One of the primary reasons to be a FedEx Ground contractor is peak season. Although it is also a stressful time, It’s when some of the greatest rewards of the year come in. While it is important that a route owner prepare themselves and their route for the busiest time of the year, it’s also when FedEx offers a great program to get contractors on board, often called the Peak Season Incentive Program.
Here’s how it works, and why FedEx Contractors do and should opt-in.
The Schedule K Difference
For peak season, one of the things FedEx offers is a lower bonus threshold. Once a route reaches a certain number of stops, the route owner receives a bonus based on the number of stops made over the threshold.
During peak, that stop threshold is lowered, and bonuses kick in sooner, but to receive them, drivers must opt into the program. If they don’t, they are not required to take on extra stops during peak, but their bonus threshold stays the same. Typically, a large number of drivers do opt-in, but not all.
Why might a driver not opt-in to schedule K?
Reasons Route Owners Don’t Join the Peak Incentive Program
While the peak incentive program works well for most FedEx Ground route owners, it does come with some additional responsibilities during peak. They include things like:
- Longer Hours
- Bringing on Driver’s Helpers (Runners)
- Adding Additional Trucks to Routes
- Higher Vehicle Expenses
- Risks Due to Weather.
While lowering bonus thresholds does help to offset these things, for some route owners, the resulting risk and extra work is not a large enough incentive. There are also risks that come with pushing the limits of a route and drivers when winter weather is often at its worst. As a result, somewhere around 90% of route owners opt-in.
What does the program actually look like, and how does it affect peak season?
Making the Most of the Bonus Threshold
There are few breaks for drivers and route owners during peak season, and agreeing to take on more stops just makes those even less frequent. However, in reality, choosing Schedule K can actually make your route run better and give you more breathing room. Here are some reasons why:
- Having a helper enables your drivers to do more stops in the same amount of time, and can decrease the number of hours they are on the road.
- Having extra drivers can help you concentrate your resources in a smaller area, saving time and fuel costs, and resulting in less stress that can come from higher stop counts.
- Extra vehicles can serve as backups in case your primary vehicles go down for any reason. It’s a great safety valve just in case.
- Extra bonus money improves your holiday cash flow and allows you to offer bonuses to your help without impacting your profits.
Route owners often find that choosing Schedule K improves their experience during peak rather than making it worse.
What Does This Year Look Like?
This year, FedEx has reported that 96% of contractors have chosen to join the peak season incentive program. That is despite other issues the company faces, and is great news for deliverability during the busiest season of the year. And it’s good news for those drivers as well.
For the company overall, it means fewer temporary drivers and a more experienced and reliable delivery corps.
For those who may want to purchase a FedEx Ground route, the lead up to peak comes with great opportunities. You can learn the business from the best, and at one of the most profitable times of the year.
If you’re ready to purchase a FedEx ground route, or just want to look at your options, contact us here at Route Advisors. We’d love to chat with you, and we’ll be with you through every step of the purchasing process.
Happy delivering, and happy peak season!