12yearsaslave
Well-Known Member
401k Calculator - Bankrate.com
at 4% match at age 30 you get to half a mil in 401k by age 66. I don't know, why bother?
Buying a Fedex Ground Route
- Thread starter Xquestionman
- Start date
at 4% match at age 30 you get to half a mil in 401k by age 66. I don't know, why bother?
How many of those guys are going to last until age 66.? It's the very reason why UPS tries to have their guys out by age 55. They're worn out by that time if not sooner.
I don't know who you contract with to afford those wages and benefits on the ridiculous settlements FedEx sends out each week. You cannot afford a major mechanical expense, a few sets of tires, uniforms, or any other variable expense with that kind of money going out.
2400$ vacation package after 3 years? What is that, like 800$ a week wage? Averaging 45k-60k?
I got a bridge,,bro....
12yearsaslave
Well-Known Member
Setup Heavy routes. non of that 100 stops finish by 2 o'clock BS. People don't get that loading time/ time to route stays the same weather you give a guy 100 stops or 150. Drivers will still come in at 6:30 to try and load and get out early. Your revenue comes from delivering. Up your delivery per vehicle average.
Sounds like 12 has put a very heavy workload on his guys and has a very concentrated work area. The fact that he is offering something in the way of benefits counts for something but given the fact that he's only paying a small percentage of the costs it looks like an employee with a family will still be on the hook for around 600 bucks per month health insurance premium a ' middle of the road" plan is around $2000 deductible plus 20% copay and if the guy can take that type of physical beating until age 66 and who can do that his legs will gone long before then he will have a modest retirement income. . So he's not fooling anybody and he should have known better than to come on this site and feed us this kind of B.S. And as the downward pressure on settlements ramps up it appears doubtful that he's going to get anymore production out of his guys for the same money. Sounds like he has them maxed out or close to it already.
You can max out production on your drivers and manipulate routes for less miles, but only for gravy routes ln high density areas. That only means one thing to FedEx, your are overpaid as a contractor, and you are expendable. That means you have little leverage to support any increase in payment for services because someone can replace you and probably 3 weeks be doing exactly what you are doing. I've done what you got, only all my routes are rural, I'm lucky to have a few 15yr veterans meeting certain goals 90-100 stops 150-200mLS, I don't like it, but I have made an attempt to bring a modest livable wage, all paid holidays, and 2 weeks paid vacation, and it is the only way I can do it. You are correct that the only way to increase revenue is to increase efficiency, however a couple of late pick ups, or a jump in oversize packages will hurt your bottom line, but your benefits package cost will remain the same. I do wish I could afford to provide better benefits, however my areas again are costly to service. One other thing Mr 12 do you have any truck payments, and is your net worth the risks.?
Two words sums it all up. RURAL AREA. You know too what it is like to take a business model that is designed for a metropolitan area, located in a warmer climate, with flatter terrain much higher population density and much higher per capita consumption and take it out to the rural areas where nothing of the sort exists.
12yearsaslave
Well-Known Member
Rural areas assume lower cost of living. Do you know how much it is to buy a house or rent in major metro?
12yearsaslave
Well-Known Member
Yes I do have truck payments, I prefer those to repair bills.
How much do you pay for holidays? I thought about doing that, considering that 3 of them fall into peak season.
That response is a clear indication that your's is a metro area thereby making your compensation package far less impressive. In my area housing costs are not a clear measure of it's demographics. From the contractors perspective it's RD carrier miles. One zip in my service area was only 26 stem miles from the terminal but every morning 8 rural mail carriers left that zip's post office and went and serviced that zips 480 mile rural carrier network and it was just 1 of the 34 zip code 4 county area that comprised my work area.. That was in fact the area that was handed to me when we opened that terminal in 1992 and it hasn't been reduced.
12yearsaslave
Well-Known Member
There are mechanisms to get a second route in a single zip area when it becomes too heavy for 1 guy. I've done it. We have single zips that have 4 trucks in them.
Not at my terminal. Any requests for an additional route was turned down for the same reason. It was a terminal that lost money . If fact it was designated for closing twice in it's first 3 years. My only option was to run money losing supplementals and anybody who has had to run those damn things in a high mileage low volume area knows what I'm talking about. The guy who bought the route is running a full time supp plus a full time jumper and is hemorrhaging money at a furious pace but due to ISP conversion he needed an additional route and mine was all that was available. His only hope is that his first negotiation will produce a revenue pool large enough to at least make it a break even route. So stop wasting your time trying to compare an expanding metro area that has a growing economy with an expansive, mountainous, poorly accessible sparsely populated and appallingly depressed rural area whose majority of roads are unpaved with no cross pipes or catch basins making traveling them in winter a suicide mission. There is simply no comparison.
12yearsaslave
Well-Known Member
That sucks, I had to go to district management to get a route. Stop running supps. Fail for a week. Changes conversation. Has to be a single zip route.
I pay my guys a straight salary, so holidays are included, paid as regular work day. Just the cost of doing business an well deserved for them.
Contractors that find themselves with that type of favorable scenario have a lower cost and higher revenue stream. They just don't pass it on to the driver, so the cost of living is factored in because of density, however again it is not being passed on. Contractors have collectively suppressed wages as a result. This will eventually change as ISP will bring competition among ISP's and choices to the drivers. In other words high density areas are paying a rural wage, by choice.
Yes 12 there are mechanisms. In my contract which is still IC, their is an addendum that specifically states " FedEx and contractor agree that the service area will shrink over time" , it goes on to describe a vague process that is to be followed by both parties. You know as well as I do MOST CONTRACTORS don't know what's in the contract, and you can bet FedEx is not going to volunteer anything! If every contractor followed it, and quite screwing each other, there would be NO supplementals.
No question about it . In the near future a strong, healthy, energetic , dependable, drug free, fast working individual with a good set of legs a clean driving record and lives a socially responsible life will be able to walk into a terminal, introduce himself and say, " this is how much I want and who among you will pay it"? Desperate, contractors will get in line to give it to him even if it does impact their margins in a negative fashion
Why would such people want this job?
12yearsaslave
Well-Known Member
I am paying on average 15% more than other contractors. I definitely did not have to do that. The idea is the happier the driver the less work I need to do.
I understand, there are contractors that do the right thing, however I was surprised to find out how low drivers were being paid when I started out. FedEx enjoys these savings, and in return pays us a meager rate to deliver. It is a cycle that is difficult to stop. Creating efficiencies, and reducing waste are the only ways I can maintain. Then FedEx turns around and increases our threasholds, they will always win.
