Looking for some insight on purchasing and running a ground route

Discussion in 'FedEx Discussions' started by FdxExp4217, Oct 14, 2015.

  1. FdxExp4217

    FdxExp4217 New Member

    I'm new to the forum and would like to get some info from current route owners. I've been doing some research about the whole 'owning a ground route' deal for some time. Im currently a courier for the 'express', overnight, side of Fedex. I enjoy this type of work environment and i think owning a ground route would be pretty simple for me. I just need to learn the accounting part of the business, but my sis is an accountant so should work out. Yes I know I won't get any of the benefits that Express provides to its employees because the Ground side is contractors. I would like to start off with owning one route and running it as well then eventually purchase another route then hire someone.

    How much would I need to save to show I can handle maintenance cost and expenses from the start?

    Would FedEx allow a 1 person show or would I have to have a partner that handles the books?

    Considering I have kids, would I have to keep the 'late pickups' that come with the route or can I hand them off? I know that'll be money lost, but my kids come first

    Is it possible for a route to expand and develope more income or does it just stay the same?

    I can't remember all the questions I wanted to ask but they'll come to me.
    Thanks in advance!

    -Nick SVZA
  2. Cactus

    Cactus Just telling it like it is

    Don't do it.

    If you really want to own your own business, look elsewhere.
  3. FdxExp4217

    FdxExp4217 New Member

    Can you explain why?
    Kinda bursting my bubble lol
  4. It will be fine

    It will be fine Well-Known Member

    Buying one route at this point is a terrible idea. There are scale requirements in most if not all states by now where you need to own at least 3 to contract with FedEx. There is plenty of info on this board if you just search through it. If you just enjoy driving, Ground contracting is not for you. It's more about running a business than driving.
  5. Cactus

    Cactus Just telling it like it is

    Would you like to have someone else (namely Fred) have total control over what is supposedly your business that you paid for?
  6. Nolimitz

    Nolimitz Active Member

    you have done zero home work.
    if you own a business your wife deals with kid issues.
    you want to turn down work.
  7. bacha29

    bacha29 Well-Known Member

    IWBF: You are exactly right . This thing is becoming a great big cluster you know what. I appreciate the points you have made in the past. You have become perceptive enough to understand the widely varied demographics, scale requirements, climate, terrian profitability locale etc. as it pertains to each and every terminal. Good of you to tell that kid that there is no similarity between X and G when it comes to daily work experiences.
  8. Bounty

    Bounty Active Member

    DONT DO IT! Run and don't look back. It's a terrible investment! Stay away!
  9. Crozz

    Crozz Member

    You have to do research 5 psa or 500 stops is the magic number if you don't have those numbers don't get in. 3-5 years every state will be ISP and if u don't have the magic number you are out no matter how good or how much u paid for it.
  10. dmac1

    dmac1 Active Member

    Fedex is actually starting to require that you don't drive by requiring that all drivers be paid as employees. Organizing your like as a corporation isn't going to make your life simpler. Fedex can demand as many hours as they want out of you. You might be able to flex stops or pickups to another driver, but that just shows fedex that you can take even more stops or pickups because you show them that you can get it done. Even if you are only required to have one route, trying to hire and keep a good replacement driver can be difficult. What do you think it will take to hire, train, and keep 5 or more good drivers? Is that going to give you more or less time with your family?? And what about just the bookkeeping and payroll for 5 or more drivers? Is that going to give you more or less time with the family?? And around the Christmas holidays, do you think you will have more time to spend with loved ones??? Do you really think that with 5 routes, that you can take a two week vacation with your kids in the summertime????

    If family really comes first, get a real job, with security, and regular hours when you know you can go to parent-teacher conferences, soccer games, take vacations, where you know you can get enough sleep to be the best parent you can be. If you haven't heard of the lawsuits flying all around the fedex ground model, then you have a lot of catching up to do.

    The fedex contract itself gives fedex the right to cancel the contract anytime THEY decide. Fedex has put people on these forums to sell others on the 'contract' model while no one pays those who disagree with fedex. Now with more court rulings all over the country against companies like Uber and even McDonalds franchisees, the future is more unsettled, not less unsettled as some of fedex's supporters post.
  11. It will be fine

    It will be fine Well-Known Member

    That's a nice tinfoil hat you're wearing. Finding drivers has never been that hard. I pick my kids up from school everyday, try doing that with a "real" job. It sounds like you've been out of it for a while. Things have changed and you don't know what you're talking about.
  12. Socrates101

    Socrates101 New Member

    Nick- I am wondering if you have ended up purchasing any routes? I have been looking to buy some myself. Have you, or does anyone else in the forum know, of any ways to network with owners/isp contractors? Perhaps any relevant blogs to post?

