Contracting Standards

Federal Express Corporation contracts only with businesses that are established under state/provincial law as for-profit corporations and not, for example, with LLCs, LLPs, sole proprietorships, partnerships or limited partnerships (LTDs).

What is meant by “service providers”?

FedEx refers to the independent businesses that it contracts with for transportation services as “service providers.”

These businesses are organized legally as corporations. They employ their own personnel, including drivers. They provide their own vehicles that they operate and maintain. Their profits are determined in large part by how efficiently they operate and how well they satisfy customers.

They are paid a contracted amount, based on the volume of packages delivered and/or contracted miles driven, along with other terms of the agreement.

They have the opportunity to expand their business, diversify as appropriate to their business, and increase their income potential.

As independent businesses, service providers employ their own personnel, bearing all responsibilities for:

  • Employer-related expenses, including wages, salaries, benefits, employment taxes, unemployment insurance, workers’ compensation coverage, and any others mandated by local, state/provincial and federal governments.
  • Payroll deductions, maintaining payroll and employment records, and complying with all applicable local, state and federal/provincial laws (including wages, deductions, overtime, rest and meal periods, etc.) including the U.S. Fair Labor Standards Act as applicable
  • Training their personnel
  • Ensuring employees are legally authorized to work in the U.S. (or Canada as appropriate)
  • A service provider may be asked to complete contract familiarization and related activities as a precondition to contracting with FedEx.

Agreement terms

The obligations of both FedEx and service providers are set forth in contractual agreements. In general, for service providers, agreement terms include the following:

  • Safety and Compliance — Maintain a safety and compliance program to ensure that its employees are trained with respect to safe operation of vehicles in accordance with the law and contractual standards
  • Good standing — Maintain its registration and remain in good standing in states/provinces in which it is incorporated and in which it conducts business
  • Service reliability — Pick up and deliver all packages to meet customer needs for timeliness; and for linehaul operations, agree to provide timely movement of trailers between locations; committing to providing superior customer service and to accepting the challenges of that responsibility
  • Vehicle maintenance — Keep vehicles in safe operating condition pursuant to the U.S. Federal Motor Carrier Act and other applicable, government-mandated safety standards
  • Image — Ensure all services are provided in a manner consistent with customer expectations and the FedEx brand
  • Business commitment — Become knowledgeable about services and operations of FedEx, and maintain communication with FedEx to identify opportunities for future growth

To ensure that the FedEx network is well-positioned to sustain and expand its customer base, FedEx:

  • Continuously invests in brand awareness throughout North America
  • Obtains and maintains a diverse customer base, with a local and national sales force that stimulates growth
  • Creates and maintains facilities and information systems to ensure packages are transported efficiently throughout the network

Transacting and dealing with FedEx

To ensure that contractual and operational questions are addressed quickly and with the right people, service providers agree to designate the following representatives to communicate with FedEx:

  • Authorized officer: An officer of the corporation designated to address the business’s contractual or financial issues
  • Business contact: An individual designated to be the touch point for day-to-day operational issues

A Service Provider Solutions department at FedEx acts as an interface between FedEx and service providers. Service Provider Solutions specialists are available to answer questions regarding contract terms and conditions.

See Business profiles for stories of service providers that have found success.

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