There was a big bombshell dropped after market close Friday, August 26, when FedEx, one of the world’s largest parcel carriers, terminated the contract of Spencer Patton, the largest operator of contractors for the carrier. FedEx and Patton have locked horns recently over the culture contractors are being subjected to by the multi-billion dollar corporation.
“Here, let us show you the door…”
FedEx showed no mercy after Patton threatened to stop all work after Black Friday, one of the busiest shopping days of the year. FedEx filed a lawsuit claiming Patton’s remarks “created a fictitious crisis between them and their contractors.”
Quickly thereafter, FedEx gave Patton Logistics – a company that operated 275 trucks in 10 states – the boot. FedEx claims routes will be unaffected, as it will use “contingency plans,” which may involve hiring contractors on an emergency-use basis that cost two to four times the amount Patton was receiving.
FedEx also told the media onlookers that the Patton termination only affected 0.5% of the 60,000+ routes Fed-Ex operates.
Patton operated an unusual business model
Patton operated several companies focused on the contractor delivery model. Patton Logistics was his operation supplying drivers for the shipping giant.
He also operates “Route Consultant,” an advisory and consulting service that seems to be focused on negotiations between carriers and shippers. This company was the focus of one of FedEx’s claims that Patton was using the “fictitious financial crisis of the contractors” to enrich himself.
Patton also runs ADTP Inc., an entry-level driver training course that also worked with FedEx to train new drivers. He also had a training course through Route Consultant that offers a three-month program to teach new investors how to locate and buy FedEx delivery routes.
This is a developing story and BackTheTruckUp and FreightWaves will continue to monitor and report as news is released.