I'm currently looking into purchasing a package of FedEx routes in Austin and i would love to be able to hear from anyone that owns or owned in the past any fedex routes (ground or home, no line haul with this package).

I've read all kinds of things from sniffing around the net that many individual route owners had a rough go of it. I see fedex has now shifted to making all route owners be an actual businesses and run multiple routes and now treat all drivers as employees after all the legal wranglings with contractor/employee disputes. Wondering how this has shifted economics for the multi route owners who now have a stable of FT employees to offer benefits too as opposed to the independent contractor model of old.

Thanks to any one who may be able to chime in.

Who owns the equipment? FedEx?

No the route owner is responsible for everything. Once the package is handed to you at the terminal is 100% on you to get to delivered. Your truck, your employees, your gas.

https://www.reddit.com/r/investing/comments/2mtaov/anyone_invested_in_or_owns_a_fedex_deliver_route/

https://www.quora.com/What-are-the-problems-in-buying-a-FedEx-route-Is-it-a-profitable-investment

I don't and haven't owned a FedEx route, but I did work for one of their competitors and managed a small parcel operation. There are a few things you should consider if you're looking into this...

Drivers will be your biggest obstacle/headache (shocking, I know). The operation I ran was a true IC model with several IC's having 2-3 trucks running routes, and there wasn't a day that went by where there wasn't an issue with a driver showing up an hour late (if he even came at all) or deciding to come to work with an attitude. I employed 2 hourly "swing" drivers who would often be sent out to ensure we met delivery expectations from a driver being late or no showing. Due to the IC model, that was a cost I had to eat. The IC didn't like me "taking their money," but they did understand the commitment we had to on-time percentage to our customers.

If the Texans or Cowboys play Sunday/Monday Night Football, plan on having late drivers and no shows the next morning (include Sunday/Monday holidays as well). Since they'll be your employees, you can handle it however you feel is best. I dealt with the IC's, so I had no say in how they handled it but did have some indirect influence.

Like everybody else, drivers have a comfort zone and asking them to get out of it would make you think you're asking them to give up their first born. Lets say you have a route that covers the Energy Corridor and Katy, and the dividing line is Fry Rd (done by zips, but whatever). One day the EC guy has more than he can handle while the Katy guy could use a few more stops/deliveries, so you ask him to take a couple that take him out to Barker Cypress. He'll fight it tooth and nail about how he doesn't know the area and can't do it. He'll probably even threaten to quit. Having the extra deliveries is nothing more than a mental thing that will linger with him all day and could potentially impact how well he runs his route

I'm not saying all drivers are bad, but they're a special breed. It takes a certain type of person to be successful at it, and you'll probably turn over several drivers before you find a good one. When you have a good one, you do what you can to keep them as they'll make your life a lot easier. It's hard work with long hours, especially from mid-November through New Year's, but there's money to be made.

Technology is something else you need to be aware of. I'm not sure if FedEx provides the scanners or if it's your responsibility to buy them. If it is your responsibility, I'd suggest buying a couple of extra. They will break and there will be software issues, so having some extra to send out while you send the other in to be repaired will be needed. Not sure of the exact scanner type FedEx uses/requires, but ours were around $1500 per scanner and included an extended warranty IIRC (2-4 week turnaround on repairs). You'll find that some drivers catch on to technology with ease, and you'll not have any issues with them, but you'll also find drivers that look at a scanner and will make you think it's speaking Chinese to them. You'd think that would be the older drivers more so, but it really does apply to all ages. It's quite fascinating in today's world to see somebody who can't follow a few basic functions to scan an item out for delivery, delivered, or attempted. The real kick in the nuts is when a driver kicks ass on the delivery part but is a technological midget. We tracked scan compliance and held the IC's accountable for it, and I'm positive FedEx does as well.

Ok...well, this went a bit longer than I intended. I'm not saying this will apply to you or that this covers everything, but this is some of what immediately popped into my mind from managing a similar operation at one of their competitors.

Oh, I'll also say a bit about the trucks. You're responsible for them and the drivers (your employees) will treat them like you imagine a rental car has been treated. Have you ever gotten in your wife's car and asked "how long has that light been on?" Same thing but with larger repercussions. You need to be on top of any possible maintenance the truck will need and have a backup plan for the days when the truck is out of service since you'll still be responsible for the deliveries on that route.

Really appreciate your thoughts. Everything I have read or leaned talking with folks mirrors what you said: At the end of the day 98% of your job is managing unreliable drivers and looking for their replacements while keeping trucks running that are held together with duct tape.

It is, but if you're able to do find some good drivers, treat them right, keep your equipment running, and aren't afraid to get a little dirty yourself (drive if needed), you can make pretty good money. I had a couple of IC's who had accounting degrees (1 was a CPA) who ran it as an actual business and were easily taking home well into the 6-figures. They both had great drivers who had been with them for a few years and they stepped in to run the deliveries when a driver wanted off. They were also on top of the trucks and kept them well maintained.

One of them made me laugh because he employed this guy that was probably 5-foot nothing to be his "assistant" who he called Beetlejuice. Essentially, all that guy did was help load the drivers in the morning and would fill up the trucks and give a general inspection (tires, mileage, etc) each night when the drivers were back from their route. He also washed each truck every Friday night so they were clean going into the next week. On days when a driver wanted off, the IC would run the route and have Beetlejuice load the truck and deliver the actual packages while the IC did nothing but drive the truck. His employees loved him and other drivers wanted to work for him, so he was doing something right. I asked him about it once and he just told me that he held them accountable but was fair, and wasn't afraid to make a little less to pay them more. I think he was the only IC who gave his guys a bonus around Christmas due to how hard they had been working through the holidays, so I'm sure that helped.

Now I want to be an IC so I can have a sidekick named Beetlejuice.

I thought FedEx drivers made $75K/year.

Drivers may, but the route owner is making more.

wrong post, delete. Sorry