In our industry we refer to the period of time between the beginning of November and the end of December as peak season. Inside of peak season there is a critical three to four weeks—roughly from Thanksgiving to Christmas—of exceptional package volume. Some contractors make one-third of their annual profits in peak season.
More than 600 contractors to FedEx Ground and business partners convened in Nashville, Tennessee on September 13 for the 2019 Contractor Expo + Party hosted by Route Consultant. The event featured industry-specific presentations, display booths, and networking opportunities.
Our update on the roll out of SmartPost last mile delivery across the United States. Most FedEx Ground territories are going to see a significant volume increase—we predict a jump of 25-100% in most markets!
Interest and competition for FedEx Ground routes increases year after year. A look at the details reveal that FedEx Ground routes are a fantastic bet! To best serve highly interested investors, we are offering this content-rich summit: a crash course in FedEx Ground routes.
The length and width of this day is packed with learning opportunities aimed at helping contractors run more efficient, smarter, and safer businesses. These are conversations you want to join. As informative as the entire day will be, it is also going to be fantastic fun! Learn more.
Within the United States, each state has extensive control over its own taxes, workers compensation rules, and labor laws. Further, each state has a different tolerance for employee-employer litigation. These variances make notable differences to a business.
Many new investors want to focus their search in on areas that also have high population growth. Population growth does contribute to package growth. However, as we cautioned before, beware of route businesses in cities where outsized growth contributes to low unemployment rates and upward wage pressure. These can be expensive markets with substantial hiring challenges.
If you serve a metropolitan CSA you have unique factors to consider. To start, we find that in a strong economy it is more difficult to hire drivers in cities where there are many employers and unemployment rates tend to be low. However, because of the higher wages and deeper pool of talent, route businesses in metropolitan areas have the opportunity to secure smarter, highly capable employees.
Our team of actual FedEx contractors worked through the math of new FedEx trucks versus used FedEx trucks in our own operations. We always want to make the most efficient choice for our fleets. We have compelling data that shows new trucks are the superior option for routes that are 150 miles per day or less. Why is this the case?
Healthy fedex route businesses demonstrate profit margin ranging from 15% to 45%. Where you fall within that range depends on the type of routes you own, the composition of those routes, and how efficiently you manage your business expenses.
One of the ways FedEx Ground stands out among the crowd is its ability to receive and deliver large or incompatible packages. Think about all of the incredibly large items we can buy and sell online today that need some way to get from Point A to Point B: playground equipment, dining room tables, sets of tires, and more.
Here’s why you’re hearing more than one thing on bonuses: FedEx Ground historically awarded bonuses to contractors. However, FedEx Ground is in the process of phasing out bonuses and so some contractors have them and some do not. Understanding what bonuses used to do, why FedEx Ground is phasing them out, and what comes next is a critical piece of the puzzle as you model future finances.
You are charging FedEx for your services. You will negotiate each of the following charges with FedEx. All of these charges combined account for money flowing into your business. It’s critical you understand how and when those charges occur. And how you can increase your cash flow! Following is a quick overview of the charges you will negotiate as part of your Independent Service Provider (ISP) contract.
This is a year of huge change for FedEx Ground contractors. How are the largest contractors in the nation preparing for these edits to their operations? Come network with them and learn from them in Q&A panels. You can also connect with dozens of industry vendors and leaders who can support transitions in your business.
Every FedEx Ground terminal serves a defined geographic territory. FedEx Ground closely monitors—and prevents via scale requirements—any contractor/entity from growing too large or too small within a single terminal. They do so by prescribing the number of daily stops an entity can make as a percent of all terminal stops.
If you choose to finance the purchase of FedEx routes, your lending institution may ask you to sign a personal guarantee. A personal guarantee is a set of assets you are promising to surrender or liquidate to the bank if you are unable to make loan payments and you default.
Keni Thomas is a distinguished Army veteran and former sergeant in Bravo Company of the 3rd Ranger Battalion. He was part of the special operations mission famously recounted in the book and movie Black Hawk Down.
Last week FedEx Ground announced 7-Day Residential Delivery for the entire year (not just during peak season). Along with that game-changing notice, FedEx Ground also revealed more about their plans to integrate SmartPost into Ground volume. Finally, the company also announced transformations in their large package or “incompatible package” capabilities.
Although it feels as if our world is already dominated by e-commerce, the market is not nearly done growing! We predict the e-commerce expansion to rise steadily for the next ten years. The total e-commerce volume will be so significant that we believe there will be enough business for all the current logistics players to sustain themselves and for new players to enter the market and thrive.
Amazon has its own last mile delivery trucks now. Amazon is starting its own delivery business. Amazon has a new fleet of planes. Amazon is investing in drones. Amazon is building a logistics hub in Kentucky. Amazon is a major threat to FedEx and USPS. Amazon is building the Death Star. Amazon hates Ewoks.
Route Consultant, the industry’s top route broker, will host hundreds of FedEx Ground contractors from across the United States and Canada for a one-of-its-kind event in Nashville, TN. Route Consultant is paying every contractor that attends $300 cash to offset travel costs. In addition to industry panels and presentations, the event will feature a private concert in the heart of Music City and an open bar.
Drones are sexy. We get it. The idea of drone delivery feels like the future. As fun to think about as drone delivery is, it’s not a realistic mode of transportation for the type of packages FedEx Ground delivers
You will often hear us (and others) note that FedEx route businesses are tax-friendly investments. What do we mean by that?
These businesses include substantial numbers of vehicles that you are able to depreciate over time. The vehicle depreciation in FedEx route businesses allows you to offset the revenue stream from the business.
The standard minimum down payment for a conventional bank loan is 25%. For an average priced route ($850,000), you would need a down payment around $212,500. This is a hefty amount of cash on hand. Plus, we recommend holding back approximately $50,000 of additional liquid funds as working capital.
If you are wondering about options to minimize or reduce your down payment requirements, you’re not alone.
Fuel cards are the way your drivers will pay for fuel (if you enroll in a fuel card program). These cards look like a credit card, but there are important differences between a fuel card and a credit card.
I could have never done this without Route Consultant. The information and training I received was invaluable. Your response time for email and phone calls was prompt, making me always feel like a priority. We always felt like they had our best interests in mind … Everyone at Route Consultants feels like family now.
— Kim M.
Within the last few weeks I have been to two events you have put on and I've been blown away! I learned so much even though I'm already a contractor.
— Jeff D.
Route Consultant did a very good job helping me evaluate my business for the listing and then working with both the buyer and myself to get us across the finish line.
— Leonard A.
Every team member we met along every step of the way provided the expertise, education and contacts we required to evaluate listings and successfully acquire our routes. [Connecting with Route Consultant] was our first and most important step.
— Mark B.
One word that makes RC stand out: integrity. They've delivered what they promised, made themselves available, and guided me through every step (big and small) with practical, yet brilliant advice.
— Gabe F.
I’m not sure how anyone seriously looking at FedEx would confidently buy a route without first engaging with your team. The initial learning curve is rather steep for an ‘outsider.’
— Rob E.
No one knows FedEx better than Route Consultant. We were extremely impressed by their diligence and professionalism in marketing the business, and they brought that same approach to bear in closing the deal.