The Route Experts Team

Total Business Service Solutions, Inc.

Understanding the ISPA (Independent Service Provider Agreement) should not be a mystery to anyone.  This new formatted contractual agreement between Independent business owners who want to provide package delivery fulfillment service for FedEx Ground is replacing the old IC Agreement.  Under the new agreement, there are no longer monthly Safety and Service bonus nor is there the Quarterly Service Incentive bonus.  Replacing  those two categories of compensation is the Weekly Service Charge fee- a flat rate negotiated fee paid on the weekly settlement statement.  What has also been eliminated is the associated "fines" or "penalties" that were associated with the monthly bonus.


Along with the weekly Service Charge fee there is a Stop Charge rate,  Surge Stop Charge rate, Per Stop Fuel Charge, Package Charge, Large Package Mix Charge,  Vehicle Brand Promotion fee, Apparel Brand Promotion fee,  e-commerce rate & non e-commerce rate.  Weekly Service fee, Vehicle Brand & Apparel Brand are all fixed rate compensation negotiated between Contractor and FedEx.  The remaining rates also negotiated rates, but fall in to the variable category as they are based on volume.


What you can also expect to see is that there are no longer things called PSA's (individual routes) but all is now a CSA- 1 consolidated Contracted Service Area in which a contractor provides both Home Delivery and Business to Business delivery services in a consolidated area.  Think of a geographic territory as a pizza pie sliced in to 4, 6 or even 8 slices.  Each of those slices represents a different contractor providing delivery service in this geographic area.  By creating the overlap and contiguous  requirements, FedEx has turned that sliced up pizza pie in to 1 solid pie, or delivery area.  The result is a more organized, fuel efficient, cohesive operation.  This has led to the new weekly settlement statements that are also streamlined  consisting of 1 page of production and compensation results instead of the old model with each PSA reporting individually.  Also in this weekly report is a record of each driver, days of service and daily production results.


The ISPA has also brought a higher level of expectation from FedEx Ground as to safety standards, vehicle maintenance and appearance, security and did I mention Safety?  This has become a primary focus for FedEx Ground.  Delivery vehicles are now required to have cameras both front facing, rear facing and  recording drivers during operation.  Third party vendors accepted by FedEx are required to provide this service at the Contractors expense.  Contractors are also required to provide their own package scanning devices to their drivers and managers compatible with the Star V system.  This is an additional expense carried by the business owner.  Employee background and security checks as well as DOT physicals & drug screening are the responsibility of the Contractor through First Advantage- FedEx no longer provides this service.


That is it in a nutshell.  We look forward to discussing this with you in more detail by contacting our offices @ 980 430-5995.