“Great management team!”
“Owner will stick around.”
“Best manager and drivers in the whole station.”
These are a few of the phrases that catch the attention of anyone looking to purchase FedEx Routes.
Not coincidentally, these are the same lines used by brokers to sell potential owners, ready to spend hundreds of thousands of dollars, on a business that is advertised to them as turn-key.
This is a sad reality in our industry – entrepreneurs from outside the final mile system see a low-cost, low-effort, money-making opportunity when, in fact, it turns out to be quite the opposite.
More often than not, the manager turns out to be ineffective or even working against the new owner, the drivers are unmotivated and taking too many risks, and the entire operation is in turmoil.
Such was the experience of Steven Palmer, who in 2017 purchased eighteen routes in the Denver area. Although the business was advertised to Steven as “turn-key” and “absentee-ready” as he lived out of state, he knew that it would not be so easy; however, few could ever anticipate the ticking time bomb that was about to destroy the business.
“The manager we inherited had no interest in teaching us the business and ruled drivers by fear and intimidation,” Steven says, “miraculously we made it four months before it all blew up.”
Steven was trying to push innovation, professionalism, safety, and positive change in the company, while the manager he inherited from the “turn-key” FedEx business was actively working against him: “The manager quit by text and left a truck full of packages.”
Furthermore, this manager convinced two-thirds of the drivers to leave the company and drive for other owners.
From that point on, Steven was focused merely on survival. He leased an apartment and eventually ended up moving his whole family from Salt Lake City to Denver, where the business was. He borrowed money to make payroll.
He was also introduced to Matt Pickett, founder of Logistical Resource Group. Matt was able to bring his industry knowledge and expertise to the table, helping Steven reconfigure his floundering new business.
The first order of business was recruiting new employees, which Matt had a specific system for. That system is today known as DriveHire. Using a new recruiting strategy helped get drivers back on the road quickly, despite the mass quitting of previous employees.
Besides just recruiting, Matt designed a pay structure for the employees, and gave Steven templates of his own Employee Handbook and HR documents to get the business running more smoothly.
“Steven Palmer is an extremely business savvy, intelligent and hard working owner. His first year was a huge struggle not because of his leadership, but because of the expectations he was given when he bought this business. They were completely unrealistic,” said Matt of Steven’s first year.
Turning It Around
Bit by bit, his company went from failing multiple routes and having to have their routes serviced by other contractors, to having a strong culture and team. Steven has assembled a first-rate staff including safety, HR, and fleet managers, was one of the first contractors to pioneer GroundCloud, Star V scanners, 401K’s and full health/vision/dental insurance, and plenty of other bonuses.
Steven is now one of the biggest and most successful contractors in the Denver area, although he would never tell anyone that.
“We can be so much better. I once was taught that a great CEO ‘works on the business, not in it.’ It applies to FedEx contractors perfectly. The joy is in the journey!”
Time, money, and effort are the keys to success when it comes to running a business in the final mile industry. The nature of our operation is not, and never will be, an “easy business.”
That’s not to say that running a logistics business is not a worthwhile investment. We truly believe it is. But before making the investment, one must fully understand the nature of the business they are entering. It is by no means a hands-off operation.
Relationships cannot be transferred from one owner to another- they must be built over time which requires time, money, and effort. In the end, we are not in the business of packages; rather, we are in the business of people. If the company is not built on trust and solid relationships, it is bound to fail.
Special thanks to Steven Palmer for sharing his testimonial and taking time out of his busy schedule to do so!
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