FedEx cuts ties with ground delivery contractor, files suit
FedEx says contingency plans are in effect to cover the 225 ground delivery routes in 10 states that Spencer Patton covered
FedEx Ground contractors sound the alarm on ‘enormous financial distress’ impacting deliveries
Route Consultant founder and president Spencer Patton explains how FedEx Ground’s delivery network is at risk of collapse due to inflationary pressures.
FedEx Corp has severed its relationship with one of its largest delivery contractors effective immediately.
The package delivery company filed suit, asking a federal judge to stop the contractor from spreading misinformation about its business for financial gain.
Spencer Patton has 225 FedEx Ground routes in 10 states as well as businesses that offer services to the roughly 6,000 U.S. contractors that transport and deliver packages for that unit.
Patton for weeks has said that up to 35% of FedEx Ground delivery providers are at risk of financial failure. He urged its leaders to improve compensation and has been rallying "peers to his cause."
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 making the public aware of is that we're in enormous financial distress," Patton, Route Consultant founder and president, told FOX Business’ Dagen McDowell on "Mornings with Maria" in an interview earlier this month.
"We've seen our fuel prices double in a year. We've seen our wage rates up, our vehicle costs up," Patton said at the time. "And I'm sounding the alarm that the risk of network interruption in FedEx Ground is as high as I've ever seen it.
FedEx's lawsuit seeks injunctive relief and monetary damages from a "coordinated and multi-faceted campaign orchestrated" by Patton.
Side view of Fedex Ground shipping truck in San Ramon, California. (Smith Collection/Gado/Getty Images / Getty Images)
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Without talking about the case, Patton went public with the termination of his relationship with FedEx, saying the company's "move to cancel our contracts is a clear case of (it) silencing anyone with a voice."
FedEx said the affected routes account for less than 0.5% of Ground's 60,000 routes and that contingency plans are in place.
In its lawsuit, FedEx alleged that Patton is disparaging its Ground business through a series of false and misleading statements about its commercial activities.
Spencer Patton, one of FedEx Ground’s largest delivery contractors, speaks at a conference he hosted in Las Vegas, Nevada, U.S., August 20, 2022. (Spencer Patton/Route Consultant/Handout via REUTERS / Reuters Photos)
In the lawsuit, FedEx alleged that unfavorable news coverage stemming from Patton's campaign could harm Ground's reputation with the shippers that pay it to deliver packages and erode goodwill within the contractor network.
FedEx alleged that Patton's actions are a promotional campaign for his company that offers consultancy, brokerage and other services to delivery providers.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 290.42 | +2.42 | +0.84% |
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 terms of his contract were not adjusted, he would shutter his FedEx Ground contracting business on Nov. 25, the start of the holiday shipping season.
FOX Business' Kristen Altus and Reuters contributed to this report.