Looking to Purchase a Ground Route

[gixxer squid]

It is selling for 1.4 x net. For coverage, I would plan on using a combination of swing drivers and other contractors in the terminal like the current owner/driver has in the past. I was told that if/when it reaches that level, I could opt to temporarily assign the supplemental packages to other drivers until such time that I wanted to expand. Obviously I would want it to reach that point because that means it is possible for it to grow into an additional PSA, which I would then own from what I understand. I would also like to drive for a year and then hopefully purchase additional routes to manage, but I realize there is no guarantee of that.

just my 02 cents FWIW



Hmmmmm Somethings not adding up.

145 gross, 119 net. Is the net based after all the settlement deductions for you to come up with the 119 figure? (workers comp/vehicle insurance, scanner etc.

Lets get one thing straight. Fed Ex uses independent contractors to save themselves money and put all the burden on your back, NOT theirs. Understand this.

Couple of things that glare at me.

1. 1 PSA selling for 160k, overpriced. Sounds like truck is POS so very little value if any there. Someone mentioned rental truck, hahhahahahahaha Rental trucks don't have shelves, try rummaging through all your boxes on the ground in a bulk truck. it is not fun!!!!

2. Old contractor been there 20 years, you being a rookie, no guarantee others will help you out. What happens if they already have 130 stops, you won't be able to flex anything over. Your 12 hour day is now 14 hours if not more, plus if you have businesses open 8-5 or 6, you will get a DNA. What happens if you get sick? No Backup? Your monthly bonus is based on your pick up performance.

3. In my sunny west cost state, a minimum of two PSA's are required and everyone on payroll which would include yourself, less money in your pocket

It can be done, however, HOPE FOR THE BEST AND PREPARE FOR THE WORST.

First thing I would do is get a new p1200, don't even NOT consider doing this. Actually I would get the ford box trucks. Diesel gasoline more expensive now and parts much cheaper on gasoline. They are 55,000 approx ready to go, decaled and fed ex approved. Somewhere I have the website for them but can't find at the moment.

 

[soc151]

Really? The rules have changed in the 4 weeks since 2 other potential buyers came on to ask the exact same question??

Wow! Ok then. Yeah, actually I had just heard of these new thresholds. But hey, God forbid anyone ask and try to answer questions on an online forum.

 

[bbsam]

It is selling for 1.4 x net. For coverage, I would plan on using a combination of swing drivers and other contractors in the terminal like the current owner/driver has in the past. I was told that if/when it reaches that level, I could opt to temporarily assign the supplemental packages to other drivers until such time that I wanted to expand. Obviously I would want it to reach that point because that means it is possible for it to grow into an additional PSA, which I would then own from what I understand. I would also like to drive for a year and then hopefully purchase additional routes to manage, but I realize there is no guarantee of that.

Um. No. You won't find someone willing to let you "temporarily assign" work to others. They may take it and you'll probably never get it back. Why would another independent contractor take on your work, put forth the effort to maintain service on it and give it back "when you're ready"? That's not how contractors think especially in high density, profitable areas.

 

[rkj77]

Um. No. You won't find someone willing to let you "temporarily assign" work to others. They may take it and you'll probably never get it back. Why would another independent contractor take on your work, put forth the effort to maintain service on it and give it back "when you're ready"? That's not how contractors think especially in high density, profitable areas.

Ok then I'd have to do it with the hope it turns into another PSA. I am told that this and other contractors in the terminal flex work out to each other all the time if it is too much.

 

[bbsam]

Ok then I'd have to do it with the hope it turns into another PSA. I am told that this and other contractors in the terminal flex work out to each other all the time if it is too much.

that contractor has 18 years of building relationships.

 

[rkj77]

just my 02 cents FWIW



Hmmmmm Somethings not adding up.

145 gross, 119 net. Is the net based after all the settlement deductions for you to come up with the 119 figure? (workers comp/vehicle insurance, scanner etc.

Lets get one thing straight. Fed Ex uses independent contractors to save themselves money and put all the burden on your back, NOT theirs. Understand this.

Couple of things that glare at me.

1. 1 PSA selling for 160k, overpriced. Sounds like truck is POS so very little value if any there. Someone mentioned rental truck, hahhahahahahaha Rental trucks don't have shelves, try rummaging through all your boxes on the ground in a bulk truck. it is not fun!!!!

2. Old contractor been there 20 years, you being a rookie, no guarantee others will help you out. What happens if they already have 130 stops, you won't be able to flex anything over. Your 12 hour day is now 14 hours if not more, plus if you have businesses open 8-5 or 6, you will get a DNA. What happens if you get sick? No Backup? Your monthly bonus is based on your pick up performance.

3. In my sunny west cost state, a minimum of two PSA's are required and everyone on payroll which would include yourself, less money in your pocket

It can be done, however, HOPE FOR THE BEST AND PREPARE FOR THE WORST.

First thing I would do is get a new p1200, don't even NOT consider doing this. Actually I would get the ford box trucks. Diesel gasoline more expensive now and parts much cheaper on gasoline. They are 55,000 approx ready to go, decaled and fed ex approved. Somewhere I have the website for them but can't find at the moment.

I thought it was priced high too, but 1.4 x net is actually a little lower than most routes for sale here in NY.

The current owner/driver has no issue flexing over now. For backup, there are swing drivers in the terminal, but that is definitely a concern I have and I plan on finding out more about what the current owner does now since he is in that same boat.

