When you absolutely, positively have to own your own business, you can buy your own FedEx route

ATTN Truck Drivers: "Ground route that services the Daytona Beach area along the speedway corridor & more. Route comes with an international P-100 truck free & clear. Buyer must pass background check & have a good driving record. Hurry, these routes do not last long. Asking price $99,000, gross $120,000."

Ever see this type of advertisement posted on the Internet?

Did you know that you can own your very own Federal Express route? Check it out. Go ahead, Google "FedEx Route for sale," and you'll be amazed at how many broker postings pop up.

Any individual who meets the necessary company, state and federal requirements can become an independent contractor with FedEx Ground, the ground delivery "sister company" of FedEx Express.

Independent contractor? That's correct. FedEx Ground started with 500 employees and 86 contractors operating out of 36 terminals and handling 1,788 packages. Today, 13,000 FedEx Ground contractors operate out of more than 500 facilities, delivering three-and-a-half million packages a day.

"The use of independent contractors is common in the ground transportation industry. The model has worked well for customers, the company and thousands of contractors who have built thriving businesses over the years," said Robert Boulware, corporate manager of Issues & Crisis Communications for Federal Express.

Contractors sign an operating agreement that details the terms of their contractual relationship.

John Thomas of Traverse City executed his first local contract in 2002. He named his company Windward Transportation, Inc., which operates three local routes.

"I learned of FedEx Home Delivery in an article in a business publication," said Thomas. "My routes are located in Grawn, Traverse City West and Leelanau County. TC is the busiest."

As an independent contractor, Thomas' company employs drivers for his multiple routes. He is responsible for expenses, benefits and insurance, as well as hiring and firing. As a manager/contractor for Fed Ex Ground, Thomas doesn't have to drive a delivery vehicle, but he chooses to anyway.

"I am currently driving the TC route," said Thomas, "but with the addition of one more route, I will devote my time to managing the company."

FedEx contractors must purchase their own vehicles, equipment and work areas, all of which they can sell for a profit. Upon starting an operation, they enter into an agreement based on customer demands, industry standards and regulatory requirements; workers must wear uniforms and drive logoed vehicles.

Furthermore, like any independent contractor, they are paid for results, not by the hour. Earnings are determined largely by "their own desire and business management abilities."

"We believe that a contractor has a flexibility, drive and efficiency not often found in a traditional employee driver workforce. As independent business people, contractors earn in proportion to how well they produce results and how well they satisfy their customers," said Boulware. "Independent contractors for FedEx Ground set their own start/finish times and are responsible for hiring or firing employees as they see fit to manage their businesses," he added.

According to a U.S. Bureau of Labor survey, 82 percent of independent contractors prefer their arrangement to traditional employment. Essentially, more people like to be their own boss.

So, how much will you pay for your FedEx route? The range is very wide.

Boulware said, "If a contractor purchases a work area from another contractor, the seller sets the amount. Many factors will influence that sales price including, but not limited to, the daily volume, customer density, number of vehicles and number of work areas being offered." TCBN found route prices online ranging anywhere from $60,000 for a single route, to $1,185,000 for a set of five with revenues reaching as high as $920,000.

The industry's consistent growth and success may be attributed to an increase in e-sales.

"Shoppers are now more comfortable ordering things online and enjoy the convenience of shopping this way. And FedEx is uniquely tied to the growth in e-commerce, helping online retailers facilitate this growing direct-to-consumer business," said Boulware. "While FedEx does not break out the number of shipments that come from e-commerce sources, online retail sales continue to grow and certainly increase during the holiday season."

How did it all begin?

The forerunner company of FedEx Ground was RPS (Roadway Package System), founded in 1985. RPS became one of the fastest growing transportation companies in history, reaching a billion dollars in revenue in only nine years.

"The company's success attracted the attention of FedEx and was acquired in 1998. Two years later, RPS was rebranded as FedEx Ground. That same year, FedEx Ground launched FedEx Home Delivery, the industry's only dedicated business-to-residential delivery service and the first to offer a Money Back Guarantee," said Boulware. BN

Comments

comments