FedEx Freight | Fedex Corp (FDX) Q4 2021 Earnings Call Transcript

[SwampRatt]

Brie Carere -- Executive Vice President, Chief Marketing and Communications Officer:

"We are the market share leader, because we have the best value proposition, we have had just a stellar year with the Freight team, they have done a tremendous job managing despite the tumultuous year we have, and while they did that they introduced a new product that is growing rapidly and in addition to growing our share with small customer, we intend to grow our share with the -- across the threshold FedEx Freight Direct product and grow our residential share. So we are tremendously excited about our FedEx Freight division and we're going to just stay the course."

 

[SwampRatt]

Lance D. Moll -- President and Chief Executive Officer, FedEx Freight:

" want to take this opportunity to add brief comments and recognize our team for an exceptional year. They successfully battled through what has been the most challenging year, I've ever seen in my almost 30 years in this business and I grew up in it. So I want to recognize all of the points they put on the board. Now, I'm sure you all have read the multiple articles written over the last several months about the tightening in the trucking industry and it starts with the truckload sector. They are 5 times the size of the LTL divisions and when they get full the spillover comes into LTL. We has the largest LTL carrier, get the majority of it. And so when you have it combined with what the broad actions our competitors have taken to embargo entire sections of the country, without any notice impacting all customers, we decided to take an implemented temporary targeted volume and to minimize the network disruptions and balanced capacity that were at the backlogs across the entire country. So with record growth has come some tough but necessary decisions to protect our employees, reduce our backlogs and staff to our business volume. This continues to be the driving force behind our business decisions.

Now, in hindsight, I would not have wanted to make a decision back in the corner like this and we're taking measures to avoid it going forward. I hope that provided the transparency."

 

[SwampRatt]

That is called flexibility. Something union carriers don't have.

Just a bit off topic, but OK:

AND United Healthcare with a $2350 per person DEDUCTIBLE, not to mention zero out of network coverage, is ALSO something Union Carriers DON'T have.

 

[Razorblade]

Just a bit off topic, but OK:

AND United Healthcare with a $2350 per person DEDUCTIBLE, not to mention zero out of network coverage, is something Union Carriers DON'T have.

Heaven forbid that a Teamster should have any personal responsibility. How could you expect a $100,000 a year linehaul driver to afford $2,350 a year toward his families healthcare? Why that's almost $200 a month. They need that $200 to support a pack a day habit.

 

[SwampRatt]

Heaven forbid that a Teamster should have any personal responsibility. How could you expect a $100,000 a year linehaul driver to afford $2,350 a year toward his families healthcare? Why that's almost $200 a month. They need that $200 to support a pack a day habit.

Weak argument, Obviously irrelevant to the topic. So you are content with your insurance benefit? Good for you.

NEWSFLASH: Not every driver makes 100k, and not all employees are drivers. But everyone is subject to our "awesome" insurance options.

You sound like you support the Marxist principal of "From each according to his abilities, to each according to his needs"

Why did you feel the need to bring the Teamsters into a topic unrelated - Freight Helping Ground? Do you think it's done for free?

Teamsters? Do you think they are the only Union able to represent drivers? Again, not sure why the need to bring them, or the Union, into this topic...

 

[Razorblade]

Weak argument, Obviously irrelevant to the topic. So you are content with your insurance benefit? Good for you.

NEWSFLASH: Not every driver makes 100k, and not all employees are drivers. But everyone is subject to our "awesome" insurance options.

You sound like you support the Marxist principal of "From each according to his abilities, to each according to his needs"

Why did you feel the need to bring the Teamsters into a topic unrelated - Freight Helping Ground? Do you think it's done for free?

Teamsters? Do you think they are the only Union able to represent drivers? Again, not sure why the need to bring them, or the Union, into this topic...

Short attention span! Scroll up to your post reading, $2,350 deductible, something UNION CARRIERS DON"T HAVE. I merely responded to you.

How about the Marxist principle that all labor is of equal value? Like the union contracts that make no provision for work ethic, individual talent or productivity. The agreements that put seniority above all else. The contracts that deny the fact that some people are better suited for a particular job than others. The contracts that say one "brother" deserves more vacation time than another for no reason other than his hire date. The entire idea of collectivism is socialist and Marxist.

 

[Steward of the Rock]

Short attention span! Scroll up to your post reading, $2,350 deductible, something UNION CARRIERS DON"T HAVE. I merely responded to you.

Only after you baited him with your post (#18) about "flexibility". And, why did you feel the need in post #24 to insinuate that all Teamster's need financial assistance to support their "pack a day habit". You seem to forget that you used to be a Teamster and had that great insurance that you now speak ill of.

 

[truckingBORED]

I was interested in the line from the earnings call that attributed some of Ground’s success to building “business to business” volume.

Has that ever been a Ground thing before?

