Question: Is now a good time to buy a FedEx Ground Route?

[MrFedEx]

You may of course blame whomever you would like. You do seem to leave the individual driver out of any blame. No responsibility there. Look, being a driver for me is not a job for everyone. I have never said that it is. Some of my drivers are young and single and for them the money's not bad. Some are have spouses that work and driving for me provides a second income. Maybe some are trying to raise a family on $650 per week. Ground is what it is. Whether that is unethical or not is a subjective matter that will differ widely from one individual to another. Want proof? A couple clicks of the mouse should bring you to posts by 705red and others blasting UPS for unethical treatment. That's right. Union, contract, stewards. Still the ethics charges come. If I were to have you write a contract between myself and my drivers, how long do you think it would be before the crying and complaining would begin?

Psychological tidbit of the day: The best way to keep from being victimized is not to be a victim.

You're right. Your drivers choose to be victimized. Exploiting their ignorance is not exactly virtuous.

 

[FedExer267]

How can a ground drivers position be considered a second income when you work 9 to 13 hours a day because you have to do kinkos? When would you have time to work another job? So let me get this straight we work for a paid 8 hour day and like the 3rd of July when we were told not to work ofcourse no pay for that day we should just work are 8 hours and go home. You get what you pay for. One last thing how in the world would we become a contractor when we dont have any money to invest because we work for a Scrooge who obviously feels his employees arent worth being treated like a human beings. Fed Ex Ground contractors are nothing more than sweatshop supervisors. Gotta love america

 

[MrFedEx]

How can a ground drivers position be considered a second income when you work 9 to 13 hours a day because you have to do kinkos? When would you have time to work another job? So let me get this straight we work for a paid 8 hour day and like the 3rd of July when we were told not to work ofcourse no pay for that day we should just work are 8 hours and go home. You get what you pay for. One last thing how in the world would we become a contractor when we dont have any money to invest because we work for a Scrooge who obviously feels his employees arent worth being treated like a human beings. Fed Ex Ground contractors are nothing more than sweatshop supervisors. Gotta love america

According to bbsam, you should be saving up your money so you can become a contractor like him. At $650 per week you should be able to afford it in about 10 years if you don't eat or pay any of your bills. Sweatshop is exactly right.

 

[bbsam]

According to bbsam, you should be saving up your money so you can become a contractor like him. At $650 per week you should be able to afford it in about 10 years if you don't eat or pay any of your bills. Sweatshop is exactly right.

Save up the money? This is America. Capitalism. Here of a bank? Borrow the money, pay it back with interest. Happens all the time. In the process of selling one of the routes right now. And Fedex267 second income means the spouse also works. Happens in America all the time.

 

[UpstateNYUPSer(Ret)]

I am going to offer what you may find to be a surprising response to this thread. I think bbsam is an astute businessman. He is able to separate emotion from business when dealing with his employees. He is also smart enough to realize what his return on investment will be--in other words, you get what you pay for. If bbsam is able to get qualified employees to work for $650/week then more power to him. bbsam is in business to realize a profit, reinvest in his business and to grow his business. Labor costs make up the bulk of his expenses so reducing these obviously helps his bottom line.

With all of the talk of leveling the playing field, do I think that it is fair that I am paid at least twice what he is paying his employees to do what is basically the same job? Of course not, but that is not the discussion here.

The sad reality is that bbsam will always have an abundant pool of people willing to work for him at the wages that he is willing to pay and until such time as the IC model is either modified or discontinued he will continue to flourish.

 

[FedExer267]

