These routes will originate in the same place but the destination will vary as FedEx needs change. They utilize semi-trucks to service regional pickup and deliveries for large companies such as Wal-Mart. Before you buy, it is important to understand differences between each business. Estimated of FedEx linehaul contractors nationwide.
Linehaul Runs Linehaul Routes can run either intra- or inter-state, hauling trailers between FedEx hubs. Linehaul routes consist of three types of runs: Dedicated Runs These runs operate continually along the same route for example, they might go from Asheville to St.
Unassigned Runs These routes will originate in the same place but the destination will vary as FedEx needs change. Maybe you need an extra truck on stand-by in case one of your trucks breaks down. It can be stressful and will require your attention at times, but if have a reliable and competent team to do the actual deliveries for you and take care of the normal day-to-day activities, and your contingency planning is well-thought out and effective, your FedEx routes can be a terrific source of mostly passive income.
FedEx routes have undeniable market value and a robust marketplace as we discussed before. This means that you can generally sell your routes when you are ready to move on.
When selling, having the FedEx name behind you only helps. Buyers will be more likely to trust a business model that is tied to the FedEx brand. This will make your FedEx route far easier to sell than an unknown business with comparable earnings. Owning a FedEx route business can be liberating, especially if you feel trapped by a job.
This is an obvious point, but can't be ignored. You need to make sure your operations are running smoothly, but as the owner of the business, you do not need to answer to anyone.
Hard to put a price on that. A FedEx Route business is expensive to start. If you add up the down payment to buy the FedEx routes and the cash reserves you will need as working capital, the cost of starting a FedEx route business can be very high.
If you want to buy an average-sized FedEx route business, you will pay much more. Related reading : Interested in a passive income business that is more affordable to start? You may want to check out my articles on these other passive income businesses that have a much lower cost of entry:. Running a FedEx route business is going to require dealing with drivers and managers if you use them.
Whenever you manage employees, there is always risk. Your drivers may quit right before the winter holidays when you are getting crushed with package volume. Your manager may move on to bigger and better opportunities.
All sorts of problems can arise when dealing with people. And finding qualified and reliable drivers is no easy task. You will also need to make sure they are trained, which can take some time. Your manager can be a big help here, but as the owner, you need to ensure it gets done properly. If you are operating a linehaul route, the task of finding qualified and reliable drivers is much harder.
If one of your trucks breaks down, you will need to fix it asap. Or you will need another truck to step in. That's because the packages must get delivered, even when the unexpected happens.
And to be honest, trucks breaking down is not an unexpected occurrence. They will break down at some point given how much they are used. Of course, these repairs and maintenance issues will impact your bottom line. So it is important to find a good mechanic that will take care of your repairs promptly and at a fair price.
If you are operating a linehaul route, the costs of maintenance are going to be much higher. As we discussed, there are many advantages to partnering with FedEx. But there are some drawbacks as well. They call the shots in this area. And rules relating to FedEx Ground can evolve over time. Under these rules, FedEx route owners must have at least 5 routes or stops per day.
They also must run both business and residential routes within their territory. These were significant changes and caused a lot of disruption for FedEx route owners, with many combining routes with other owners to meet the new requirements or selling their routes altogether to avoid having to comply. Source: KR Capital. The bottom line is that FedEx exercises a lot of control over their processes and programs.
Changes that they make in the future may not always work to your benefit. Is eCommerce increasing? A lot of people think that leaving corporate America and owning their own business must inherently be enjoyable. Let me tell you about a business that is more stable, lucrative and lower risk than a FedEx route…. If I told you of a business that had tremendously low risk , had a near flawless due diligence process, and was practically guaranteed to make money with sustainable long term demand, would you want this business?
What if you found out you were on call 24 hours a day, cleaning up basements with broken raw sewage pipes, or scrubbing up violent crime scenes? Both of these are low risk businesses that are highly lucrative. Hopefully this is driving home the point that this bonus risk is indeed a very real risk…. Routes can be enjoyable for sure, but they take the right person to like doing what they require to manage on a daily basis.
I personally love managing routes in a lot of ways , but I know other people that feel very differently than me as well. Get emailed when new articles release:. Some of the top sites that list FedEx routes for sale are: KR Capital : Broker that lists nationwide FedEx routes for sale, with about two dozen at the time of this writing.
BizQuest : Business listings website listing nationwide FedEx routes for sale, with about at the time of this writing. Capital Route Sales : Broker that lists FedEx routes with about a dozen listings at the time of this writing. Some of the logistics a FedEx contractor is responsible for are: Equipment: Contractors are responsible for buying or leasing equipment such as vehicles, as well as maintaining that equipment. HR: All hiring, training, and employee retention is the responsibility of the route owner.
Benefits: Route owners will be responsible for offering insurance and retirement plans if applicable. Accounting: Accounting and bookkeeping responsibilities such as payroll and business taxes are managed by the contractor. Types of Routes You Can Buy Before beginning the search for a FedEx route, you should narrow down the type of route you would like to purchase.
These are dedicated routes with set schedules. You own the route and can drive the route or can hire employees to do the driving. FedEx Custom Critical : This covers deliveries that require special handling such as temperature control. Linehaul routes: You drive a tractor trailer and cross state lines to deliver loads to and from designated FedEx hubs.
Bonuses: Contractors can earn bonuses for things like customer service and safety achievements. Expenses The three biggest expenses of owning a FedEx route that may impact revenues are: Buying the route itself Paying and retaining employees Vehicles and other equipment as well as fuel, maintenance costs, etc.
Benefits of Owning a FedEx Route There are several distinct advantages to buying a FedEx route, and these routes are highly sought after for a number of reasons. Some of the primary benefits of owning a FedEx Route are: No Sales or Marketing Required FedEx handles all of the required sales and marketing efforts involved in developing routes. May be Managed Remotely While FedEx does not advertise its routes as absentee owner compatible, FedEx routes may be managed remotely, and many route owners do not perform any package delivery, instead focusing on the management of route logistics.
Bottom Line Buying FedEx routes for sale can be a lucrative and flexible way to get into business with fewer costs than traditional brick and mortar businesses. Robert Newcomer-Dyer Robert has over 15 years of experience in sales leadership, finance, and business development. Was this article helpful? Yes No. Feedback Yes No.
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