    Any thoughts appreciated.
  13. dmac1

    dmac1 Active Member

    The idea of buying a fedex ground business has one big sign that says 'Do not buy.'
    I say this because the contract allows fedex to cancel your contract at any time for no reason. They can cancel it without warning. And then you have the right to seek arbitration. While waiting months or longer to get to arbitration, and pay half the cost, you will have no income.

    If you already own a trucking or delivery business, it could make sense to buy and just have fedex as an additional customer. But if you have a family, you should not risk any savings to buy.

    IF the seller will finance at 0% and take only a payment of maybe 1% of weekly gross, and be willing to forgive the debt when/if your contract with fedex is cancelled, it might make sense.

    When determining profit, look at the bottom line amount that taxes were paid on, and not cash flow, because cash flow over some period of time may not include the cost of purchasing replacement vehicles.

    And definitely keep in mind that fedex intends that owners not be drivers. The requirement to own multiple routes makes it almost impossible to figure out the value of a single route currently owned by an owner operator. An employee will be limited to fewer hours than an owner would be, and is unlikely to to be as efficient. An employee may not be willing to work 12 hours a day, every day. An employee may not be willing to work when ill, and you may need a back-up driver for each employee you end up with.

    And as your fleet ages, you will experience ever higher maintenance costs, so just calculating value based on 1-2 years of tax returns can paint a false picture. Fedex routes do not have fixed costs like operating a retail store. Every month your income and expense will vary. And you ALWAYS need to have back-up plans for vehicles and drivers. Any driver worth having will almost immediately become worth more than you can afford, as that employee will be looking at better options. You will be stuck with those willing to work for low wages and no benefits, meaning they will not be top line workers, and meaning they may decide without warning to just not show up, or decide that they need to stop working in the middle of the day. They will get stuck in potholes, and drive your vehicles like they don't own them.

    Good luck
  14. FedEx GT

    FedEx GT Active Member

    Or buy a good set of routes, make pretty decent money, grow at 5-10%, don't make waves with FedEx, and sell for a decent premium. Routes are not bad investments in the slightest, any we'll run multi route contractor in growth areas will tell you that whether they own routes currently or have sold in the past.
  15. Bounty

    Bounty Active Member

    I don't know your history, but I would bet you have been around a while and either got your routes free or cheap. This is an awful investment now. You need to find a real fool to buy these things for the money being asked for. Much better options out there.
  16. FedEx GT

    FedEx GT Active Member

    You are wrong on both. It is a very good investment if it is handled properly and you buy in the right areas. I bought my routes in the mid 6 figures a few years back with about 35% of it being on a loan. It has paid back the loan and bought out another contractor as well. If I do sell in the next couple years like I am planning and routes keep selling where I am within a month or two of being listed it will pay out somewhere around 5 times the money I put into it (counting the annual return for the next couple years as well).
    Instant work, growth, sales, that just comes your way is worth a lot more than anyone here knows that have not ventured into other business opportunities.
  17. Bounty

    Bounty Active Member

    I hope you find a bafoon when you sell. You have to make it sound good , your in so deep.
  18. FedEx GT

    FedEx GT Active Member

    Original. If someone says it is okay you say that they got their routes for free if they bought in you say "in too deep". Get some decent arguments or even some experience besides sucking at giving investment advice.
    I give facts, pros and cons and have been on the winning side of what this is. You wanted to "stand up and make a point" and were about to be thrown out like garbage.
    They should make you have a disclaimer on every post. "I was a small time single van contractor that was phased out because I couldn't read the writing on the wall. I have never ran this business as a multi route contractor and don't have any first hand experience at all. Very disgruntled and want nothing more for FedEx to impload".

    Out of the two of us I am the one that has successfully ran other companies and knows what it takes to build up other businesses.
  19. FedEx GT

    FedEx GT Active Member

    How far do you really think the reach is here anyways. You really think it matters what I tell a guy in CA in regards to pertaining to my interests in selling years away. Probably 90% of people buying an ISP are not going to vet it through a forum.
    But yet that is what you think all of us do that actually are content with what we do and make money.
  20. STFXG

    STFXG Well-Known Member

    ^^ ah snap! Lol