FedEx Ground delivery drivers do not work for FedEx. They work for one of 6700 independent companies that are contracted with FedEx to deliver packages on a particular route. These routes are quite valuable: you get the benefit of the FedEx name, you get an exclusive territory to deliver packages to, and you can take advantage of the growth of package shipments as more and more people order things online for home delivery. The routes typically sell for about 2.5 to 3 times cash flow and there are lenders that specialize in financing them. The average route owner employs 5 to 10 drivers.
Where do I Find FedEx Routes for Sale?
There are a number of websites that list FedEx routes for sale. These include FedEx’s own route owner website: BuildAGroundBiz.com as well as business brokerage and other websites. These other places to look include BizBuySell, Routes to Success, KR Capital (a route financing company), Capital Route Sales, RoutesForSale.net, Route Tycoon, and BizQuest.
What Do Route Owners Do?
Most route owners are NOT absentee, unless they have been doing it a long time, own many routes, and have managers in place. Many route owners drive a truck themselves and also manage employees, oversee the overall company including business planning, hiring & firing, paying bills, making sure the trucks are being maintained, and acquiring additional routes for expansion.
How Might the Internet and Technology Impact this Investment?
That is a tough question to answer. In the short term, people are definitely spending more and more money on eCommerce versus physical stores and carriers like FedEx Ground benefit from that. A few other trends to think about including Amazon delivering its own packages, drones, and driverless cars. Amazon is gaining more and more market share and its Fulfillment by Amazon program where they warehouse other sellers goods is a big part of this. That might impact this investment if they have their own drivers or if they start using drones for deliveries. Driverless cars could be a huge benefit for route owners. Employing drivers is a huge part of the business. Eliminating them could eliminate a huge expense and make delivery routes much, much more profitable and eliminate many of the daily operations headaches.