Resource Center/Article • 09/12/2022
Independent Contractors, Union Negotiations, & Peak Surcharges, Oh My!
The parcel and LTL markets heat up as peak season looms, carriers focus on the year(s) ahead, and everyone has a role to play.
Parcel Carrier News
FedEx
- Related: So how does FedEx support independent contractors facing an increasingly complex supply chain (and peak season) without all the resources of their contractor? FedEx points to what it calls “Schedule K” payments, in which independent contractors receive payment in two phases: 1) a payment period between September-November that “provides contractors with funds up front so they can add labor and equipment to manage the upcoming peak-season parcel-delivery spikes”; and 2) a payment period that begins at the beginning of peak season in late November, that “provides contractors with variable compensation tied to specific delivery productivity metrics. The compensation levels are adjusted weekly depending on the unit’s forecasts for peak season volumes.”
UPS
- The UPS pilots’ union “overwhelmingly ratified” a two-year contract extension detailing annual wage increases, improved pension benefits, and ensures continued UPS flight service through Sep. 1, 2025. For those unfamiliar, UPS pilots are currently operating on a contract extension that will expire Sep. 1, 2023. The contract extension received unanimous support from a six-pilot executive board mid-June, but required a majority vote from all UPS pilots to approve.
- Less than nine months after announcing plans to purchase 19 Boeing 767 Freighters, the carrier announced it will purchase eight more to support “domestic and international demand for parcel shipping, driven by e-commerce, and fleet replenishment.” More specifically, UPS cited rising demand in healthcare, small business, and international markets as a driving force behind the decision estimated to cost just over $1.7B ($220M/aircraft), though a discount may apply for multiple bulk purchases. The carrier expects to receive the eight new Boeing 767 in 2025, while receiving previously purchased Boeings late 2023.
- Seeking exemption from two safety requirements, the Federal Motor Carrier Safety Administration (FMCSA) has denied two requests by UPS seeking exemption from two Entry-Level Driver Training (ELDT) requirements: 1) that long-haul training instructors have at least two years of commercial truck driving experience; and 2) the separate registration of the carrier’s individual training facilities within a new FMCSA database. UPS has previously made a similar request, and then and now the FMCSA determined the exemption request “lacked evidence that would ensure that an equivalent level of safety or greater would likely be achieved [absent the exemptions].”
GRI and Surcharges
LTL Carrier News
- Logistics Management brands 2022 a “quest for quality” year for the LTL market, summarizing many industry shifts driven by the pandemic: rising demand driven by the e-commerce boom; a more focused, strategic approach to pricing amongst LTL carriers; and a consistent approach from LTL carriers to better control and gain visibility into network capacity. John Schulz, trucking correspondent at Logistics Management, says, “Analysts and carrier executives we’ve interviewed over the past year agree that for the next year or two at least, carriers will have the upper hand in rate negotiations because capacity will remain tight and LTL options will be limited… So, now is the time to engage in those improved shipper/carrier partnerships we’ve been advocating over the years.”
Written by Cam Elliott
Share this page:
Success with a proven process
