The Business of Independent Service Provider Contracting

Many successful FedEx contractors reach a point where they are ready to grow. With reliable returns and strong cash flow, a FedEx contracting business is an attractive model for expansion. However, this growth brings a critical decision: should you expand your operations close to home or pursue opportunities in remote locations?

While expanding can significantly boost your earnings power, the location of that new operation can make or break your success. We've compiled many of the common lessons and experiences from those who have already traveled this path and the findings are below.

Expanding your FedEx operation into a new terminal is a significant undertaking. It’s an opportunity for massive growth, but it also comes with a unique set of challenges. From securing trucks and drivers to engineering new routes, the process can feel overwhelming. However, with the right strategy and support, you can turn this complex venture into a major success.

Recently, eTruckBiz had the chance to speak with Dan Barry and Vince Stempien of Dan Barry Enterprises, two service providers from the Detroit area who just stood up a new operation in the Ann Arbor terminal. Their experience provides a valuable roadmap for any contractor considering a similar expansion. They grew from five trucks in 2017 to running 17 on their busiest days in Detroit. Their consistent performance, including achieving "Entrepreneur of the Year" two years in a row, earned them the opportunity to expand.

However, the new opportunity was different. The Ann Arbor service area was more rural, with a 45-50 minute drive from the terminal to the CSA. When the previous contractor walked away unexpectedly, Dan and Vince were asked to start the very next day—a full month ahead of schedule. They stepped up, but the sudden start created immense pressure.

As you know, the FedEx space is evolving rapidly, and along with it comes an unprecedented opportunity. Network 2.0 initiatives are reshaping the landscape, creating additional pathways for new revenue. Ambitious service providers can expand from single-facility operators to multi-facility enterprises. This transformation represents the future of FedEx contracting—but it also introduces complexity that can overwhelm unprepared contractors.

The difference between thriving expansion and operational chaos comes down to one critical factor: standardization. Contractors who implement consistent administrative systems and operational processes across all locations position themselves for sustainable growth.

Your most valuable assets aren't sitting in the FedEx terminal van line—they're the people sitting behind the wheel. While trucks depreciate and technology becomes outdated, a strong team multiplies in value over time. Building a high-performance culture isn't just about finding good drivers; it's about creating an environment where top talent thrives, stays, and helps your business grow.

The transportation industry faces unprecedented challenges. Driver shortages continue to impact operations nationwide, while rising operational costs squeeze profit margins. Service providers who focus solely on equipment and logistics often struggle to maintain consistent performance. The difference between thriving businesses and struggling ones often comes down to one factor: their people.

We know that building and maintaining a strong team culture is difficult to execute with today’s culture and constant compliance standard changes. Smart service providers understand that investing in team development isn't an expense—it's the foundation of sustainable growth. When you build systems for effective driver recruiting, comprehensive training, and long-term retention, you create a competitive advantage that compounds over time. Your best drivers become ambassadors who attract other quality candidates, creating a positive cycle that strengthens your entire operation. We are here to help you make this happen.

Look, we get it. The dream is to grow. More routes, bigger fleet, more revenue—it’s the ultimate flex in the FedEx Ground world. You see other contractors acquiring new territories, and you think, "It's my time to scale."

But what if we told you that the secret to real, sustainable growth isn't about getting more, but about mastering what you already have?

It's a counterintuitive truth, but one that separates the players from the legends. The pros know that trying to expand a business with cracks in its foundation isn’t scaling; it’s just amplifying problems. A small inefficiency you can ignore today becomes a financial disaster in a larger operation. A minor staffing headache becomes a full-blown crisis.

This isn’t about discouraging ambition. It’s about building a business so solid, so smart, that when you’re ready to grow, FedEx practically hands you the keys.

This is the strategic playbook you need to read before you make your next move.

Expanding your business by operating out of multiple FedEx locations is clearly the future for those willing and able to open the door to significant growth. This move allows you to access new markets, improve business efficiencies, and enhance your overall revenue and profitability. However, such growth doesn’t come without its challenges. Managing operations across multiple locations requires thoughtful planning, robust systems, and the right tools to stay organized and profitable.

Whether you're exploring this opportunity for the first time or refining your current expansion strategy, this guide (and successive parts) will walk you through actionable steps to grow. It will also cover the benefits of leveraging powerful cost-reducing and business simplification tools like eTruckBiz's AdminIQ, PerformanceIQ, and BudgetIQ to streamline administration, maximize operations and manage finances effectively over multiple facilities.