Then why did he sell it? There had to be some type of driver economic or other reason for him to decide to sell .
Fedex plan for you.
- Thread starter Exec32
- Start date
59 Dano
I just want to make friends!
He had $200,000 invested in his routes. Someone offered him $500,000 cash. To most people, that is a good reason to sell.
It will be fine
Well-Known Member
You really think the model would have survived for decades if making money was the exception?
Cactus
Just telling it like it is
We’ll see what the next few years bring. Don’t count on them being all chockfull of clover.
Cactus
Just telling it like it is
You haven’t met him either, so stuff it.
It will be fine
Well-Known Member
Uncertainty and change are par for the course in this business. You either adapt or bail out. FedEx telegraphs their changes well in advance. The only ones caught flat footed are fools. I try to stay ahead of the mandated changes. ISP transition, was already a multi route owner. Overlap mandate, I’ve been overlapped for years already. 7 day operations, I’ve got guys waiting for the extra day’s work. It’s not easy, but nothing they’ve done over the last 10 years has been shocking.
That's the point Dano. He probably decided not to wait around for a better offer that may never come. This is an attrition game as much as it is anything else and as was noted earlier in the end you'll see perhaps no more than a dozen contractors in a given state.
With the onset of 7 days a week some contractors rather than risk being unable to procure a reliable weekend workforce have chosen instead to go to a 4 on 3 off driver rotation having to give their guys 5 day pay for 4 days of work just to keep them from leaving. In some parts of the country it has in fact become that hard to procure quality dependable and approved drivers. Costly as it may be it was simply the lesser of two evils whereby a guy simply walks out and no guarantee anymore that another one will come walking in.
I try to look ahead in everything I am invested in. I knew ISP was coming at some point (like everyone else) ever since I started contracting. I never had a full set of drivers for more than a consistent 2 months in the few years I was contracting for X. The money was the best I have ever made outside of a great stock year I had. Unfortunately I had a driver that X made me terminate (wrongly in my opinion) and my long time manager put in his notice the same week that ISP was announced. I was burnt out and fairly pissed off and a single van contractor was really worried about how he was going to stay in the game. I saw potential that I was going to have no broker commission and probably could get a higher multiple for my route selling to someone who was increasingly worried about their own business and gave him my high price. Luckily SBA came through for the amount that I told him I’d sell for.
I sold my other business about a month ago and looking for the next one, but in the mean time I have gone back to help him since he is short staffed. I still actually do like the work and it is much nicer just being able to run a route. Figured I may as well do something instead of just sit around and live off sale profits.
Fred's Myth
Nonhyphenated American
It's called The Greater Fool Theory.
FedX ChaSpa
Member
so keeping drivers on the team and on the routes sounds like it was incredibly difficult. did you have to post and keep hiring constantly? and training too? did ISP create a hardship or would it have based on your business when it was announced? I have been considering purchasing routes, linehaul as well, but i am growing increasingly concerned about what i'm hearing.
Put yourself in the position of an FXG contractor employed driver. You glance across the road and look at the UPS driver $40 an hour.OT full employer funded healthcare, disability and pension No here you are doing the same work he's doing and as much of it for half the wages no OT all straight time zero benefits which by and large is what the average FXG employed driver gets. So ask yourself this question? How long would you be willing to put up with something like this?
I hope that you have good driving skills as well as good mechanical skills because not only are you going to be spending a lot of time in the truck but you're also going to be putting in a lot of time under the truck .
So if you want to get into this thing then put away your laptop, your Armani suits and Gucci shoes grab you handcart, carharts and tool box and have at it.
And by the way, don't forget your air compressor and tire machine because you'll be fixing a mountain of flat tires because it'a all going to be up to you Bud because you can't MAKE somebody work for you for nothing.
59 Dano
I just want to make friends!
Good grief, you putz. He had no intention of selling. He was making good money. The buyer approached HIM. He sold because it meant that he could have a paid off mortgage and 2 kids' college tuitions fully funded at the age of 40.
That's nice. None of that applied to him.
59 Dano
I just want to make friends!
Interesting. What was the market value of his routes?
Now that 500K might seem like a big chunk of change to you but if he has some Section 1250 and Section 179 recapturing to do along with cap gains taxes that score you so admire starts to get small pretty quick.
I didn’t post positions unless I received a notice or planned on firing someone. Others have a constant post regardless if they are hiring. I had no intentions on running a 6 day operation from everything that I was hearing it was basically an extra day with no extra work (at least at that time) so ISP was not for me. Constant training unfortunately comes with constant hiring, the most annoying ones were when someone quit at about the 2-3 month mark since they were just getting really decent.
Linehaul doesn’t seem like a bad gig, I am also considering looking into those as well. There is much more money per route and sounds like FedEx is nowhere near as big of a pain to deal with.
Of course it might be better. They know that you could peel off their vinyl one day and have someone else's on your tractor the very next day. But at the same time there are more X line haul contracts on the business sale boards than you saw in the past. Then again hope you've got a Class A CDL because you might have to grab your extra tractor and go get somebody in the middle of the night.
I would never suggest getting into any business without the ability to do the job. X requires CDL A, triples/doubles, air brakes and a year of experience incase you go through ELDP program. I definitely wouldn’t buy one if I wasn’t qualified to drive.
And going back to IWBF 3 of the 4 sales were entity sales (no name change) so it did move the approval much faster than a traditional sale.
It will be fine
Well-Known Member
What type of loony toon would buy a FedEx contractor’s company? That would take on liability for anything that company did in the past. Wage violations, workman’s comp claims etc. that’s crazy.
Saw it done at my station a few months ago but the seller had to pay off all outstanding truck loans. Heard the other day day the new owners are saying to themselves....."Just what the hell did we get ourselves into"?...... They're close to retirement and live more than 90 miles away. It made no sense at all.