bbsam, Look I dont know anything about you for all I know you may treat your drivers a little fairly you may give them paid vacations who knows I mean it is only the right thing to do. Second income would only come from me you dont know me either. I used to be a Ups driver My wife and I moved away and I commuted to work leaving at 4am to 10 pm. 3 years ago I lost my wife and I have 4 kids to raise I was offered a job at ground with promises of raises and bonuses because I drive a bonus route as a matter of fact I have one of the biggest routes in the terminal. I did what I needed to do to give my kids stability Its been hard enough on them as it is. The way I look at it I did the contractor a favor but the promises that were made I havent seen yet. Thats what I mean when I say the contractor dosent look at us like human beings. I mean would it be so hard for you guys to put 50 cents a hour into a fund thats what 8 dollars a day 20 dollars a week and after a year your drivers could take a break and have some pay to go along with that. Your way of saying thank you for all the hard work you do. Thats too difficult for most apparently. The bottomline is you dont give a crap about your employees as long as the packages get delivered. This is America last time I checked Human morals tell one to give a fair days pay for a fair days work. Now my situation is diffrent then most however if there where many opportunites out there today we would be somewhere else. The economy is in the toilet so we do what we need to do to survive and you could help like I said by giving your drivers a fair days pay for a fair days work. If you want to run a sweatshop there are opportunities across the sea.

 

[Brown287]

BBSAM So with some money in the bank can someone actually expect to turn a profit in owning a ground route. What is the pay per piece, stop, or mileage? How do you get payed? It seems to me that there is no creditable information on the issue. From what i gather Bbsam is a contractor so can he give me some real information on the issue.

 

[bbsam]

BBSAM So with some money in the bank can someone actually expect to turn a profit in owning a ground route. What is the pay per piece, stop, or mileage? How do you get payed? It seems to me that there is no creditable information on the issue. From what i gather Bbsam is a contractor so can he give me some real information on the issue.

Sure. $1.54/stop $0.24/package delivered $0.18/package picked up.
$45/day "van availability" (truck payment)
core zone pay
fuel supplement based upon $1.25/gallon.
monthly bonuses based upon quantifiable customer satisfaction goals.
annual bonuses from $500 to $2000 depending upon number of years with contract.
added service bonus (surpassing threshold levels on a given route)
matching money to service account (keep $1000 in company account and company adds $200 every quarter. yes that is an %80 return per contract)
multiple route bonus ($1500 to $6500 per quarter depending upon the number of contracts held)

Core Zone pay is a method of prorating for high and low density stop and package areas. High density areas are usually $0 and routes run 130 to 200 stops per day, 300-400 packages per day. High density with long stems (60-80 miles to the first stop) have a core zone of around $70 per day. Low density areas have Core Zone pay of $100-$120 per day. The prorating occurs when a route moves from high to low density areas.
40 stops in a $100 core zone
60 stops in a $50 core zone
40% of $100 = $40
60% of $50 = $30
thererore the core zone pay for this route on this day would be $40+$30=$70

Fuel supplement calculations were designed back before anyone really believed that fuel would top $1.25/gallon. I don't have a table with me, but the math is fairly straight forward. The company bases it's number on a truck getting 9 miles per gallon. If a route drives 180 miles in a day the company would figure on 20 gallons of fuel. There is a table available that gives lowest fuel prices within six miles of each terminal on any given day. If fuel is $2.50/gallon, the chart would accurately reimburse the contractor $1.25/gallon or $25. This is one of the gray areas I like to exploit. I use a minivan that gets almost twice the mileage and I usually fill up across the river where fuel often runs $0.10 to $0.15 cheaper. Add to that fact when gasoline prices run quite a bit cheaper than diesel, I save even more.

There is probably alot more that I am leaving out, but this is a rough idea. Hope I didn't bore you.

 

[Ricochet1a]

The costs per stop/package to Ground are very close to the costs to Express for delivery (labor only though, NOT vehicle maintenance or managerial overhead). Assuming 13 sph, this is $20/hr for stops. Figuring 1.3 packages per stop, add another $4 an hour. This means FedEx is paying out $24/hr to have packages delivered in a "tight" area. Obviously sph will decrease in rural areas.

What is the purpose of the "matching money to service account"? Is this just a method of granting operator profit outside of a cut of the deliveries?

Multiple route bonus makes sense. It give an incentive to have more routes. It also makes operating just two routes almost impossible.

You make no mention of maintenance overhead. I'm assuming all of your maintenance costs come out of the revenue mentioned. With $24 an hour revenue for a tight area and paying drivers $13/hr, this means about $10 per operating hour to cover everything.

