How Do FedEx Routes Work?

Maybe you have seen the FedEx trucks driving around your neighborhood or the semi-trucks out on the road and you’ve even heard that you can own your own FedEx route. You can’t do that with other delivery services, so how do FedEx routes work?

Here are some of the details you might not know, and why FedEx is different than other package delivery companies.

Small Businesses and Corporations

When that person in a FedEx ground uniform comes to your door or your business, it’s not just FedEx at the door. Even single routes are owned by small businesses. Most FedEx route owners own more than one route, making them small corporations with multiple employees.

This type of arrangement has a lot of perks for entrepreneurs. They get the perks and independence of owning their own business and keeping the profits, but they also have the backing of an internationally recognized and successful brand.

FedEx offers a great deal of support, customer service, and safety training to help make every FedEx route business a success.

Employees vs. Independent Contractors

Rather than being employees of FedEx, each independent contractor has their own contract with FedEx. It details the geographic boundaries of their route, their responsibility for that area, how they will be paid for pickups and deliveries, and more. Some routes in large urban areas can deliver over 200 packages a day.

Other routes have more miles to drive and fewer stops every day, but they still profit because of the way the contract is structured.

The independent contractor provides the equipment and if needed the personnel to complete the terms of the contract every day. This is why it is so important to them to provide great customer service, and make sure your business is happy with what the company does for you.

Route Knowledge and Personal Service

This results in business owners who know their routes and offer personal services. Many use online apps and programs to help route their drivers, saving fuel and making the delivery process better for the environment. At the same time, they are cutting costs and increasing their own profits.

For regular residential and business customers, they may even get to know their delivery driver and become friends with them. Personal service is a big deal to keep clients shipping with FedEx, and business owners have more incentive to do this than most employees. It directly affects their bottom line.

Even when multiple route owners hire workers to deliver packages for them, they have a strict vetting process to make sure that they are not only safe but provide the same level of customer service those on their routes have come to expect.

Line-haul Routes

These are the trucks that you see pulling FedEx ground trailers up and down the freeways. They are a part of assigned lanes between hubs, occasional hauls when the load in any one area is heavy or a driver goes on vacation, and other lines of shipping. To own a line-haul route, you need to have some regional or long-haul trucking experience, and you should also understand the logistics industry.

While profits are higher with line-haul routes, there are also higher costs and greater risks. If you think you might want to get into this type of FedEx business, talk to a specialized business broker like We Sell Routes and other business owners to determine if this kind of route is right for you.

Many FedEx line-haul route owners started in the FedEx pickup and delivery side of things, and transition to owning line-haul routes when they have more experience and industry knowledge. This might also be a good path to ownership for you.

Stability and Income

When it comes to small businesses, a FedEx route has some of the most stable profit margins and income for their owners. The logistics industry continues to grow with eCommerce and shipping reaching an all-time high.

As long as there are boxes to deliver, a FedEx route will have the potential to be a very profitable business.

Buying a FedEx Route of Your Own

How do you get in on this business opportunity? There are often FedEx routes for sale in your area, as owners move on to other challenges, end up with extra routes when theirs grow too large, or when they reach thresholds FedEx has in place for how many routes one owner can control in a single terminal.

For a list of the best routes and how to choose the one that is right for you, contact us at Route Advisors. We’ll help connect you with the right route and will assist you through the entire process of purchasing a route of your own. Don’t miss out on this great business opportunity.