How Big Is the FedEx Market? Why Does It Matter When Selling Your FedEx Routes?

Category: Best Practices

From its humble beginnings in the early 1970s as a small startup company created to help businesses get their packages delivered faster, FedEx has since grown into a multinational shipping and delivery company serving more than 200 countries and territories across the globe—with an average daily package volume of 18 million.

So far this year, FedEx has generated close to $84 billion in revenue. Despite the ongoing pandemic, current labor market challenges, supply chain disruptions, and other other unanticipated hurdles, the company continues to report strong earnings. And with eCommerce still booming, FedEx is shifting its focus to stay ahead of the curve.

According to first-quarter earnings data released by the company:

As e-commerce drives higher demand, we continue to strategically invest in our network to boost daily package volume capacity, increase efficiencies, and further enhance the speed and service capabilities of our networks. Q1 highlights:

  • FedEx Ground opened a fully automated, state-of-the-art hub in Chino, California, can process 30,000 packages per hour and is strategically located to help address ongoing port congestion challenges.
  • We reached a final agreement on the industrial plan at our Liege, Belgium, Express operations regarding the intended European air network transformation – an important milestone in the completion of the air network integration, which remains on track for completion in Spring 2022.

 

Where do FedEx contractors fit into the picture?

FedEx contractors, referred to as independent service providers (ISPs), are not direct employees of the company but rather independent business owners operating under the rules, standards, and regulations of the larger corporate entity. These individuals provide their own vehicle fleets, employ their own personnel, and are paid a contracted amount based on delivery volume, miles driven, and other key metrics.

Thousands of FedEx contractors currently operate throughout the United States, including both pickup and delivery (P&D) and linehaul route owners. Those contractors, in turn, employ tens of thousands of workers (including drivers, managers, and support staff), giving you an idea of just how large the current FedEx market is—not to mention its vast potential for future growth.

Why does market size matter when you’re ready to sell FedEx routes?

FedEx contractors typically have a very intimate understanding of their daily operations. For contractors who may be contemplating selling their FedEx routes, understanding the FedEx market as a whole can provide some very valuable insights.

Among the thousands of current FedEx contractors, we estimate that less than 10% will be selling their respective businesses at any given time (either privately or publicly), which means hundreds of potential sellers will be vying for qualified buyers across the United States.

To this end, it is vitally important that sellers do what they can to differentiate their businesses from the rest. It is equally important that sellers receive sufficient buyer exposure so as to ensure their FedEx routes get sold at a fair market price.

KR Capital understands the FedEx market and can help you sell your routes.

At KR Capital, our team has been aggregating buyer data over the past several years. At present, our vast proprietary buyer database includes more than 10,000 active FedEx buyers, ensuring our clients receive sufficient exposure to get their routes sold in a timely manner and at the best price.

Contact KR Capital today or fill out our online Seller Info Request form to learn more.