 

[FedEX 4 Life]

I love when MrFedex makes it seem like the drivers are forced into slavery for taking the position.There are many McDonalds managers who evenutually become owners themselves and become milionares.Ya gotta start somewhere.

 

[MrFedEx]

I love when MrFedex makes it seem like the drivers are forced into slavery for taking the position.There are many McDonalds managers who evenutually become owners themselves and become milionares.Ya gotta start somewhere.

Did you know that you need a net worth of over a million dollars to even be considered for a McDonald's franchise? There are NOT very many McDonald's managers who become franchisees on $50,000 or so per year. So you are WRONG again.

And FedEx Ground drivers are not slaves...they are just exploited for their ignorance. Please sign me up for a job where I get to work 55-60 hrs a week with no pay for OT or any benefits so I can make bbsam and Fred S wealthy.

 

[bbsam]

The costs per stop/package to Ground are very close to the costs to Express for delivery (labor only though, NOT vehicle maintenance or managerial overhead). Assuming 13 sph, this is $20/hr for stops. Figuring 1.3 packages per stop, add another $4 an hour. This means FedEx is paying out $24/hr to have packages delivered in a "tight" area. Obviously sph will decrease in rural areas.

What is the purpose of the "matching money to service account"? Is this just a method of granting operator profit outside of a cut of the deliveries?

Multiple route bonus makes sense. It give an incentive to have more routes. It also makes operating just two routes almost impossible.

You make no mention of maintenance overhead. I'm assuming all of your maintenance costs come out of the revenue mentioned. With $24 an hour revenue for a tight area and paying drivers $13/hr, this means about $10 per operating hour to cover everything.

Yes, sph decrease in rural areas. Part of the reason for Core Zone pay.

Maintenance costs. I see it this way. First six years of truck ownership are under initial lease. Maintenance is generally fairly low. After the six year lease, the contractor has the option to replace the vehicle and keep a truck payment or I prefer to use the previous lease money for maintenance. There is a point when maintenance costs deem that the vehicle should be scrapped. Personally I have found the late 90's Internationals to be among the best value. Also the Ford 5.4L used by Home Delivery have been nothing short of amazing. Not uncommon to see 400-500 thousand miles before replacing the engine.

Over all, I think the dollar amount is closer to $30/hr but I don't have the contract with me to find documentation for the actual numbers.

The matching money for the service account was put in place near the beginning of RPS as an incentive for contractors to save money for maintenance.

There also is the quarterly bonus of 2 1/4% of gross settlement. That number can be rather substantive expecially when fuel prices and thus fuel surplus are in the $4.00/gallon range.

 

[FedEX 4 Life]

Did you know that you need a net worth of over a million dollars to even be considered for a McDonald's franchise? There are NOT very many McDonald's managers who become franchisees on $50,000 or so per year. So you are WRONG again.
.

There you go again,making stuff up.

 

[MrFedEx]

There you go again,making stuff up.

I looked into getting a McDonald's franchise 5 years ago since they're almost always profitable. Let's just say that you need a very high net worth and a lot of cash. I had the net worth, but I didn't have the cash, so I got a polite letter saying to try again when I had more money.The numbers I quoted were for my part of the US...they may be different in other areas of the country. In short, they can afford to be very selective about their franchisees because they have an extremely desirable and successful opportunity for sale.

A friend of mine managed a McDonald's after he retired from the Air Force. This was 4 years ago, but he made less than $50,000 per year. Please explain to me how he could ever afford to become a franchisee unless he inherited money or worked several jobs for a long time?

The original point of this was the question whether or not a Ground driver could ever afford to become a contractor. Of course they could, if they worked 20 hrs a day or went into hock with loans (much more likely). Under the single-operator scenario FedEx really has you by the short hairs because they want you to buy the vehicle from them ($$$$) too. A few years back there were scores of ads from single vehicle operators looking to unload their routes and vehicles at a big loss. That's changed with the explosion of growth at Ground, but the ones making the money are FedEx Corporation and the multiple-vehicle operators like bbsam. The individual contractor still has some hefty costs and isn't making good money.

By the way, what is a BST? Ask your friend who works for us what it stands for, OK?

