Value evaluation of Fedex Route

[tickz]

If you looking at from the perspective of an absentee, investor class contract flipping speculator I would say that you're better off flipping houses. Why? As long as XG's DOT numbers are on the side of the truck and the only thing that's going in them is XG branded freight you have no other choice but to allow yourself to be totally subjugated to the absolute will and power of that company. If you can't make it on what they willing to pay which will be the cheapest rate they can get away with or your drivers tired of working for nothing decide to vote in the Teamsters then be prepared to find your trucks pushed outside with a termination notice slapped on the windshields....then what are you going to do? I don't care what you do but if you think that all you have to do is to buy up a bunch of routes then just sit back and count up the money oh boy are you in for a surprise.
As IWBF pointed out you can expect to be jumped all the time with these operational change surprises that come right out of nowhere with little to no advance notice of preparation time. Does XG care about that? Of course not. it's a contractor problem that requires a contractor solution. And if you can't come up with one quickly.....game over.

Thanks, will read the thread

 

[tickz]

I'd say 10-15% is more realistic. 16 routes will require a couple back up drivers and a solid HR process to have new hires ready to go. It'll come down to peak and how your crew handles it. I've always paid my regular guys more to handle everything but some areas may require additional people and trucks and seasonal help won't be very productive.

Thanks!

 

[Mutineer]

As IWBF pointed out you can expect to be jumped all the time with these operational change surprises that come right out of nowhere with little to no advance notice of preparation time. Does XG care about that? Of course not. it's a contractor problem that requires a contractor solution. And if you can't come up with one quickly.....game over.

Chronic staffing issues and profitability aside, if a person has an interest in contracting with XG, the above quote accurately sums up what should be an adequate deterrent.

Nothing at XG is static. Rules and compliance requirements are cooked up on a whim. And just as quickly changed or discarded altogether. But not until you have spent time, money and resources into complying with them.

The purpose of XG management is to create problems and errands for contractors to solve, and then blame the origins and existence of the problems on the contractor. There are legions of white-collar desk-jockeys devoted to this purpose.

It's a never ending goose-chase with everything a contractor has invested hanging in a balance.

Be wary of rural addresses, state parks, natural resource exploration fields, and outskirt areas in any service area that you are considering. It only takes a few of these addresses to cause you chronic logistics, and profitability problems.

I know this may sound strange. And other XG'ers may have had very different experiences than mine. But if you abide in making money in this game; be very wary of any military bases, government installations, or anything federal in a service area.

 

[ManInBrown]

You paying $38 an hour OT after 8 hr's employer funded healthcare disability and a defined benefit pension that will pay $4,000 a month after 30 years?

Uhhh $4800 a month where i am, and as much as $7000 a month in some areas.

 

[bacha29]

Uhhh $4800 a month where i am, and as much as $7000 a month in some areas.

The real point of the matter is that veteran and ageing UPS drivers are retired. Contractor drivers are disposed of. I don't think people were catching or even payed attention when companies wanted to divest themselves of so called "legacy costs". I think a lot of people didn't realize that what they were talking about was a catch phrase used to disguise what they actually were referring to which were retirement pensions and healthcare costs.

 

[zeev]

Probably worst time ever to enter ground.3 divisions of Fedex, freight have to pay more to keep drivers, express need to compete with Amazon air by investing in newer assets. Leaves ground to be driven down for more profits on the back of contractors who have to now compete with Amazon and other delivery services for low cost drivers. Flipping houses less risky.

 

[MAKAVELI]

Do my drivers even come close to what a UPS driver does all day?

Not even close.

Based on a lot of the cry babies on here, they probably do.

 

[bbsam]

Based on a lot of the cry babies on here, they probably do.

No. Nunca. Jamas.

 

[dmac1]

You are not buying a business. You are ONLY buying the right to finish out the contract, and maybe the vehicles if they have any equity.

Fedex has the right to fire you at any time and cancel the agreement. You have the right to hire an attorney, pay thousands of dollars, and fight their decision to fire you ONLY if they do it in mid-contract. If you win your challenge of termination, you will get the balance of the amount of profit you would have made from when they terminate you until when the contract would have ended. So if they terminate you 6 months before the contract is up, they only owe you the profit IF you win your wrongful termination arbitration case.

