looking at buying routes with 12 trucks from an owner of 15 years. Early indications are numbers look good but I'm nervous that the overlap has not occurred yet. I'm told the current terminal can't handle H/D and Ground. FedEx could build another terminal in several years at which time the overlap would come in to play. I've heard good and bad if the overlap has not occurred. Some say its not a big issue and when it happens the route owners usually work things out. I see many positive posts on owning routes, what are the cons??
Buying FedEx Routes
- Thread starter Golffreak
- Start date
Operational needs
Virescit Vulnere Virtus
Bacha repeating his same story in 5-4-3-2-1.....
It will be fine
Well-Known Member
Are you looking at Ground or HD?
It will be fine
Well-Known Member
HD cons would be 7 day operation. Is the current contract on the e-commerce rate yet? That will be a big blow to revenue if it hasn’t happened yet. If it’s in a stand alone HD building I would just start transitioning the fleet to vehicles that can handle Ground when overlap happens. It’s a matter when not if they’ll build a colocation.
Star B
White Lightening
I thought HD was going away and becoming Ground....
It will be fine
Well-Known Member
That would be very unusual. The entire focus of FedEx is on increasing stop density. I’d be very surprised if they built a new building that was a standalone HD or Ground terminal.
Will you be paying much more than the value of the vehicles plus 1 year of your net income? Also, from a record keeping/tax standpoint, you may be better off buying the truck and the business in two separate transactions. Depreciation deduction can be a big part of your expenses. Fedex WILL want to renegotiate when your contract expires and isn't required to even offer you another contract, and if HD and Ground are going to be combined, and Fedex has a love affair with the ground contractor, and you are HD, you may lose out. You are NOT buying a business- you are buying trucks and the right to service a contract without any guaranty of terms. If the contract is good for 2-3 more years, it is better than if it expires in 6 months. You might be able to get the seller to get the contracted extended with fedex before you buy the servicing rights.
The selling broker (who claims to also own routes himself) said the business is exempt from the overlap since the terminal is HD only. He said the overlap applies to co-location terminals. That said, there is a chance they build a bigger terminal and both HD and Ground operate out of one terminal.
It will be fine
Well-Known Member
They’ll build a colo eventually. Might be 2 years might be 10. They won’t tell you until it gets close. Is the contract on e-commerce rates yet?
dmac 1 simply is repeating what I've said all along. Nothing's binding. No access to due process. You equity is locked up and is only unlocked through a transaction that meets with X approval and places it's interests first. You're a servant of your Fedex overlord and simply an administrator of a supply chain that can be cut off off any time for any reason or no reason at all. As dmac1 stated......it is NOT a business.
Cactus
Just telling it like it is
^^^^This^^^^
In reality all the contractors exist for one reason only and that’s as an anti-union firewall.
Invest your money elsewhere.
Especially if it's money you cannot afford to lose.
Notice something going on lately? While the rest of the world's economy is dead in the water Amazon kept right on going and it's stock was never impacted to the extent that others were. In addition this AM the IMF reported that the downturn could be as bad as the Great Depression and Goldman Sachs reported that the downturn could be as much as 4 times worse than the Great Recession. Yet Bezos keeps right on going like it never even happened.
UpstateNYUPSer(Ret)
Well-Known Member
...in fact, there is a disclaimer at the top of the Amazon home page stating that they would be giving preference to "essential" items until this crisis blows over...
59 Dano
I just want to make friends!
I think Amazon has already allegedly killed Ground 3 or 4 times already.
Guess who's stock just hit a new high? But granted, we'll be just fine and the markets will do well until the free federal cash runs out then balance sheets will rule the day.
Cactus
Just telling it like it is
Yeah, we know you're a big Ground fanboy. Yet you wouldn't ever consider being in a contractor position or get your hands dirty in the real world delivering Ground packages.
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