 

[bbsam]

I looked into getting a McDonald's franchise 5 years ago since they're almost always profitable. Let's just say that you need a very high net worth and a lot of cash. I had the net worth, but I didn't have the cash, so I got a polite letter saying to try again when I had more money.The numbers I quoted were for my part of the US...they may be different in other areas of the country. In short, they can afford to be very selective about their franchisees because they have an extremely desirable and successful opportunity for sale.

A friend of mine managed a McDonald's after he retired from the Air Force. This was 4 years ago, but he made less than $50,000 per year. Please explain to me how he could ever afford to become a franchisee unless he inherited money or worked several jobs for a long time?

The original point of this was the question whether or not a Ground driver could ever afford to become a contractor. Of course they could, if they worked 20 hrs a day or went into hock with loans (much more likely). Under the single-operator scenario FedEx really has you by the short hairs because they want you to buy the vehicle from them ($$$$) too. A few years back there were scores of ads from single vehicle operators looking to unload their routes and vehicles at a big loss. That's changed with the explosion of growth at Ground, but the ones making the money are FedEx Corporation and the multiple-vehicle operators like bbsam. The individual contractor still has some hefty costs and isn't making good money.

By the way, what is a BST? Ask your friend who works for us what it stands for, OK?

Originally I was going to let this go, but it really smacks of ugliness. I have a route that I am in the process of selling. $75,000 is the price. That's a good chunk of money. But let's see it in another light. What's a 4 year college degree cost? How much money can you make while going to school full time? What kind of job are you guaranteed when you finish school and at what salary? Don't most college graduates have a sizable amount to pay back in loans? This is why I always say that getting into ground depends upon the individual. Now in this light, how bad is the deal?

 

[FedEX 4 Life]

I looked into getting a McDonald's franchise 5 years ago since they're almost always profitable. Let's just say that you need a very high net worth and a lot of cash. I had the net worth, but I didn't have the cash, so I got a polite letter saying to try again when I had more money.The numbers I quoted were for my part of the US...they may be different in other areas of the country. In short, they can afford to be very selective about their franchisees because they have an extremely desirable and successful opportunity for sale.

A friend of mine managed a McDonald's after he retired from the Air Force. This was 4 years ago, but he made less than $50,000 per year. Please explain to me how he could ever afford to become a franchisee unless he inherited money or worked several jobs for a long time?

The original point of this was the question whether or not a Ground driver could ever afford to become a contractor. Of course they could, if they worked 20 hrs a day or went into hock with loans (much more likely). Under the single-operator scenario FedEx really has you by the short hairs because they want you to buy the vehicle from them ($$$$) too. A few years back there were scores of ads from single vehicle operators looking to unload their routes and vehicles at a big loss. That's changed with the explosion of growth at Ground, but the ones making the money are FedEx Corporation and the multiple-vehicle operators like bbsam. The individual contractor still has some hefty costs and isn't making good money.

By the way, what is a BST? Ask your friend who works for us what it stands for, OK?

Im sorry it didnt work out at McDonalds for you.And i agree with bbsam.Alot of these jobs depend on the individual,including UPS and McDonalds.


I dont know what a BST is.Am i suppose to?

 

[Ricochet1a]

I dont know what a BST is.Am i suppose to?

I didn't think you'd bite on this one. You latched on and proven your initial statements as to who you are completely false. Bravo Mr. Fedex. You caught a phoney.

What you've done FedEx4Life is to prove you are not a topped out part-time Courier.

ANY Courier that was with Express before mid-2006 would immediately know what the BST was.

Your lack of knowledge regarding the BST proves you came into FedEx after mid-2006 (so much for being topped out).

Basic Skills Test.

If you are going to tell lies, don't admit you don't know something... It is a sure fire method of finding you out.

 

[FedEX 4 Life]

ANY Courier that was with Express before mid-2006 would immediately know what the BST was.

Are you sure about that?

 

[Ricochet1a]

Are you sure about that?

I'm positive, since it was a requirement. You've been found out, just admit it.

 

[FedEX 4 Life]

I'm positive, since it was a requirement. You've been found out, just admit it.

Sounds familiar but I will be honest,I dont really remember it.