Why Are There So Many FedEx Routes for Sale?

As a potential FedEx independent service provider (ISP), you may have already researched delivery routes for sale and discovered there are a lot more than you expected to find. Is it because FedEx routes are a bad business investment? Absolutely not.

Although we touched on this subject in a previous post, we still hear this question from a lot of potential buyers and decided it was worth taking a deeper dive. In short, the number of routes available varies based on several logical factors.

Timing is everything. 

The number of available routes tends to fluctuate throughout the year, with a spike typically occurring after the peak delivery season (which occurs from early November through December each year). Why are there more routes available after that time?

Because contractors who are planning to sell their routes, either due to retirement or other life changes, will often hold off so they can get one last profitable holiday season in the books. This positions their operation in an even more favorable light for potential buyers, so it makes sense that they would sell their routes at that time.

The end of the year is also a time when people tend to reassess their careers, their living situations, and whether or not they want to continue doing the same thing or make a fresh start—another reason we often see an increase in available routes in the first few months of the year.

Location also makes a big difference in the FedEx route market. 

Depending on where you live (and are looking to purchase routes), it may seem like there are myriad routes for sale by owners and brokers. In heavily populated metropolitan areas, for example, or areas that have recently experienced expansive growth, the list of available routes can be robust.

However, quantity does not necessarily mean quality, so it pays to work with an experienced broker to ensure you acquire the right route business to own.

Regarding location, have you ever considered just how many FedEx routes have been strategically created all across the United States? The answer is more than you can imagine. FedEx is a multibillion-dollar enterprise and one of the leading logistics companies in the world.

With thousands of ISPs from coast to coast, all of whom own multiple routes, it starts to make sense why there may be a large number routes for sale at any given time. While it may appear like an abundance of availability, the actual number of routes for sale at any given time is a small percentage of the whole.

P&D contractors will sometimes switch to owning linehaul runs—and vice versa.

Often when a contractor is new to the world of FedEx routes, they will choose to start with a pickup and delivery (P&D) route business instead of buying linehaul routes.

Typically, P&D routes require less capital to purchase and are less expensive to maintain over time. Plus, because the vehicles required for P&D routes (and the overall vehicle fleets) are typically smaller, the cost to maintain and repair them is going to be lower.

Depending on the preferences of the contractor, some P&D owners may choose to transition to linehaul runs and sell their P&D route business.

Why make the switch?

Though more expensive to purchase and maintain, linehaul runs generally offer larger revenues and cash flows when compared with P&D route businesses. Linehaul contracts pay on a per-mile basis and a single run can generate over four times more revenue than a P&D route.

Moving 12 million packages every day requires a lot of routes.

At the end of the day, the U.S. population keeps growing and cities and towns keep expanding. In response, logistics leaders like FedEx have to keep pace by continually broadening their reach to ensure businesses and individuals can ship and receive their packages.

And of course, just like with any other industry, FedEx contractors will also continually enter and leave the business as their needs and situations change.

Partner with KR Capital to build a profitable route business. 

As the leading FedEx brokerage firm in the nation, KR Capital has sold routes all across the United States, totaling more than $150 million. As a client, you will gain access to our vast network of FedEx lending partners, along with a comprehensive resource library to streamline the FedEx approval process and help get your dream business up and running.

Read through our glowing customer testimonials, then contact KR Capital at (503) 664-0753 to get the process started. Or, fill out our online buyer request form to receive an email alert when new opportunities that match your specific criteria become available.