What Is Schedule K in the FedEx ISP Agreement, and Should You Sign It?

Schedule K is the Enhanced Peak Service schedule of the FedEx Ground ISP agreement. It's an optional amendment, offered each fall, in which you agree to a much higher Daily Stop Threshold during Peak in exchange for extra pay. Whether to sign comes down to one question: does the extra pay cover the cost of handling far more of the Peak volume FedEx sends you, without the option to decline it? The answer depends on your operation and on that year's terms, so it can change from one year to the next.

The terms you need first

• Daily Stop Threshold (DST). The number of stops a day your agreement commits you to. In the ISP agreement filed publicly with the SEC in 2023, it has its own schedule, Schedule F.
• Right to Decline. Above your DST, you can decline additional stops.
• Peak. The holiday season. Industry advisors quote the agreement as defining it from the Saturday before Thanksgiving through the Friday on or just after December 31.
• Surge stop charge. Extra pay during Peak for stops above your DST.

How Schedule K works

As industry advisors describe it, Schedule K sets your Daily Stop Threshold for Peak far above your normal one. In return, FedEx starts paying the extra Peak pay at a lower stop count than your agreement otherwise would. Route Consultant's illustration: a contractor whose normal DST is 2,000 stops might see Schedule K raise it to 5,000 or 10,000, a number the operation will never reach, while the bonus pay starts at 1,500 stops instead of 2,000. Advisors also describe versions that add fixed payments in the weeks before Thanksgiving.

The trade is clear once you see it that way. Sign, and you are paid more for Peak, starting earlier, but you are committed to delivering what comes into your territory, because a threshold you'll never reach means you can't decline above it. Don't sign, and you keep your normal threshold and your Right to Decline, and the extra pay starts higher up.

The terms are set in each year's Schedule K, so read your own rather than relying on last year's or anyone else's.

How to decide, step by step

1. Read this year's Schedule K itself. The threshold, where the extra pay starts, any fixed payments, and the dates.
2. Pull last Peak from your settlements. Your daily stops for every Peak week, and what surge and peak pay you actually received.
3. Estimate this Peak. Start from last year and adjust for what you know has changed: new routes, a lost customer, the projections FedEx shares.
4. Price the capacity. What it costs to deliver everything: extra drivers, rented trucks, overtime, and longer days for the drivers you have.
5. Compare pay at a few volumes. Work out Peak pay with and without Schedule K at your expected volume and at volumes above and below it, the same way you'd evaluate a MESO offer.
6. Weigh what the money doesn't show. Service levels, safety, and whether your drivers can carry the extra volume through all of Peak without burning out.
7. Decide before the deadline, and keep a copy. File the signed or declined Schedule K with your contract documents. Next year's decision starts from this year's record.

A worked example

This sketch uses Route Consultant's illustrative thresholds. It has no pay figures: those come from your own Schedule K.

• Without Schedule K: DST of 2,000 stops a day. The extra Peak pay applies above 2,000, and above that you can decline.
• With Schedule K: DST of, say, 6,000 stops a day for Peak. The extra pay starts at 1,500 stops. You can't decline below 6,000, which in practice means delivering everything.

If your busiest Peak days run around 2,200 stops and you have the trucks and drivers for them, the earlier bonus is likely worth more than a right to decline you wouldn't use. If a single day could hit 3,500 and you'd need rented trucks to cover it, the extra pay has to cover that cost first.

Common questions

Is Schedule K mandatory?

No. Industry advisors describe it as optional: FedEx offers it each fall, and you can sign it or not.

When is Schedule K offered?

In the fall, ahead of Peak.

What does Schedule K change in my contract?

Your Daily Stop Threshold for Peak, and where the extra Peak pay starts. Some versions add fixed payments before Thanksgiving. Check your copy for the dates its terms apply.

Should every contractor sign Schedule K?

No. It suits operations that can handle the volume and would rather be paid earlier for it. It can hurt operations that rely on the Right to Decline to protect drivers and trucks during Peak.

Where do I find my Daily Stop Threshold?

In your ISP agreement. In the publicly filed version it has its own schedule, Schedule F.

Bringing last Peak's numbers to the decision

Route Impact doesn't model Schedule K offers. What it does is keep your settlement history readable: once your statements are in, your weekly stops and the surge and peak pay from last year's Peak weeks are there in Route Impact instead of in a stack of PDFs. That history is the starting point for the decision.