The intent all along was to reduce the total number of contractors as well as making those who remain totally subjugated to the absolute will and power of that company. Yes, you sign a service contract which now includes an NDA but the company openly states that it does not bind itself to any of the terms set forth in that contract allowing it to change amend and interpret those terms in any fashion it so desires. In addition it openly states that it's objective is not to create equity for contractors but rather to acquire the lowest cost trucking and labor it can obtain.When the consolidation of G and HD is completed what you'll be left with is a single operation that will run 6 days a week year round and Fat Freddy has mentioned the possibility of going to 7 days a week.
Don't buy anything that isn't already overlapped. Don't trust a handshake with the Ground guy that you'll work things out when the time comes. Only put up money on a contract that is compliant with the new rules. You aren't going to make back your purchase price before the new rules take effect so I'd say the risk is too great.
I'm saying if you're buying now only buy an overlapped CSA. If the Ground guy is willing to trade/sell then do it when you buy. Don't trust or hope that you'll work it out in a year, do it now and know you're set.
I see your point. I'm not sure how non colocations are making it work. In fact it's very possible that X won't approve an outside sale unless the area is overlapped.
IWBF is 100% correct. There is an abundance of contracts for sale out there but as he says you have to look closely at the reasons why they're for sale such as areas not overlapped with no bilateral agreement in place with the eventual outcome anyone's guess. In addition you have to be on the lookout for and you're seeing a lot of it these days contractors who are so called 'downsizing" but in reality all they're doing is lumping together unprofitable routes putting them up for sale in the hope that some poor unsuspecting starry eyed slug will come wandering in off the street and actually buy them.
Separate owners under one company? Are you buying contracts from two individual contractors? if so do you know how many daily routes each currently has and if they are simply parting out the ones that are unprofitable ?
It doesn't stop there. Are you buying the trucks and if so then the question becomes how old they are what kind of shape they're in and what do his maintenance records look like. Does he fix them when they're broke or does he fix them when they quit running? How much is still owed on them? The next question surrounds his payroll records. Are his quarterly's being submitted on time and in the correct amounts? What about turnover? Most G and HD routes have 3 drivers per truck. One coming,one driving and one leaving. Will drivers stay if you take over and how much will they want if you do?
You get paid less for overlap. Fedex basically pockets all the savings that come with the greater stop density. When I overlapped I lost $100-200/truck/week. The growth takes a few years to get revenues back to what they were prior.
