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Business

FedEx cuts ties with ground delivery contractor, files




FedEx Corp has cut ties with one of its largest delivery contractors, effective immediately.

The package delivery company sued, asking a federal judge to stop the contractor from spreading misinformation about the business for financial gain.

Spencer Patton has 225 FedEx Ground routes in 10 states, as well as businesses that provide services to the roughly 6,000 U.S. contractors that transport and deliver packages for that entity.

Patton has said for weeks that up to 35% of FedEx Ground suppliers are at risk of financial failure. He urged the managers to improve compensation and has gathered “equals to his cause”[ads1];.

FEDEX GROUND CONTRACTORS CLAIM INFLATION HELP TO PREVENT DELIVERY CRASH: ‘HUGE FINANCIAL STRESS’

FedEx cuts ties with ground delivery contractor, files

The exterior of the new Chicago Loop FedEx Ground Station is seen in Chicago, Illinois. (REUTERS/Kamil Krzaczynski/File Photo/Reuters Photos)

“Really, what I’ve been advocating and really bringing to the public’s attention is that we’re in tremendous financial distress,” Patton, Route Consultants’ founder and president, told FOX Business’ Dagen McDowell on “Morning with Maria” in an interview earlier this month.

“We’ve seen our fuel prices double in one year. We’ve seen our wage rates go up, our vehicle costs go up,” Patton said at the time. “And I’m sounding the alarm that the risk of network disruption at FedEx Ground is as high as I’ve ever seen it.

FedEx’s lawsuit seeks an injunction and monetary damages from a “coordinated and multifaceted campaign orchestrated” by Patton.

FedEx ground truck

From the side of a Fedex Ground freight truck in San Ramon, California. (Smith Collection/Gado/Getty Images/Getty Images)

FEDEX CUTTING OFF DELIVERIES TO SOME MARKETS ON SUNDAYS

Without talking about the case, Patton went public with the end of his relationship with FedEx, saying the company’s “move to cancel our contracts is a clear case of (it) silencing everyone with one voice.”

FedEx said the affected routes make up less than 0.5% of Ground’s 60,000 routes and that contingency plans are in place.

In the lawsuit, FedEx alleged that Patton is disparaging the Ground business through a series of false and misleading statements about commercial activities.

Spencer Patton at the conference

Spencer Patton, one of FedEx Ground’s largest delivery contractors, speaks at a conference he hosted in Las Vegas, Nevada, USA, on August 20, 2022. (Spencer Patton/Route Consultant/Handout via REUTERS/Reuters Photos)

In the lawsuit, FedEx argued that adverse news coverage stemming from Patton’s campaign could damage Ground’s reputation with shippers who pay it to deliver packages and erode goodwill within the contractor network.

FedEx alleged that Patton’s actions are a publicity stunt for his company, which provides consulting, brokerage and other services to delivery providers.

Ticker Safety Last Change Change %
FDX FEDEX CORP. 218.16 -9.87 -4.33%

And, the company said, Patton has obliquely encouraged actions that could disrupt its crucial Christmas delivery business.

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At a conference hosted by his business last weekend, Patton said that if the terms of his contract were not adjusted, he would close his FedEx Ground contractor business on Nov. 25, the start of the holiday shipping season.

FOX Business’ Kristen Altus and Reuters contributed to this report.



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