 

[Banned for Life]

The law is very clear. In order to be a FedEx employee, FedEx must control your payrate and your schedule. FedEx must control when and where you work and how much you are paid. The people driving the FedEx Ground delivery trucks are free to organize and negotiate a labor agreement with their employer. The drivers are not contract employees. They are employees of companies that have a contract with FedEx. My condo association has a contract with Exclusive Lawncare. The guys cutting our lawns are not condo association contract employees. They work for Exclusive Lawncare.

You obviously have never been a Teamster, or a Teamster officer. You pretend to be ignorant of FEDEX's total control of every aspect of a FEDEX ground drivers day. If it was such a cut and dried issue as you put forward, it wouldn't have taken years and millions of dollars on lawyers to get where they are. If it wasn't for the anti labor biden/bama administration and careful judge shopping they would have never won. The only thing the judge did, was force FEDEX GROUND to ditch the single driver franchisees. They forced franchisees to purchase multiple routes and operate as an employer. Who's every action is controlled by FEDEX. Are you posting out of your mothers basement?

 

[Razorblade]

Only after you baited him with your post (#18) about "flexibility". And, why did you feel the need in post #24 to insinuate that all Teamster's need financial assistance to support their "pack a day habit". You seem to forget that you used to be a Teamster and had that great insurance that you now speak ill of.

There is an evolutionary truism that will never change, adapt or die.
Indeed, I did have that great insurance. I had it at a time when it was affordable and sustainable. Times have changed. The industry is more competitive and healthcare is exponentially more expensive than it was 17 years ago.
The YRC Teamsters have traded the long term promise of a livable lifetime pension for the immediate gratification of "free" healthcare today. Would it not have made more sense to absorb some out of pocket healthcare costs in your high earning years and protect the pension?

 

[Razorblade]

You obviously have never been a Teamster, or a Teamster officer. You pretend to be ignorant of FEDEX's total control of every aspect of a FEDEX ground drivers day. If it was such a cut and dried issue as you put forward, it wouldn't have taken years and millions of dollars on lawyers to get where they are. If it wasn't for the anti labor biden/bama administration and careful judge shopping they would have never won. The only thing the judge did, was force FEDEX GROUND to ditch the single driver franchisees. They forced franchisees to purchase multiple routes and operate as an employer. Who's every action is controlled by FEDEX. Are you posting out of your mothers basement?

It very much is that cut and dried. You did not address any points I presented so I assume you accept them as fact.
Not a single burger flipper works for McDonalds even though it says McDonalds on all the signs. Are all franchises a part of the anti labor conspiracy of lawyers and judges? How about Coca Cola? Those franchises are geographical areas where no other company can sell Coke products.
I'm confused. Franchises are bad but the regulated trucking industry was wonderful. You don't get it both ways.

 

[No F-bdy Bs]

They're putting out a lot of big talk.
Next 6 mo should be interesting.

 

[Tiredtrucker44]

It very much is that cut and dried. You did not address any points I presented so I assume you accept them as fact.
Not a single burger flipper works for McDonalds even though it says McDonalds on all the signs. Are all franchises a part of the anti labor conspiracy of lawyers and judges? How about Coca Cola? Those franchises are geographical areas where no other company can sell Coke products.
I'm confused. Franchises are bad but the regulated trucking industry was wonderful. You don't get it both ways.

Actually McDonald's corporation owns about 2700 restaurants but I still understand your statement

 

[Banned for Life]

The law is very clear. In order to be a FedEx employee, FedEx must control your payrate and your schedule. FedEx must control when and where you work and how much you are paid. The people driving the FedEx Ground delivery trucks are free to organize and negotiate a labor agreement with their employer. The drivers are not contract employees. They are employees of companies that have a contract with FedEx. My condo association has a contract with Exclusive Lawncare. The guys cutting our lawns are not condo association contract employees. They work for Exclusive Lawncare.

FEDEX GROUND controls every aspect of their franchisees drivers day. That makes them employees. Does "Exclusive Lawncare" have your condo association's name on their uniform? On their vehicles?

 

[Streaker69]

FEDEX GROUND controls every aspect of their franchisees drivers day. That makes them employees. Does "Exclusive Lawncare" have your condo association's name on their uniform? On their vehicles?

FedEx vehicles have the contractor info on them. Same as the guys that deliver Arnold's and Thomas's to my local supermarket and like the local Dunkin donuts is owned by some old guy that drives a Tundra.

FedEx doesn't control every aspect of the drivers day. The driver can drive around in circles and not deliver anything if they want to. That's between the contractor and FedEx. If the contractor decides to keep that person as an employee, they can.

When I drove for a contractor, I only wore a uniform when I was in a rental. It help speed up the process and avoid questions. When I was in my truck, I didn't because the polo is uncomfortable in extreme heat. I only had one and it smelled pretty bad really quickly.

My last day I left with a truck full of packages and I brought back a truck full of packages. He wanted me to pay for a tow truck when I got stuck in a driveway. I was grossly underpaid and called it a cost of business. He wouldn't budge so I scanned every package "did not attempt" so FedEx can fine him about 120 times. I never got that last paycheck.

