometimes this is written expressly into the contract, and sometimes the carrier's acceptance rating affects which and how many loads that customer will give them. Those expressly written into a contract can result in some loads that pay very little and are not profitable to run, but the carrier has to get them covered nevertheless. That's why the carrier makes those ridiculously low offers.

Landstar has large sales force of agents that call directly on customers and directly contact trucks to book loads. It is probably the case that some if not many many of these agents have contracts with customers of the kind you describe. But it is also the case that if an agent cannot cover a load with a Landstar truck, they are free to broker it out to carriers that have trucks willing to run cheap.

 

[runrunner]

I could be wrong, but I think the low offers come from the load boards, you have contractors sitting there, not much going on , in order to pick up revenue you start bidding. If the Carrier makes .30 or .80 CPM doesn't matter so much,all profit. If a carrier has a contract with a costumer, the rates are spelled out in that contract. If the Carrier can't cover a run just because it is short,even though the rate is good and they have a contract with that customer,that causes a problem. If a run is a true Expedite Load the shipper isn't going to haggle price. Who would shop for the cheapest Ambulance when you are having a Heart Attack?

 

[bubblehead]

Who would shop for the cheapest Ambulance when you are having a Heart Attack?

My WIFE...!

 

[usafk9]

Some thoughts-

Safety changes to the contract: Bravo! I say it's about time.

Acceptance rates, load offers: I believe we may have been close to a flat or tiered rate system, and am happy that it didn't go that way. We understand that both FedEx and the Johnsons have to turn a profit for our relationship to continue. That said, there are numerous truck owners who play the game where they hope to be the last truck in town, and demand $2/mile for all miles. This, despite the fact that their truck is poorly equipped, can barely make it down the road under it's own power, their drivers are minimally credentialled, and refuse to go to places like NYC, Chicago, Canada, or California. If any of you do what you can to know and protect your bottom line, why would anyone fault any carrier here for doing the same?

Using CSA as a part of truck selection criteria: This is flawed on so many levels. My wife chose striking a cow over putting the truck into a real steep ditch on either side of the highway, which surely would have resulted in a rollover. To this day, i applaud her choice. Truck disabled, had to be towed from scene. She has CSA points. The Caffees were struck last year by a car fleeing police. Since someone in that car required hospitalization, one of them has CSA points. Not gonna work.

Landstar and cheap load offers: Hogwash, Phil. We both know better. There's probably a lot fewer of them, but they exist. One of your agents in South Bend comes to mind. Let's at least try to tell the whole story.

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[scottm4211]

Is that a bridge fire?

 

[usafk9]

Is that a bridge fire?

Smells like it.

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[moose]

Safety changes to the contract: Bravo! I say it's about time.

Why?
those Carrier imposed rules have ZERO effect on safety!
Carrier Overview
Carrier Overview
Carrier Overview
Carrier Overview
Carrier Overview
Carrier Overview
or others that have similar rules and policy's in place:
Carrier Overview
Carrier Overview

 

[jjoerger]

I believe if they are going to use acceptance rates as part of the criteria they should have to offer loads at a decent rate the first time the load is offered. And you should only be dinged with a decline if you were the first choice by the DVA system. Example: I am choice number 4 because I am 200 miles from pick up. My rate is lower because of the deadhead. Choice number 1 is 20 miles away and accepts the load. I decline but I still get dinged with a decline even though I am not going to get the load anyway. If this is how the system works our acceptance rates will always be low.
Offer us a decent all miles rate including deadhead to our planned layover and we will except everything that comes our way.

 

[moose]

Using CSA as a part of truck selection criteria is a great way to keep safe....@ least according to the lair in chief miss Ann Farro who stated last year in court that drivers that have been involved in an none fault accident are more likely to be involved in future crashes.

 

[ATeam]

Landstar and cheap load offers: Hogwash, Phil. We both know better. There's probably a lot fewer of them, but they exist. One of your agents in South Bend comes to mind. Let's at least try to tell the whole story.

It is not hogwash at all, and telling the whole story would require a book. The Landstar system is significantly different from a centralized dispatch system and it is not easily explained because a host of carrier, agent and driver variables come into play.

The agency you refer to is one that Diane and I have hauled many loads for. They have never once offered us a load at a rate that would be unprofitable for us to run.

"Cheap" is as relative term. That agency offers "cheap" loads compared to what many other agents offer, but compard to the "cheap" load offers FCC contractors talk about on the Open Forum, it's not even close.

 

[zorry]

If Fedex took my average rate for ALL miles, and only dinged me for turn-downs at or above that rate, all would be good.
I know what I need to run for. I shouldn't be penalized because I can't run at surface rates.

A full explanation of the selection system should be offered.

It's like playing a game without knowing the rules.

Except when you go out on the limb for whatever level truck you can afford, it isn't a game.