FedEx Ground cuts ties with militant driver contractor

FedEx Ground has played hardball, and in so doing has tossed its most militant delivery driver contractor from the game.

Late Friday, the ground-delivery unit of FedEx Corp. (NYSE: FDX) announced it immediately ceased working with a group of delivery service providers controlled by Spencer Patton, a Nashville, Tennessee-based contractor engaged in an increasingly hostile fight with FedEx Ground over the financial condition of its 6,000-member contractor network.

In a statement late Friday, FedEx said it had “exercised its rights” under its contract with Patton to sever ties with his companies. In a separate email on Saturday, the company said the action was based on Patton’s businesses’ “continued failure” to meet the terms of their service agreements, despite the company providing them opportunities to do so.

Patton’s 10-state operation accounted for less than 0.5% of the approximately 60,000 total routes across the FedEx Ground network, the company said. “We have contingency plans in place and do not anticipate any impact to service based on these contract actions,” it said.

Patton oversaw a network, called Patton Logistics, with 275 trucks with 225 employees. Those employees are, for now, out of jobs.

Patton, like all other FedEx Ground contractors, operated across designated territories under contracts that run between 12 and 18 months. FedEx Ground uses a non-union contractor model to pick up and deliver packages and to provide linehaul service between the company’s hubs. Entities are required to purchase the right to operate the territories, and are free to sell those rights as well.

Patton declined comment beyond a statement issued late Friday afternoon disclosing the termination. He did not mention in the statement what his next steps would be. Patton said that FedEx Ground has long used “bullying tactics when interacting with their contractors to create an environment of intimidation.” 

The move to end the relationship is a “clear case of a $60 billion corporation silencing anyone with a voice,” he said.

The move came hours after FedEx Ground