Ground vs Home Delivery from a contractor standpoint

Discussion in 'FedEx Discussions' started by mmor101, Aug 21, 2012.

  1. mmor101

    mmor101 New Member

    I'm looking to get into the Fedex contracting business although I'm not sure OPCO to start with. I'd like to drive for a contractor for 6 months to a year before making any decisions on a route.

    Could some one explain the difference's between the two? I'm looking for differences in weekly hours spent driving, net profit, expenses, opportunity for expansion, and differences in management procedures. Also, how do Ground terminals differ from Home Delivery terminals in regards to contractor relations and morning load procedures?

    Thanks
    -Mike
     
  2. mmor101

    mmor101 New Member

    Anyone? Also, are the operating agreements much different between the two?
     
  3. mmor101

    mmor101 New Member

    How can I message him?
     
  4. bbsam

    bbsam Moderator Staff Member

    on the road right now, but will try to respond in depth this evening.
     
  5. STFXG

    STFXG Well-Known Member

    Net profits varies from every contract. You won't get any clear answer on profits without knowing the revenues for the routes you are looking at.

    HD loads their own trucks. They get out of the building later. They make a little less than ground. They generally work less because they run less volume. You don't own a defined area and you can be floated based on volume in to other areas. Tues-sat delivery. Turn by turn manifests so it's easier to train new drivers. You don't have to return to the terminal when your day is done. No pickups.

    Ground trucks are loaded every morning you just scan through what you got and hit the road. More volume based on bulk stops and you also do pickups. Mon-fri. Paid more in most cases. Defined work area, more responsibility. Usually requires bigger trucks from higher volumes.

    Same contractor relations for both opcos. They come from district not building.

    The opportunity for expansion is usually as high as your bank account. Dont expect free routes. You will have to buy them. New routes are rarely approved.

    Contractors manage differently. That varies widely as well.
     
  6. mmor101

    mmor101 New Member

    Sounds good. Thank you
     
  7. mmor101

    mmor101 New Member

    STFXG,

    Thank you for your information.

    When you say "new routes are rarely approved" do you mean completely new routes to Fedex or a new route to the contractor (one that is already established)?
     
  8. STFXG

    STFXG Well-Known Member

    New routes in the system. If your volume is so heavy that you have to run two trucks to cover the one area don't expect a new route to get approved. It likely won't.
     
  9. mmor101

    mmor101 New Member

    I see. Have you ever been in that situation and is it likely to happen to other contractors?
     
  10. STFXG

    STFXG Well-Known Member

    I have not. But I know quite a few who have been stuck in that situation. And it eventually happens to everyone if you're here long enough.
     
  11. HomeDelivery

    HomeDelivery Well-Known Member

    yea, i see it 1st-hand... a few are running supplementals and are barely breaking even or operating them at a loss when it's too "light" on some days

    a few will take some volume from Ground to boost their stop counts for the day just to barely make a profit; but that would mean an even later dispatch for their driver (yuck, i've been there & i'd rather have the day off instead)
     
  12. mmor101

    mmor101 New Member

    bbsam,

    patiently and excitedly awaiting your response. :)
     
  13. mmor101

    mmor101 New Member

    bbsam,

    patiently and excitedly awaiting your response... :happy-very:
     
  14. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Would these be our newest members?
     
  15. bbsam

    bbsam Moderator Staff Member

    Yes, this is true. I ran two "supplementals" for years. It is utterly ridiculous. The "supplementals" would run as long and deliver and pick up as much as any other route in the building and barely be profitable. Supposedly the issue is now being resolved with plans to approve 500 new routes nation-wide. That begs the question just how many "supplementals" are out there? 1000? 2000? As much as that situation sucks, from a businessman's point of view it makes perfect sense. I pay my drivers $14 to $17 per hour, well under the industry standard. Why? Can't really afford more than that and if I could, why if I'm getting it done cheaper?
     
  16. bbsam

    bbsam Moderator Staff Member

    If you are looking for rapid growth, HD is the way to go. Volume there is simply unbelievable. Seems like it's easier to get drivers for HD. Around here, HD drivers start a bit earlier and finish by 2:30 or 3:00. I technically have only Ground routes, but since we are a co-location (Ground and HD in the same building), I usually take 60 to 80 stops for an HD contractor.
     
  17. STFXG

    STFXG Well-Known Member

    Is that including over time or are they only running 8 hour days? I know you've said you pay a daily rate before...
     
  18. HomeDelivery

    HomeDelivery Well-Known Member

    contractors rarely pay by the hour... if they did, i wouldn't be losing $60-70 per day during my last week as a cover/swing at an area where it takes 1.5-2 hours from the barn to the service area (one way) vs a temp agency paying by the hour.

    granted, the contractor of that route said i was getting done 2 hours faster than his regular driver <shrugs>
     
  19. bbsam

    bbsam Moderator Staff Member

    Yes. A daily rate. It's based on a 10 hour day and we rarely (even at peak) work more than that.
     
  20. jerman11

    jerman11 New Member

    Not entirely true. My route and terminal are opposite of that.