FedEx Route Splits: Manage Both Or Sell One?
Despite a recent slowdown exacerbated by the COVID-19 pandemic, the population of the United States has been steadily rising since our nation was founded—and some areas more than others are experiencing significant growth.
New residential and commercial developments are emerging in both urban and rural areas across the country, which more often than not leads to an increase in the number of customers and delivery stops along existing FedEx routes. While a higher stop count can be good for business, it can also increase route time, which may hinder a driver’s ability to complete the route in a timely manner.
When this happens, the route owner has a few options, including adding an additional driver to the route or splitting the single route into two routes. Routes splits need to be approved by FedEx, and afterward the owner must decide to either keep both routes or sell the newly created route.
Why sell the new route?
When the time comes, deciding whether to keep the new FedEx route or to sell it will be an important business decision. Obviously, there was enough growth in your service area to prompt the need for the new route in the first place; therefore, you will likely see a lucrative return from adding that route to your business.
Side note: While there is no limit to the number of routes a contractor may own, FedEx will sometimes apply restrictions as to how large a contractor may become in a given terminal. These limitations help to guard against being overly reliant on any one contractor in a specific area, but there are sometimes exceptions to the rule.
However, adding a new route means you will need both a truck and a driver to cover the route. If your existing vehicle fleet and drive team are at their max, or if you simply don’t want the added responsibility of managing another route, it may be best to sell the new route.
What is the best way to sell FedEx routes?
While you can certainly choose to sell your FedEx routes on your own, working with a qualified FedEx broker is the best way to ensure the sales process goes as smoothly as possible.
Unlike a traditional business sale, there are countless nuances associated with the sale of FedEx routes, and a qualified broker will help you to navigate the process successfully and avoid any pitfalls or mistakes. Working with a broker throughout the entire sales process will ensure that fair terms are negotiated for all parties involved, you receive the best price for your routes, and confidentiality is maintained throughout the process.
Contact KR Capital for a free route valuation today.
If you already own multiple FedEx routes and don’t want the added responsibility of managing another route, the experts at KR Capital can help. With over $200 million in FedEx route sales to our credit, we have worked with hundreds of FedEx contractors nationwide to successfully value, market, and sell their routes for a premium price.
The KR Capital sales process was created to be effective and efficient for both buyers and sellers. Our proprietary database allows sellers to connect with carefully vetted buyers, and our thorough understanding of the FedEx approval process allows us to efficiently execute a quick and successful closing.
Contact KR Capital today to learn more.