Key ISP Responsibilities
ISP contracts will have several requirements, some of which you will negotiate with FedEx. But there are many service provider responsibilities outlined in the ISP contract that will not be negotiable. Before purchasing a FedEx1 route or negotiating a new ISP contract, you should be aware of the key responsibilities of independent service providers.
All Business Operations
An ISP must be incorporated under state law and is responsible for all business operations and decisions, such as deciding whether to acquire additional CSAs.
ISPs must own vehicles that meet FedEx Ground standards and are responsible for maintaining these vehicles and paying all associated vehicle fees. You must also make sure your vehicles and drivers comply with all U.S. Department of Transportation (DOT) requirements.
Employment, Staffing, and Scheduling
ISPs are responsible for managing their team of employee-drivers by assigning and supervising work and recruiting and training staff. You will also need to determine compensation and benefits in accordance with both state and federal laws and establish work, leave, and vacation schedules.
Negotiating and Serving the Contracted Service Area (CSA)
ISPs negotiate the terms for their CSA and determine how best to serve the needs of their CSA.
Key Differences Between IC & ISP Requirements
There are many differences between the old IC agreement and the new ISP agreement, but two of the most important changes have to do with the scale and overlap of routes.
The new ISP agreement requires that all contractors have a minimum of 5 routes or 500 stops per day. A contractor also cannot hold more than 15% of the routes in a given terminal (though there are some exceptions to this rule).
Under the new ISP requirements, a single contractor must run both the home delivery and ground routes within their territories. Previous contracts allowed home delivery and ground routes within a single territory to operate separately.