FedEx cuts ties with floor transport contractor, information lawsuit

FedEx Corp has severed its relationship with one of the largest shipping contractors effective immediately.

The parcel delivery company filed a lawsuit, asking a federal judge to stop the contractor from spreading misinformation about his business for financial gain.

Spencer Patton has 225 FedEx Road Routes in 10 states and businesses that offer services to the approximately 6,000 US contractors who transport and deliver packages for the unit.

Patton has been saying for weeks that up to 35% of FedEx Ground delivery providers are at risk of financial failure. He urged his leaders to increase compensation and has rallied “partners for his cause.”

FEDEX GROUND CONTRACTORS REQUESTS INFLATION HELP TO PREVENT SHIPPING COLLAPSE: ‘HUGE FINANCIAL STRESS’

FedEx Ground Location

The exterior of the new FedEx Chicago Loop Ground Station is seen in Chicago, Illinois. (REUTERS/Kamil Krzaczynski/File Photo / Reuters Photo)

“Really, what I’m advocating and really making the public aware of is that we’re in very big financial trouble,” Patton, founder and president of Route Consultant, told FOX Business’s Dagen McDowell about “Morning with Maria‘ in an interview earlier this month.

“We’ve seen our fuel prices double in a year. We’ve seen our wages go up, our vehicle costs go up,” Patton said at the time. “And I’m sounding the alarm that the risk of network disruption at FedEx Ground is as high as I’ve ever seen it.

The FedEx lawsuit seeks relief and monetary damages from Patton’s “coordinated and multi-faceted campaign.”

FedEx ground trucks

Side view of the Fedex Ground delivery truck in San Ramon, California. (Smith/Gado/Getty Images/Getty Images Collection)

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Without discussing the case, Patton announced his termination of his relationship with FedEx, saying “the company’s move to cancel our contract is a clear case of silencing anyone with a voice.”

FedEx said the affected routes accounted for less than 0.5% of Ground’s 60,000 routes and that contingency plans were in place.

In his lawsuit, FedEx accused Patton of belittling its Ground business through a series of false and misleading statements about its commercial activities.

Spencer Patton at the conference

Spencer Patton, one of FedEx Ground’s largest delivery contractors, speaks at a conference he is hosting in Las Vegas, Nevada, USA, August 20, 2022. (Spencer Patton/Route Consultant/Handout via REUTERS/Reuters Photo)

In the lawsuit, FedEx alleges that unfavorable news coverage stemming from Patton’s campaign could damage Ground’s reputation with shippers paying it to deliver packages and erode goodwill within the contractor’s network.

FedEx alleged that Patton’s actions were a promotional campaign for his company that offered shipping providers consulting, brokering, and other services.

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FDX FEDEX CORP. 218.16 -9.87 -4.33%

And, the company said, Patton was indirectly encouraging actions that could disrupt an important Christmas delivery business.

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At a conference hosted by his business last weekend, Patton said that if the terms of his contract were not adjusted, he would close his FedEx Ground contract business on November 25, the start of the holiday delivery season.

Kristen Altus and Reuters from FOX Business contributed to this report.

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