Like many other shipping companies, FedEx has grown exponentially with the surge of online shopping and the resulting shipping boom. Ecommerce is driving the logistics market to grow faster than ever. FedEx profits tripled Year over Year, and the company expects rapid growth in both FedEx Express and FedEx Ground to continue.
What does that mean to FedEx Ground contractors and route owners?
As Shipping Grows So Do Routes
The first, and perhaps most obvious effect of the shipping boom is that as shipping numbers rise, routes grow as well. FedEx routes grow in two distinct ways:
- There are more residential deliveries as people order more goods, and even order more home office supplies to continue working remotely.
- There are more business deliveries, as ordering online becomes the norm.
- There are more business and residential pick-ups, as more people ship from home for business, and as eCommerce shipping increases.
Businesses that were shipping few packages before are now shipping things in greater numbers. Residential customers who rarely shopped online now make it a regular practice. All this adds up to growing FedEx Ground routes.
Routes are More Compact and Therefore More Profitable
FedEx contractors often discuss route density and profitability in the same sentence. The less distance you have to travel to make a delivery, the less you spend on fuel and time, often measured in driver salaries or profits if you are a single route owner.
In a neighborhood where you once might have had one or two deliveries in a day, now that number has risen to 6 or 7. Each only adds a little additional time, and little if any fuel to route costs, yet each delivery adds revenue.
Denser routes also spawn another phenomenon that benefits drivers and contractors.
FedEx Ground Routes Grow and Even Split
As a route gets denser, it may also grow to the point where it can split off into two routes. This is a good thing but comes with the challenge of the contractor deciding to keep the route or to sell it off.
Keeping the route can work if the contractor does not exceed the maximum number of routes allowable within a single “station.” It does mean contracting or employing a driver, additional equipment, and additional administrative work. However, most FedEx contractors own multiple routes.
The other option is to sell the route to another contractor. If you are new to FedEx Ground, these are often great routes to purchase. They exist in established territories, and already have volume, but not an overwhelming amount. This gives you time to adjust and get on your feet with a solid, dependable route, and it becomes something you can grow with.
Growth and splitting routes offer a variety of opportunities for route owners.
Opportunities Abound with FedEx Ground
The true takeaway from this article is that opportunities abound with FedEx ground routes. As profits grow from the increase in online shipping, FedEx continues to reinvest in the various businesses that are a part of the company. Opportunities for contractors and route owners increase at the same time.
FedEx Ground Route ownership has always been a great path to starting your own business with the backing of an international brand with vast resources and immediate name recognition. Now, this path has even more benefits, and those will only increase as the logistics and shipping businesses continue to explode.
Are you ready to explore FedEx route ownership? Do you have questions? We have answers. Contact us today at Route Advisors. We’re here to help.