If you make $1000 a week in profit, you would win ~$25000, minus arbitration costs, and minus any taxes you would have paid on that $25000. At least you have 16 routes, so that means you are in a larger facility where the mgr's personal likes and dislikes won't matter as much. FEDEX is not required to renew the contract, or give you any notice. Technically, they need to inform you at some point that you aren't meeting standards, but that doesn't help much. Winning wrongful termination DOES NOT mean you get your 'business' back.

Costs to run can very greatly depending on the area. I would use a per mile cost for things like maintenance and fuel. Maintenance for a rural area with rough roads can be double a city route. Tires are expensive!!. You will have people quit, call in sick, etc, so you need more drivers than you think, and if you to 7 days, you may need two drivers per truck..

If you can finance it all, and you can declare bankruptcy as a business if it doesn't work out, you aren't risking much. After all, Trump got rich borrowing money, paying himself first out of that borrowed money, and then declaring the business bankrupt after he had turned investors money into personal assets. You could run the trucks into the ground without setting up a replacement fund, overvalue them for tax purposes, depreciate the hell out of them, pay almost no taxes, and walk away after a couple years maybe making decent money. There are lots of wealthy people who do that- buy a business, pay themselves first, then walk away, then do it again. Vulture capitalists actively and proudly do it.

 

[BoxDriver]

Based on a lot of the cry babies on here, they probably do.

I’m a driver for a Ground contractor. No way do I do anywhere near what the UPS drivers do.

 

[MAKAVELI]

I’m a driver for a Ground contractor. No way do I do anywhere near what the UPS drivers do.

I have personally seen Ground trucks bricked out the same as many UPS trucks.

 

[bbsam]

I have personally seen Ground trucks bricked out the same as many UPS trucks.

Me too. With 120 stops. Not 260 stops.

 

[MAKAVELI]

Me too. With 120 stops. Not 260 stops.

Their routes are more condensed.

 

[It will be fine]

Me too. With 120 stops. Not 260 stops.

Just wait for smartpost. I knocked out 130 stops today in just over 5 hours. 100 more would’ve put me at about 8.5 hours. It’s coming.

 

[bbsam]

Just wait for smartpost. I knocked out 130 stops today in just over 5 hours. 100 more would’ve put me at about 8.5 hours. It’s coming.

Yep. I have a couple routes like that.

On the Smartpost deal, how do you think they’ll pay that for people who didn’t sign on to it in April? I considered seeing if I could get into it now but I hate the price they want to pay for it.

 

[It will be fine]

Yep. I have a couple routes like that.

On the Smartpost deal, how do you think they’ll pay that for people who didn’t sign on to it in April? I considered seeing if I could get into it now but I hate the price they want to pay for it.

It’s not great. My recent negotiator told me e-commerce rate is coming soon, it’ll trigger an automatic renegotiation. It’ll be every residential delivery paid at a lower rate. I just turned smartpost all the way up for a handful of zip codes as a test. It should hit next week, I added another route so my plan is for it to backfill the additional resource. I’ll let you know how it goes.

 

[bbsam]

It’s not great. My recent negotiator told me e-commerce rate is coming soon, it’ll trigger an automatic renegotiation. It’ll be every residential delivery paid at a lower rate. I just turned smartpost all the way up for a handful of zip codes as a test. It should hit next week, I added another route so my plan is for it to backfill the additional resource. I’ll let you know how it goes.

So e-comerce = HD < Ground?

 

[bbsam]

And damn it, I just went through negotiations. So damn tired of all the stand up BS.

 

[MAKAVELI]

And damn it, I just went through negotiations. So damn tired of all the stand up BS.

Welcome to FedEx.

 

[It will be fine]

So e-comerce = HD < Ground?

Yup. E-commerce < HD < Ground. And they are getting rid of HD. So the only stuff getting “full rate” will be Ground stops. He said we would negotiate at least 3-4 times before the contract year is up.