fedex transition

Discussion in 'FedEx Discussions' started by echo, Jan 30, 2016.

  1. echo

    echo Member

    Hoping someone can fill me in on what to expect. My station announced transition is coming soon. No details until Feb. Thing is my route was already for sale so this announcement really screws me. After 13 years I get pushed out the door. Appreciate any info from contractors that have been thru the process so I can figure out what few options I may have. Thanks.
     
  2. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

  3. echo

    echo Member

    Thanks. Did some reading before posting but missed that thread.
     
  4. echo

    echo Member

  5. Bounty

    Bounty Active Member

    Unfortunately, they will give you a date to be up to scale or you will sell at a discount. Come sit next to me at the bitter end of the bar! Running out of room.
     
  6. bbsam

    bbsam Moderator Staff Member

    Why so bitter? As horrible as X is, I'd think you'd show some gratitude.
     
  7. echo

    echo Member

    Yeah I may be joining you soon. Should have put mine for sale a year sooner. Think there will be some court cases though. From what I read signing the limited contract also implies you agree not to sue over the announcement so X must feel vulnerable there. My current contract includes proprietary rights to operate , lease or sell. Seems to me the announcement breaches part of that by decreasing the value of my route and hindering the sale to only current contractors who can now wait me out.
     
  8. bacha29

    bacha29 Well-Known Member

    Under ISP some will prosper some will perserve and some will become impoverished. It would be unwise simply to believe that you will be safe by " getting up to scale" and procuring some more routes because in this case as we all know the same unpleasant realities are not going away.You have in no way shape or form the contract language required to preserve your equity. Futhermore, you are only as economically viable as the strength of the local economy you are serving and your ability to find somebody willing to go out there every day and perform at a level that matches or betters what a UPS driver does for half what a UPS driver gets paid. Now I know that many of you multi routes are basing everything you do or about to do on wealth accumulation expectations but the aforementioned facts combined with the real prospects for the creation of an annual pattern of shrinking margins thanks to the impossible task of negotiating a balanced deal in an unbalanced negotiating environment will be value depreciating facts that will be impossible to hide from any qualified prospective buyer.
     
  9. echo

    echo Member

    I own just one HD route and added a supplemental in November. My route has been for sale because I am retiring. At this point just trying to decide best exit strategy since the announcement Knew I wanted to get out, wish I had listed it sooner.
     
  10. bacha29

    bacha29 Well-Known Member

    be most able to pay cash.
     
  11. Bounty

    Bounty Active Member

    The one good thing about your situation is that if you were there 13 years you probably got the route for free or at least cheap. Hope it works out for you.
     
  12. echo

    echo Member

    NOt sure what you mean ?
     
  13. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    I think he is saying that you should try to find a buyer who is able to pay cash for your routes.
     
  14. echo

    echo Member

    Yeah and I wanted out. I realize for many they are forced to decide now , expand or get out. I guess there will be scenarios such as a 3 route 300 stop route buying out a 2 route that would have rather stayed etc. So I can't complain. Still owe some on my truck , the route was free. Was expecting about 100 k for it but I know I can kiss that figure goodbye.
     
    Last edited: Jan 31, 2016
  15. echo

    echo Member

    Ok t
    Ok that makes sense.
     
  16. echo

    echo Member

    Seems it would be a tuff sale to an outsider now unless they have deep pockets and plan to expand rapidly. I could market it that way maybe.
     
  17. bacha29

    bacha29 Well-Known Member

    That is what I was trying to say. Get the best cash offer you can get plus buyer assumes what is owed on the truck. Pay the taxes owed on the gain. Clearly you will sell it for more than you payed for it but it should still qualify for long term capital gains tax treatment usually 15% federal plus any state and or local you may owe. After that you if you are in good shape and can use the money and you are 66 or older you can make as much as you want with no SS penalty find a job doing something that maybe more enjoyable or drive for one of the guys who remain. As for the proceeds from the sale if you have no personal debt to pay off an insurance annuity might be worth looking into. Keep in mind X will offer you a sum of money in exchange for forfeiting your right to sue over the ISP transition. One other possibility would be to create a new S corp and merge with someone to reach the required scale but his operation and your operation will operate as SEPERATE profit centers.
     
  18. echo

    echo Member

    Thanks, that all sounds like good advice. Hopefully I can find a buyer before deadline because I don't think X will offer much on early termination or agreeing not to sue. I had a bit of a plan just the timing has thrown a bit of a wrench in it. But imagine being off the road and doing something I enjoy. That's a thought.
     
  19. It will be fine

    It will be fine Well-Known Member

    You may have up to 5 years to find a buyer. Around here there were plenty of desperate guys trying to get to scale that prices stayed relatively high. A lot can happen within a few years.
    The waivers to not sue fedex are worth the paper they're printed on. Take their cash for signing them, but they're meaningless. If FedEx does something illegal you can still sue them. They hand out the waivers as intimidation so you don't think about suing, they'd never hold up.
     
  20. MrFedEx

    MrFedEx Engorged Member

    Why? Because the scam has worked out so well for you? Do you still liken the Ground model to a franchisor/franchisee arrangement? What's happening would appear to be stretching the bounds of legality even further.