Are there any ground p&d contractors willing to share some advice?

Discussion in 'FedEx Discussions' started by Pa_ground_driver, Apr 8, 2014.

  1. Pa_ground_driver

    Pa_ground_driver New Member

    Hello all! I am a FedEx ground driver who has been employed with my contractor for a little over 2 years now.

    Recently there have been a few routes posted for sale in my terminal. I would really like to make the leap from driver to contractor. The problem is I am extremely ignorant about what it takes to make that leap.

    I will be meeting with some of the contractors who are selling within the next few days, and would like to go into these meetings well prepared. What are some of the things I should be asking and looking for apart from the obvious(number of stops, pickups, number of packages, miles driven, type of truck, maintenance, etc). Am I allowed to see previous settlements from this route etc.

    Any help would be very much appreciated. Thank you in advance!
  2. bbsam

    bbsam Moderator Staff Member

    Ask to see settlement sheets and expense accounts for the routes in question. Get a copy of the contract and have a lawyer go over it with you.
  3. STFXG

    STFXG Well-Known Member

    ^^ that's about it. You already know what you're getting in to. Good luck!

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  4. DRAisawesome

    DRAisawesome Active Member

    Why are they selling? Seems to me there are a lot of contractors getting out? I'm express but talk to the ground driver in the area. I at one time and still might invest in some routes.
  5. STFXG

    STFXG Well-Known Member

    It's not for everyone. Most old timers are starting to get out. Time commitments can be a lot for young families as well. Stress. Looking to cash out. Many reasons.

    There's always at least a couple routes for sale. I know one that's been for sale for almost 10 years. When he's ready to actually leave he will offer it up at a reasonable price.

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  6. DRAisawesome

    DRAisawesome Active Member

    Another question. The original contractors. Did they have to buy routes?
  7. STFXG

    STFXG Well-Known Member

    Back in the day some came with the RPS transition. Some were drivers for contractors who were given routes by fedex (that doesn't happen any more). Some bought in. Routes used to be significantly cheaper.

    We only have a couple RPSers left in my building.

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  8. 2350

    2350 New Member

    Iam looking to buy a single route and being both owner and operator, I wanted to know, when you buy a route do you put down a down payment or how does it all work?

    Also these routes does fedex or the previous contractor make garauntees about the annual revenue generated?
  9. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Guaranteed revenue?
  10. STFXG

    STFXG Well-Known Member

    You bring a check, generally a cashiers check, and pay for it. Down payment is something you negotiate with your lender. Assets usually secure the loan.

    No guarantees on volume or revenue.

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  11. 2350

    2350 New Member

    If there are no guarantees on volume or revenue, then how does fedex give contractors the peace of mind in investing in a 80K truck buisness?

    Also, if a route generates around 100K, normally how much would that route be sold for? I just want to get an idea of prices.

  12. STFXG

    STFXG Well-Known Member

    Fedex doesn't care about you or your peace of mind. They care about service.

    Route pricing varies on all sorts of things. Location, type of route, volume, revenue, area growth, etc. The value of a route is whatever someone is willing to pay for it.

    A good rule of thumb is that a route will sell for around what it nets. Give or take up to 50k. Depends on how motivated the seller is.

    What have you valued the route at? Have you evaluated the business already? Assets, cash flow, expenses, etc? Is that 100k gross or net?

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  13. 2350

    2350 New Member

    I understand that fedex only cares about service, and iam not looking for a hand out, I know that good service means making deliveries on time, and if you can provide good service fedex will be more than happy to work with you.

    So if routes are sold for what they net, then as a single owner/operator I only really make profit in the gap between gross pay and net pay.

    If the route is 100k gross, and thats just the route no trucks, and I offered 30k is that too little?
  14. STFXG

    STFXG Well-Known Member

    You need to get some help. Take all the numbers to an accountant and pay him to value the business. That will give you a starting point for negotiating a purchase price.

    30k would be too little if the truck alone is worth 40k. If the route grosses 100k it probably nets in the 70-85k range. Too many variables to guess accurately. Do you have the settlements from the seller? Corporate tax returns?

    Like I said. Do yourself a favor and speak to a professional.

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  15. 2350

    2350 New Member

    well I understand that iam buying a buissness and buying a job, so iam trying to make at least 30-40K.
    anyways thanks for the info.