Trying to buy a contractor out

[59 Dano]

And if local conditions don't allow much in the way of prosperity? Then all the contractor has done is made it possible for the company to profit while he takes on the headaches. Bet you're going to tell me that's too simplistic or some such.

I don't really care about it either way.

 

[59 Dano]

So Ground is selling quicksand areas to contractors and it’s the contractor’s fault? What a load of crap.

IWBF covered most of it. You have an obligation to know what you're getting into regardless of what smoke FDX or the seller is blowing up your butt.

 

[59 Dano]

Try it yourself if you think it's so easy .

Try what? I said that it's the buyer's obligation to know what he's getting into.

Quite a number tried it at my depressed rural terminal. Instead of taking on additional routes that were offered to us free of charge we 3 day 1's gave them to those starry eyed entrepreneur wanna be's who believed that all they then had to do was just sit back and count up the money.
Revenue per mile wasn't even a steady drip let alone a trickle . They payed on a per diem meaning the faster they drove the faster they got done. Trucks needless to say were simply pulverized. If there was a place they were afraid they would get stuck if they tried to go back into they would simply leave it at the first building they saw. Houses even if abandoned, barns, school bus shelters even if the place was two miles or more away from the place the box was meant to go.
Fire them you might say? How could they do that when they couldn't get anybody else to take over ?

Why are you trying to convince me of the point I just made?

 

[59 Dano]

Maybe true, but Fedex has changed the rules so many times, and given ultimatums of take it or leave it so often that someone who had a contract several years ago has seen things change.

No different than any other business.

Now the owner of those routes may have enough invested that it makes selling very difficult. With fedex unilaterally changing things throughout the years, you can't just ignorantly claim that the contractor needs to be aware of the conditions. Fedex changes the conditions.

It's not an ignorant claim. Things are going to change, and not always in the favor of the contractor. Adapt or get out.

 

[59 Dano]

And you ignore how fedex changes the rules- from being an individual contractor to being required to own multiple routes. That alone can screw someone after they spent tens of thousands. thinking they were ensuring some security.

If I'm not mistaken, a big reason for that was that individual contractors were causing problems.

Fedex changes things and in reality, you have only a choice to accept the changes or leave. For someone with a truck worth less than they owe on, it isn't such a simple choice.

Sounds like someone bit off more than he can chew in that scenario.

 

[STFXG]

My rural routes average $130k gross. You’ve been around. Tell me how many stops/packages a city route has to move to hit those numbers? Yes, they average around $15k a year more in expenses than city routes. You telling me you can’t pull a profit from a rural route?

 

[dmac1]

Sounds like someone bit off more than he can chew in that scenario.

This typifies your responses. Everyone but you knows that as soon as you purchase a vehicle, it is worth less than you paid, and if fedex pulls the contract or make changes that alter the economics of your contract soon after you've purchased a new vehicle, you are screwed, because you don't have time to earn the difference. This can be true even if you bought used, or paid cash.

How much extra do you get paid to be an ambassador for fedex???? I wouldn't put my nose where yours seems to be so often.

 

[It will be fine]

You are mixing profit with pay for your labor. 15 years ago you could run a rural route and make $50k income but that doesn't equal $50k profit. Profit is what is left over AFTER you pay the reasonable cost of labor, including your own.

And you ignore how fedex changes the rules- from being an individual contractor to being required to own multiple routes. That alone can screw someone after they spent tens of thousands. thinking they were ensuring some security. Fedex changes things and in reality, you have only a choice to accept the changes or leave. For someone with a truck worth less than they owe on, it isn't such a simple choice.

And if someone bought the right to service a contract, that might have been a huge investment so leaving isn't an option that is acceptable, and fedex knows they have that power. As long as fedex can make unilateral changes to their business model, you are one change away from being a failure tomorrow, even if you think are god's greatest contractor today. Any contractor chiding another for 'failure' has a chance to be there through no fault of his own tomorrow.

There haven't been major changes that weren't telegraphed well in advance of their being mandated. If you didn't know at some point you'd need to own multiple routes, you weren't paying attention. If you didn't know that at some point you'd need to own all the overlap HD and Ground service, you weren't paying attention. Both of these changes were talked about for years before FedEx forced a timeline that was at least a year long itself. People make all sorts of excuses for why their business didn't turn out like they hoped, I just find placing blame on someone else dishonest.

