What is a Delivery Route?
FedEx Ground is broken down into 2 segments:
- Pickup and Delivery (P&D)— The Contractor has a defined protected territory in which they run day to day operations in. With the ISP change, Ground and Home Delivery are being merged together, creating more efficient operations and higher profits for the Contractors.
- Linehaul— Transports packages between stations or hubs and or customer locations. Assigned runs operate at a regular time and schedule, unassigned runs operate based off package volume needs and runs vary from week to week.
Key points for P&D and Linehaul Contracted Service Providers:
- E-commerce boom. This year’s Thanksgiving Day, Black Friday, and Cyber Monday was up nearly 18% each day over the same 3-day period as last year. (Source CNBC.com) This is leading to massive volume growth and dense routes = more profitability for the Contractor.
- Well balanced portfolio of shippers. You wouldn’t put all of your eggs in one basket in your retirement account, FedEx does not rely upon one Shipper for their volume. Amazon only accounts for less than 3% of the overall package volume for FedEx Ground.
- No accounts receivable! You are paid every Friday for the previous weeks’ work. No more chasing money down.
- No marketing money. The parent company does all of the sales process.
As a Contracted Service Provider, you must follow a few simple rules:
- You are in charge with setting the wages & salaries of your staff, establishing what benefits you want to provide your employees, paying and withholding all applicable Federal and State Taxes, unemployment insurance, workman’s comp insurance.
- Maintaining proper payroll and records.
- Use E-verify to ensure employees are legally authorized to work in the U.S.
- Develop a training program for new hires.
- Safety is always number 1. This starts on day one by implementing training programs, attending safety meetings, holding your own daily safety meetings with your drivers.
- Always be in good standing. This means paying your taxes and following Federal and State regulations for your business. Consult with your CPA or attorney to ensure you are compliant.
- Service: without good service a business will fail to exist. This means every package on every truck needs to be attempted to be delivered daily.
- Vehicles: They must be kept in good, operating condition set forth by DOT (Department of Transportation) standards and other standards outlined by the Parent Company.
- The Billboard: Your truck, and your employees are your brand, you want the best image possible.
Designations of Employees:
To keep the operation running smoothly Contractor’s designate 2 positions:
- AO or Authorized Officer: Has knowledge and power to address the Contractor’s business issues or financial issues.
- Business Contact: The point person for the day to day operation.
Disclaimer: Capital Route Sales, Inc. is an independent company that specializes in helping Contractors sell their FedEx Ground business and is not related to, or endorsed by FedEx Ground.