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.
The difference between peak season success and peak season disaster balances on your ability to staff your operation appropriately. Contractors must have enough drivers to service extraordinary volume in their territory, but must avoid overstaffing and incurring outsized payroll expenses during this period.
We recommend contractors bring on additional drivers in late October and early November. This allows your operation time to train new staff, but avoids many weeks of high wages. Remember to account for your application and approval timeline when you plan to bring on new drivers. In our own operations, we find that bringing a new driver into the fold takes about 14 to 21 days from application to approved driver.
To help alleviate added pressure on your payroll as your team prepares for peak season, encourage full-time employees to plan unpaid vacation days in October and November. Remind these employees about the intense season ahead of them and of their need to rest and prepare.
Plan in advance to discontinue your contracts with seasonal employees immediately following December 24. The volume drop off is not gradual, but rather you will see a marked decrease in volume right away. Ending seasonal contracts as soon as package volume ends protects your payroll expenses.
Appropriately staffing your own operation protects you during peak season, but if you want to capitalize on peak season look around for opportunities within your terminal(s).
While your team ramps up for peak, you may notice new or uninformed contractors not preparing for volume increases. These understaffed operations are opportunities for you. Your operation can run additional volume (at an enhanced rate) for ill-prepared teams inside your terminal.
Similarly, your operation can make deals with other entities to run excessive volume for contractors who simply want to opt out of the chaos of peak. Planning these deals in advance helps everyone feel good about the coming season.
Current contractors can consult with our team about how we plan for peak season success. We can walk you through recruiting, staffing, and expense planning for your organization. We can also talk to you about how to identify opportunities around you.
If you are a prospective contractor hoping to purchase an operation just before or during peak season, FedEx Ground is going to want to know you are prepared for the intensity of the period. Our team prepares Peak Business Plan addendums for our prospective investors so they can show FedEx Ground they understand the season and they are committed to success.
Connect with our team to learn more about Peak Business Plan templates and addendums.