 

[Banned for Life]

Franchises are bad but the regulated trucking industry was wonderful.

My last day I left with a truck full of packages and I brought back a truck full of packages. He wanted me to pay for a tow truck when I got stuck in a driveway. I was grossly underpaid and called it a cost of business. He wouldn't budge so I scanned every package "did not attempt" so FedEx can fine him about 120 times. I never got that last paycheck.

Perhaps RAZORBLADE you would like to comment on Steaker69's post. I'd love to hear how a retired Teamster official feels about the ty way a FEDEX GROUND "franchisees" treats its employee.

 

[longhaullounger]

FedEx doesn't control every aspect of the drivers day. The driver can drive around in circles and not deliver anything if they want to. That's between the contractor and FedEx. If the contractor decides to keep that person as an employee, they can.

I mean, you're technically right. But that's just it, a technicality that FedEx and other moneyed interests fight to keep as the law of the land.

I get a hook slip from FXG linehaul every night that dictates which trailers I have to hook to, what time I have to leave their yard, and what time I have to arrive at my destination. The whole "but you're free to do whatever you want" is bull.

If I refuse to do things according to their rules, I get disqualified from driving for FedEx -- including refusal to do mundane things like wearing a reflective vest when I'm out of my tractor on the yard, or getting caught speeding by more than 5 mph over the posted limit, or handling an electronic device while driving, or refusing to wear a seat belt. And FedEx requires my contractor to maintain a fleet of tractors equipped with spying equipment so they can determine if I'm breaking any of the rules they want to enforce.

The contractor model is there to stop effective organizing of FXG drivers and nothing else. Be honest. It allows FXG to use contractors as human shields by making them the scapegoats whenever someone is punished or even fired at FXG's insistence.

 

[Razorblade]

Perhaps RAZORBLADE you would like to comment on Steaker69's post. I'd love to hear how a retired Teamster official feels about the ****ty way a FEDEX GROUND "franchisees" treats its employee.

FedEx vehicles have the contractor info on them. Same as the guys that deliver Arnold's and Thomas's to my local supermarket and like the local Dunkin donuts is owned by some old guy that drives a Tundra.

FedEx doesn't control every aspect of the drivers day. The driver can drive around in circles and not deliver anything if they want to. That's between the contractor and FedEx. If the contractor decides to keep that person as an employee, they can.
________________________________________________________________________________________________

That is Streaker69's post. It says exactly what I said. The driver is an employee of the contractor not FedEx. Why don't you get that?
The process is to get 30% of union authorization cards signed. The DOL then holds an election and if a majority of the employees vote to organize, the contractor, not FedEx, must negotiate with the union.

 

[Streaker69]

I mean, you're technically right. But that's just it, a technicality that FedEx and other moneyed interests fight to keep as the law of the land.

I get a hook slip from FXG linehaul every night that dictates which trailers I have to hook to, what time I have to leave their yard, and what time I have to arrive at my destination. The whole "but you're free to do whatever you want" is bull.

If I refuse to do things according to their rules, I get disqualified from driving for FedEx -- including refusal to do mundane things like wearing a reflective vest when I'm out of my tractor on the yard, or getting caught speeding by more than 5 mph over the posted limit, or handling an electronic device while driving, or refusing to wear a seat belt. And FedEx requires my contractor to maintain a fleet of tractors equipped with spying equipment so they can determine if I'm breaking any of the rules they want to enforce.

The contractor model is there to stop effective organizing of FXG drivers and nothing else. Be honest. It allows FXG to use contractors as human shields by making them the scapegoats whenever someone is punished or even fired at FXG's insistence.

I can't speak on that. I never did linehaul for a contractor just for freight. I didn't wear a vest and I spent a lot of time sitting in a truck collecting delay pay. When they wanted me to do double turns, I'd tell them no and keep walking. I was free to do what I wanted and I can tell they hated it. When they'd say "we need you to do another one after this one" I'd say "no, I agreed to go here and I'm helping you out by going where you need me to go. I'm not doing more than that". And when they brought up the vest "I'm not wearing it. Do you want me to pull these trailers or not? I get paid either way". I can tell they were used to telling people what to do and they didn't like the responses they were getting from me.

You're right about FedEx disqualifying drivers. I think that a contractor should be allowed to hire whoever they want with no interference from FedEx.

The contractor model is there to make FedEx the most amount of money with least amount of liability. It has nothing to do with the drivers. The drivers not organizing has more to do with their employers than FedEx.

 

[Razorblade]

The contractor model is there to stop effective organizing of FXG drivers and nothing else. Be honest. It allows FXG to use contractors as human shields by making them the scapegoats whenever someone is punished or even fired at FXG's insistence.

I don't think FedEx is worried about FXG drivers organizing. Express and Freight are not organized. The contractor model was inherited from Roadway Package Service. It works, it's profitable, why fix it if it's not broken.
Drivers for contract mail haulers have just as many rules to follow. A speeding ticket for those guys is immediate termination.