I do plan on getting a new truck right away and using the current one as a backup.

Here in NY, it is one PSA and no payroll requirement for the owner.

 

[rkj77]

that contractor has 18 years of building relationships.

Agreed and I am hopeful that he will make the introductions and that I will be able to continue to maintain those. I see no reason why if I do the right things that cannot happen.

 

[bbsam]

Agreed and I am hopeful that he will make the introductions and that I will be able to continue to maintain those. I see no reason why if I do the right things that cannot happen.

very optimistic of you.

 

[rkj77]

very optimistic of you.

Should I just be totally negative and assume everyone will just be an a-hole and not work with me? I see no reason without first meeting and speaking with some of these contractors to think that If am willing to help out others when I can that they will not return the favor.

 

[dezguy]

You can be negative or you can be naive. As said above, the current contractor has 18 years worth of relationships in that building. He has clout, pull, whatever you want to call it. Who's to say there aren't other contractors in that building who have been wanting to grab some of his business for years but because of the pecking order, have laid off doing so. Do you think, just because guy with 18 years of experience sold to some newbie, they're going to continue doing so?

 

[rkj77]

You can be negative or you can be naive. As said above, the current contractor has 18 years worth of relationships in that building. He has clout, pull, whatever you want to call it. Who's to say there aren't other contractors in that building who have been wanting to grab some of his business for years but because of the pecking order, have laid off doing so. Do you think, just because guy with 18 years of experience sold to some newbie, they're going to continue doing so?

So, how would you suggest approaching it to find out if it will be a good situation? For all I know there could be a couple of other newbies in there as well, so I should probably get in there and find that out before I just assume the worst or best.

 

[bbsam]

So, how would you suggest approaching it to find out if it will be a good situation? For all I know there could be a couple of other newbies in there as well, so I should probably get in there and find that out before I just assume the worst or best.

By all means, meet with several contractors. The probability is that you will need them far more than they will need you and that will remain the case into peak and beyond. I suggest you carefully consider your strategy.

 

[rkj77]

By all means, meet with several contractors. The probability is that you will need them far more than they will need you and that will remain the case into peak and beyond. I suggest you carefully consider your strategy.

Understood and agreed. If I may ask, what do you find that other single route owners/drivers do as a backup strategy?

 

[bbsam]

Understood and agreed. If I may ask, what do you find that other single route owners/drivers do as a backup strategy?

Hard to say. I'm in an ISP state so there are no more single route owners. Years ago it was simple. We didn't get sick, we didn't take vacation.

 

[rkj77]

Hard to say. I'm in an ISP state so there are no more single route owners. Years ago it was simple. We didn't get sick, we didn't take vacation.

I'm not worried about vacation since Fed Ex has a 2 week time-off program, which expires in 2015 and the current owner takes 5 weeks, so he is using temp drivers for the additional 3 weeks. I do not tend to ever get sick, but I obviously must be prepared for it if that should happen or if I get injured. I will speak to the current owner and see how he handles that as I am guessing he has gotten sick or injured at least a couple of times over the last 20 years.

 

[gixxer squid]

Like I said, hope for best and prepare for worst. Just do due diligence

No such thing as time off in our terminal or even swing drivers. Only swing driver we have is on payroll. If you have a terminal that has swings, great, however, who gets first dibs if all swings used up?

Routes sell based on supply and demand. Based on your figures, I probably would not pay more than 120 max and even then. As far as splitting and turning into another PSA, don't hold your breathe. We have 2 supps that average more than our PSA'a and its been 2 years and counting. Not gonna happen. Turning into a PSA means more monthly and quarterly bonuses and FedEx just won't do that

I am not being negative, but I would plan in having a back up plan in the sense that most likely you will need to add your own driver to your payroll

What everyone else is saying about relationships is too true. There are contractors hoping and waiting for the new dog on the block to fail so the terminal will terminate contract and give them your PSA It happened last holiday time. Contractor failed and PSA given, not bought, to another contractor that had trucks and drivers just waiting. It's a dog eat dog world my friend

Having your extra old truck and a driver on the side to maybe do your bulk stops and slowly learn route is my best advice I can and will give. Adding the new 700 truck payment and 700 week or so salary to new driver. Ask yourself, can you live comfortably with what's left over. If answer yes, go for it

 

[White Line]

Um. No. You won't find someone willing to let you "temporarily assign" work to others. They may take it and you'll probably never get it back. Why would another independent contractor take on your work, put forth the effort to maintain service on it and give it back "when you're ready"? That's not how contractors think especially in high density, profitable areas.

Yeah he will, because most contractors are some really nice swell guys!

 

[White Line]

Hey rkj77 all I can say is really think this whole thing through, there is a reason why I just recently landed a job at a different company while still being a contractor FDX.

 

[bbsam]

Yeah he will, because most contractors are some really nice swell guys!

On the surface we are but business is business.

 

[STFXG]

You are required to pay yourself a wage if you are a driving owner. So you will have payroll.

New contract for this year makes it so no routes can be sold that would make an entity smaller than 3 routes. If you own 3 you cannot break it up and sell just 1 or 2 psa's. Same thing if you own 2 routes. You cannot sell 1. They are moving away from single route contractors. But I don't see ISP being rolled out anywhere new.

Be prepared to buy or sell if they decide to require multiple routes. And if they do that you would have to purchase an established business to meet the minimums.

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