FedEx contractors will:
- Own their own corporation
- Maintain a contract with FedEx which defines the contractor’s responsibilities and expectations, compensation structure, service areas, etc.
- Own or lease their own vehicles
- Employ their own W-2 employees (drivers, managers, etc.)
- Oversee and/or manage the operations of their business in accordance with FedEx standards
- Receive weekly payments from FedEx
- Manage all financial aspects of the business, including vehicle maintenance, payroll, fuel, insurance, etc.
- May buy and sell FedEx routes at their own discretion (FedEx approval required)
FedEx1 has been using the contractor model since 1998 and many route owners have found success in this industry. Owning a FedEx route is a great opportunity for those looking to sustain their own businesses within the support structure of a larger system.
How FedEx Contractors Work
Each contractor negotiates an individual contract with FedEx which governs the structure and amount the contractor will be paid. The contractor is responsible for its employees, payroll, insurance, vehicle maintenance and many other aspects of the business. They are also responsible for meeting FedEx standards and following FedEx regulations.
Benefits of Owning a FedEx Route
Owners of FedEx Routes have the benefit of being business owners without having to worry about marketing or advertising. Since demand for deliveries is on the rise, the business can focus on fulfillment without worrying about customer demand. FedEx pays contractors on a weekly basis so revenue is predictable and there is no need to pursue delinquent clients and unpaid invoices.
Drawbacks of Owning a FedEx Route
FedEx expects contractors to comply with certain standards to include customer service, safety, and other delivery metrics. With that said, contractors do not have the autonomy they would otherwise have if they operated their own business in another industry. Still, route owners with sufficient capital and a dedication to effectively managing the business should find success in the industry.