 

[59 Dano]

This typifies your responses. Everyone but you knows that as soon as you purchase a vehicle, it is worth less than you paid

No, I'm well aware that a new vehicle takes a dive in value the moment it's sold. What does that have to do with owing more on a vehicle than it's worth? That's just not a wise situation to be in.

and if fedex pulls the contract or make changes that alter the economics of your contract soon after you've purchased a new vehicle, you are screwed, because you don't have time to earn the difference. This can be true even if you bought used, or paid cash.

You're screwed because you financed most of the price of a new vehicle.

How much extra do you get paid to be an ambassador for fedex???? I wouldn't put my nose where yours seems to be so often.

Considering where the rest of your head is most of the time, I doubt your nose ever sees daylight. You keep throwing out all these scenarios that make this a risky proposition for the contractor. NO , SHERLOCK. That's what I'm saying and why I'm saying a person needs to have his act together if he wants to get into this or any other business. If you can't run with the big dogs, stay on the porch.

 

[dmac1]

I actually was profitable running rural routes.even a supplemental a couple times a week that didn't have it's own route. It took some creativity that fedex didn't like at that time. My drivers worked 4 day weeks, paid for 40+ hours and OT after 8 hours, minimum guarantee of $12.50 an hour with bonus for extra prodution. Fedex hated me swapping packages and didn't like the extra work of re-routing packages to my extra van without them in control of how many packages I took.

I left in large part because they refused to allow me to buy another route, claiming it would put me over the 20% limit of terminal they never said. I was always told that growth opportunity was 'unlimited' until I wanted grow. That was one of their unilateral changes that made it 'unprofitable' when you consider that there is a minimum number of routes it takes that allows more flexibilty. Like being able to afford extra vehicles, or keep back-up drivers busy enough, etc. I was told that I could run all the supplementals I wanted. Gee, thank fedex.

 

[dmac1]

No, I'm well aware that a new vehicle takes a dive in value the moment it's sold. What does that have to do with owing more on a vehicle than it's worth? That's just not a wise situation to be in.



You're screwed because you financed most of the price of a new vehicle.



Considering where the rest of your head is most of the time, I doubt your nose ever sees daylight. You keep throwing out all these scenarios that make this a risky proposition for the contractor. NO , SHERLOCK. That's what I'm saying and why I'm saying a person needs to have his act together if he wants to get into this or any other business. If you can't run with the big dogs, stay on the porch.

You are so deep up the fedex back crack that you believe that an excellent contractor who does everything right is going to succeed. Either you believe it or you are just a liar. One or the other are the only two possibilities.I claim the opposite- that you can make all the right moves, and still end up screwed out of your life's savings if you buy into this. Having your act together is almost irrelevant in some cases, and you should be honest and tell people this when asked. Your dishonesty is the problem.

And I know that fedex has hacks they favor promote the 'opportunity' on sites like this. It has been going on since at least 2005, and you are just the latest.

 

[59 Dano]

You are so deep up the fedex back crack that you believe that an excellent contractor who does everything right is going to succeed. Either you believe it or you are just a liar. One or the other are the only two possibilities.I claim the opposite- that you can make all the right moves, and still end up screwed out of your life's savings if you buy into this. Having your act together is almost irrelevant in some cases, and you should be honest and tell people this when asked. Your dishonesty is the problem.

Oh grow up. It's no different than any other undertaking. It's always changing, as are the terms, and it's up to the contractor to be able to deal with it.

And I know that fedex has hacks they favor promote the 'opportunity' on sites like this. It has been going on since at least 2005, and you are just the latest.

LOL. I've never promoted opportunity at Ground. I'll say it's a business that requires you to be on your toes and have your crap together in order to handle endless changes and FDX doing all they can to keep on the sweet end of the contracts. It's going to require lots of brains, patience, money to endure all of that and to succeed. Some aren't able or aren't willing to put up with all of that and in that case this isn't the opportunity for them.

FedEx doesn't care about the contractors, the contractors don't care about FedEx. There are three others here who seem, at least as far as what they post here, to accept that and don't mind working to succeed with that kind of arrangement. It's no different than any other business.

 

[bacha29]

You are so deep up the fedex back crack that you believe that an excellent contractor who does everything right is going to succeed. Either you believe it or you are just a liar. One or the other are the only two possibilities.I claim the opposite- that you can make all the right moves, and still end up screwed out of your life's savings if you buy into this. Having your act together is almost irrelevant in some cases, and you should be honest and tell people this when asked. Your dishonesty is the problem.

