Xquestionman
Member
What are your thoughts on eventually one or at most two contractors running a terminal? I know the contract now only says up to a certain %, I think its 20% at a terminal etc.
Buying a Fedex Ground Route
- Thread starter Xquestionman
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STFXG
Well-Known Member
Won't happen. Too much control.
It will be fine
Well-Known Member
Agreed. That would actually give a contractor some strength to negotiate from. I think they'd like 5 or 6 per building, easier to manage with one P&D manager.
MrFedEx
Engorged Member
The Express pilots are the only unionized (ALPA) workgroup in the domestic opcos as far as I know. To say that FedEx is very anti-union isn't really true...they are vehemently anti-union. There is a great deal of interest, but much greater fear on the part of employees. They absolutely know that being openly pro-union will get you canned or in the crosshairs of management. It's very easy to set someone up to fail and then terminate them.
barnyard
KTM rider
Well done.
Xquestionman
Member
Thanks everyone for the input here; this has been very informative. Like most things this certainly ain't all is cracked up to be. Naturally there are risks here that do make me uncomfortable especially the control and power X has on things. But I guess in exchange for that you get predictable rev streams and don't have to fuss with non or late paying customers. Lots of pros and lot of cons, its gonna be a hard decision. I am gonna ride for the day with the seller to feel things out a bit first. I guess my one final question would be what is the 'average' net on a route these days? I know there are many factors, but what would you say a legit average is % or $ is?
Speaking from a single route contractor operating in an expansive, mountainous, poorly accessible, sparsely populated and severely depressed rural area , I can only answer your question this way. The cost of operating the truck takes
half the gross, while you got the other half but it was subject to taxes. It is indeed a very challenging environment but you will not grow tired of that nearly as fast as you will the strict command and control X maintains. From the very begining you will discover that
when it comes to command and control you are an employee. When it comes to the divestiture of risk, liability and variable costs you are an independent contractor. From the very beginning X has always wanted it both ways. Best of luck to you.
half the gross, while you got the other half but it was subject to taxes. It is indeed a very challenging environment but you will not grow tired of that nearly as fast as you will the strict command and control X maintains. From the very begining you will discover that
when it comes to command and control you are an employee. When it comes to the divestiture of risk, liability and variable costs you are an independent contractor. From the very beginning X has always wanted it both ways. Best of luck to you.
Xquestionman
Member
I am looking to buy a min of 5 routes prefer maybe 10. Seems harder to find routes of 5+, lots in 2-4 range. I have a hard time believing that a net of 50% is average. Does that include salary and admin/insurance? I would think the net would be around 25-30% like most bizs.
It will be fine
Well-Known Member
I think Bacha was saying he kept 50% when he drove it himself. An average net is hard to pin down since labor is such a variable cost depending on your area. I have trucks I lose money on and others that clear 30% of their gross in profit.
IWBF is right. drove it myself and the truck as a general rule of thumb took it's half and I got the other half. The only difference is that the truck didn't have to pay taxes. So Mr. Questionman. I think it will come down to this reality. Every truck has to go out every day . Not 4out of 5 or 8 out of 10. Therefore your success will always depend on the assumption that there will always be somebody walking through that door every morning physically able and psychologicly willing to go out there and deliver you top of the scale performance for bottom of the scale money or at least close to it and be willing to do it on a continous daily basis for an extended period of time and meet X's minimum driving requirements. That is what you may find yourself betting a ton of borrowed money on. If you are in the kind of labor market that can offer a good supply at favorable pay rates, you might be alright. If not you will find yourself behind the wheel most of the time. So the first driver to get qualified in your operation should be you because I 've seen plentyof people who believed that all they had to do was to get a bunch of routes then just sit back and count the money becoming " managers" or absentee owners only to discover that its not like that at all.
Not really. Many people have suggested talking to the current drivers and within that talk one can get a feel for the labor market. The guy who bought routes here recently chose our area over the Chicago area simply because the routes in Chicago had very few "long term" drivers of 8 months or more. Huge turnover. Two and a half hours west he has a workforce that's been in place for 6 years on average. Talk to other contractors in the area and in 20 minutesone can have a very good feel for the labor market.
It will be fine
Well-Known Member
Some of that can be attributed to the contractor though. You can have similar disparities in turnover within a building.
barnyard
KTM rider
and what I took from the other post, was that turnover is critical if there is not a labor market to replace the turn.
That is possible. Around here we seem to have a low turnover of drivers regardless which contractor is in qurstion.
P
pickup
Guest
This is a good, honest and informative thread. Civilized too.
Can you really put a lot of stock in what the drivers at a given terminal will tell you? It helps to survey those drivers but can they give you an accurate labor picture? You need to check the demograhics and labor statistics for the area you're interested in . If the money and benefits you're offering isn't competitive with what others are offering and you don't have a large labor pool to begin with which is exactly the trouble we had in the area I live in, then if one guy were to quit abruptly and we all know about how little prior notice they give you then the proverbial " next man up " may be no where to be seen. You're only as good as the guy behind the wheel's dedication to the task of protectng the contractor's interests.
Ground Schmuck
Well-Known Member
If its the isp I'm thinking of in Chicago, the dude is a scumbag.
UpstateNYUPSer(Ret)
Well-Known Member
One contractor for the entire city of Chicago?
