FedEx Ground delivery can be a very challenging task. That’s why rather than managing a large team of drivers, the company contracts with an independent service provider (ISP), who then controls a section of delivery routes on its own. ISP manages a fleet of drivers who handle residential and commercial deliveries within an assigned customer service area. This arrangement is suitable for those interested in buying and selling FedEx routes.
Why do FedEx Contractors Sell their Routes?
The beginning of the year is the busiest time for transactions. During the holiday, package and shipping volume automatically double for location owners. In response, owners rent additional trucks and drivers to keep up with demand. When the dust settles in January, some owners will decide to move on to other endeavors. But there are many different reasons why FedEx contractors choose to sell their routes, and we’ve provided a few of the most common:
An ISP Wants to Retire
Retirement is a common reason for prompting a FedEx ISP to want to sell its route. FedEx Ground brand was officially launched in 2000, so it’s safe to say many contractors have been delivering packages for close to 20 years. Now comes the time to retire and pass the torch to someone who has more energy for the day-in and day-out demands of running a business.
Recent FedEx Changes
In past years, FedEx has made many significant changes to its ground operation as it adapts to evolving customer expectations. To maximize capacity, every ISP must have a 100% overlap in their customer services area between all commercial and residential stops. In some cases, if two or more ISPs have separate customer service areas that overlap, they’re forced to trade stops to meet these new requirements.
Overwhelming Rapid Growth
Oftentimes the FedEx delivery business was slow from the start, and the owners may have had to own only a single truck. But after a while, the demand grew, and the location had to scale up, eventually making it a powerhouse. Now, they’re managing million-dollar companies that require more trucks and increased hiring of employees to meet the growth. That’s more than some owners want to take on. This will often result in the owner opting to sell their routes to someone more eager to accept the increased business challenges.
A Struggling Business
Of course, not every ISP is a great business owner. In some cases, a contractor struggles in their business or comes to the realization that they’re not cut out for management, and decides they want out. These situations present unique opportunities for buyers. Because FedEx routes serve you as a guaranteed source for ongoing business, the risk of buying a struggling route is relatively low. A savvy businessperson can buy one of these routes at a reduced cost, make some mindful improvements, then reap significant returns down the road.
Contractor Wishing to Relocate
FedEx Ground delivers nationwide, which allows FedEx owners to sell their routes in one area to purchase a new route where they’re relocating. We maintain a nationwide network of qualified FedEx buyers and sellers. On top of providing a local buyer network for your existing route, we have an extensive database of routes available to you nationwide.
An Unprepared Contractor
Owning a FedEx route means you’ve entered the trucking business, which involves managing truck drivers. This means it’s time to buckle up and prepare for a good deal of vehicle maintenance. Some buyers believe purchasing a FedEx route means looking forward to strictly white-collar work. Upon entering this field, though, it’s clearly beyond their expectations. Many are surprised to learn the environment is very different from what they envisioned. As a result, it’s in their best interest to sell their route.
FedEx Scale Cap Requirements
FedEx doesn’t want any single ISP to own too much delivery terminal. For example, a company might place a 10% scale cap on the Portland, Oregon delivery terminal. If the ISPs have more than 10% terminal, then the owner may have to sell a portion of their routes to satisfy the FedEx scale requirement. While these owners might divest in one area to accommodate the cap, they might turn around and grow in another. Also, the owner might take the proceeds from the sale and reinvest them in the business.
Are you interested in buying or selling FedEx routes? Buyers Market Inc is always here to assist you. If you’d like to sell a route you currently own, we can guide you in marketing your business to qualified buyers. If you’d like to learn more, contact us by phone at 281-777-6325 or by filling out the Buyers Market contact page.