Hi Quinn1212: I will share with you what I have been able to find out via research and also share some opinions.
First and foremost: RIDE THE ROUTE. Get to the depot at the exact time your seller does and spend the entire day with him. View what he does in the depot before he leaves, while he delivers and when he gets back. 47 miles is a long distance ( 84 round trip ) and then you have mileage on top of that for deliveries on the route. This is not like regular driving. It can be very grueling working any type of route. It is good that your know the route area because Ground does not provide custom daily "street by street" guides ( pretty much similar to mapquest ) like Fedex Home does.
Second: If you have not done so already, request the FEDEX settlement sheets from the seller regarding the route you are considering. I would request a current sheet, which are produced on a weekly basis, and then I would also request all of December 2008's sheets. This way you can see the volume spike for the holidays and the last sheet from '08 should have a year end number.
Third: As far as FEDEX's concern for when you return to the depot. You are in independent contractor. You can start at 7 AM if you want or 10 AM if you want. It is up to you. Just make sure you hit all of your stops. Some packages may have to come back because being that GROUND is mostly commercial, the majority of packages will require signatures. If you cannot obtain one for some reason, it will have to be noted in your scanner and then you will have to redeliver the following day. KEEP IN MIND THIS: IF YOU ARE DELIVERING MOSTLY TO BUSINESSES, THEN YOU BETTER MAKE SURE YOU LEAVE EARLY ENOUGH IN THE MORNING AND ALLOW ENOUGH TIME TO HIT ALL OF YOUR STOPS BEFORE THE BUSINESSES CLOSE. YOU WILL BE SIGNING AN OPERATING AGREEMENT WITH FEDEX AND BE AWARE THAT UNDER CERTAIN CIRCUMSTANCES, FEDEX WILL HAVE THE RIGHT TO CEASE YOUR ROUTE AND CANCEL YOUR AGREEMENT LEAVING YOU WITH NOTHING. ( there are risks in every business venture.. Be Smart -- Allocate your time efficiently, make your deliveries and DRIVE SAFELY ! )
Fourth: Expansion. Make sure you have a business plan if you intent to expand. Funding is an issue. Most lenders will not make loans for routes. Staffing is an issue. You will need dependable, responsible drivers with a very clean driving record. Their mistake will be your mistake. Their productivity will reflect directly on yours. You have now gone from a single route owner into a business -- How will you form your business? LLC, Inc.,etc. ? Are you comfortable with managing people? What if they call in sick? Do you have back up drivers? ( you better. It's your business and the packages have to be delivered ).
Fifth: Splitting routes: I have to assume that the seller is referring to what is called a "supplemental route".. This would be when your route reaches its threshold level and requires another truck to handle all additional deliveries. Obviously, each particular truck can only handle so many packages and each route is designated with a threshold level. So, if the route you are referring to is on the cusp of consistently being near or above threshold, then you may have to consider leasing another truck with a driver. Fedex may ask this of you. I do not believe you have to accept packages over threshhold. From what I understand, if you are over, the depot may call you say at 3 AM and ask you what you want to do. If you do not want the amount over the threshold, then they will split them amongst other routes within the depot or FEDEX may take care of it themselves if they have any temp drivers on hand. Keep in mind, once you start making deliveries over threshold, you get paid more per package delivery ( the rate is very good -- at least for "home". I have to assume "ground" is similar ). Be prepared for this scenario come the holidays. I questioned the profitablity factor regarding this with a few route owners and it definitely makes sense around the holidays to consider renting an additional truck and hiring a temp driver ( FEDEX may supply them but at your cost). Pay the driver by the stop this way you are always in control of expenditures. It was shown to me on one of the home routes I was looking at which did an average of 145 - 170 stops per day exploded to between 300 and 400 stops per day in November and December. Paying the driver a reasonable per stop rate still yielded an extra $125.00 - $200.00 per day for the owner after all expenses. You do the math. That's a good number. One more thing regarding the supplement. Eventually if the supplement gets big enough, from what I understand FEDEX may assign it a separate route number so now you have two routes for the price of one. You can do with it as you wish. Keep it and work it or try to sell it off.
Sixth: Expenses: Rough estimates on home delivery ( not sure if they are the same for ground ): Scanner is about $23.00 per week. Miscellanous + truck washing is about $12.00 per week. These two expenses come out of your revenues on the settlement sheet. You receive credits on the sheet for "signatures", scanning and loading packages onto the "home" delivery truck ( Ground loads the truck for you so you may not receive this credit ) and the fuel supplement I believe is $0.11 per mile ( now "home" delivery route mileage is calculated according to the street by street directions. Ground does not provide this so I am not sure how they figure out their fuel supplement ). FEDEX requires you to utilize their insurance carrier and those costs will also be backed out. Liability, accident/collision and workmens comp will be auto deducted on the settlement sheet. I would figure on approximately $60.00 per week for these expenses. I would allow $25.00 per week for maintenance, $750 per month for truck lease and then gas, which will all depend on how many miles you travel. I would use these numbers though: There are 253 delivery days to a year ( allowing 5 delivery days per week and 7 holidays per year ) . Allow 10 miles per gallon at $2.75 per gallon. The variable is how many miles you drive per week. As an example, if you drove 500 miles per week at 10 Miles per gallon at $2.75 per gallon, that would be $137.50 per week or $7150 per year LESS $2860 ( .11 per mile suppluement according to home ) per year. I think it is safe to assume that you should generally allow between $21,000.00 and $25,000.00 per year in expenses for a single route. The only one large variable being is the mileage and the fluctuation of the cost per gallon for diesel. Of course, there could be incidentals -- truck break down, etc. THE SETTLEMENT SHEETS AND THE OWNER DOCUMENTATION SHOULD PERMIT YOU TO NAIL DOWN THESE EXPENSES ( AND REVENUES ) VERY ACCURATELY.
Finally, how about how you get paid: I only know this for home: You get paid per stop, per package delivered, per package pick up, per signature. You get paid an advertising rate per day because you are using the FEDEX Logo on the truck and wearing their uniforms. You get paid what is called a "core zone" rate every day. This rate is calculated on how far you first stop is from the depot and then how many stops you make per day. Of course, you get your fuel supplement. You will receive a monthly bonus for customer satisfaction and operating 100% according to your agreement with FEDEX. You will receive "x" amount per package delivered over threshold. If you are a multi route owner, you will receive more bonuses for excellent performance. The multi route bonuses level off when you own 5.
in response to: MoveForward