And I know that fedex has hacks they favor promote the 'opportunity' on sites like this. It has been going on since at least 2005, and you are just the latest.

It all comes down to how many stops there are how far apart they are from one another and what you have in the way of a road to get you there plus whether you're unloading a traditional package or a piece of motor freight stolen off an LTL. And out here on these countless miles of unpaved dirt roads with little in the way of base material it's 15-20 MPH all day long and if it's one that has been torn up by the coal strippers, loggers and gas drillers you're much slower and that's because the truck simply will not take it.
That's of course if you the truck owner are driving it. If it's just one of your employee drivers on a per diem rest assured he's not going to worry about what the road or the lack thereof does to the vehicle. It's all about getting done as quickly as possible.

Furthermore XG is not going to lose money out in the rural areas. Therefore they're only going to give that contractor a limited amount of money. If he can't make it on that they'll either go get somebody that they have made to believe that he can or hand the area off to whoever is left whether that person wants it or not.

 

[Cactus]

If I'm not mistaken, a big reason for that was that individual contractors were causing problems.

Problems? Like what? Making too much money?

 

[STFXG]

Furthermore XG is not going to lose money out in the rural areas. Therefore they're only going to give that contractor a limited amount of money. If he can't make it on that they'll either go get somebody that they have made to believe that he can or hand the area off to whoever is left whether that person wants it or not.

They definitely lose money in the rural areas. I own routes that run in the red for Fedex. They can’t just not service those areas. They make up for the lost revenue on the high profit routes.

 

[dvalleyjim]

Moving from Los Angeles where I was a multi-route owner, selling my routes, (after the ISP agreement) and then moving to a rural community on the Eastern seaboard, I now drive a rural route for an ISP. Can't see how he makes money. He has a seasonal community that goes from slow to out of control in the Summer and 3 city routes, two in a small town and the rest rural. He says that all his money goes to operational costs and the money he makes is on the bonuses.

 

[Cactus]

I now drive a rural route for an ISP. Can't see how he makes money. He has a seasonal community that goes from slow to out of control in the Summer and 3 city routes, two in a small town and the rest rural. He says that all his money goes to operational costs and the money he makes is on the bonuses.

Well when they start taking the bonus’s away (and eventually they will) he’ll be so far down the toilet he’ll saying hello to the sewage treatment plant.

 

[bacha29]

There haven't been major changes that weren't telegraphed well in advance of their being mandated. If you didn't know at some point you'd need to own multiple routes, you weren't paying attention. If you didn't know that at some point you'd need to own all the overlap HD and Ground service, you weren't paying attention. Both of these changes were talked about for years before FedEx forced a timeline that was at least a year long itself. People make all sorts of excuses for why their business didn't turn out like they hoped, I just find placing blame on someone else dishonest.

No one's blaming anybody but rather are
throwing up a warning flag to those contractors who like X believes that the whole world is one great big metropolitan area. The collapse of the XG network will begin out in the rural areas as it continues to revenue starve rural contractors in an effort to avoid losing money. By doing so they are putting the economic interests of metro contractors like yourself needlessly in jeopardy .
While they have succeeded in totally subjugating rural contractors to their absolute will and power nevertheless when that contractor's little S-corp bank account hits zero he will at that point have no reason to continue because he will have nothing left to lose.
The population of the county that adjoins mine which my station covers has a population that is more than one third lower that it was in 1950
Whereas for you metro guys it's a growth game . For the guys out in the rural areas.....it's an attrition game.

 

[bbsam]

No one's blaming anybody but rather are
throwing up a warning flag to those contractors who like X believes that the whole world is one great big metropolitan area. The collapse of the XG network will begin out in the rural areas as it continues to revenue starve rural contractors in an effort to avoid losing money. By doing so they are putting the economic interests of metro contractors like yourself needlessly in jeopardy .
While they have succeeded in totally subjugating rural contractors to their absolute will and power nevertheless when that contractor's little S-corp bank account hits zero he will at that point have no reason to continue because he will have nothing left to lose.
The population of the county that adjoins mine which my station covers has a population that is more than one third lower that it was in 1950
Whereas for you metro guys it's a growth game . For the guys out in the rural areas.....it's an attrition game.

You have a real victim complex that blinds you to reality.

 

[Cactus]

You have a real victim complex that blinds you to reality.

So you’re logic is that rural areas will prosper?