The Business of Independent Service Provider Contracting

Lately, we’ve been seeing a trend that is honestly pretty concerning. We are talking to more and more contractors who are selling parts of their business—or even the whole thing—by selling shares of their companies to unwitting buyers via the transfer of shares of company stock, without properly addressing the reassignment of their operating agreement.

There is a thought process, possibly being fueled by some unscrupulous brokers,  that is leading some to think that, "The company name isn't changing, so why does it matter?" But in the eyes of the contract, it matters a lot. We’ve seen people put their entire business at risk because they didn't realize that changing who owns the company is just as big a deal as changing who drives the trucks.

Wait! Read This First: > Before we dive in, let’s get one thing straight: We are not attorneys. We don't work for FedEx, and we aren't here to give you legal advice or tell you exactly how FedEx will act. We are just a team that has spent years in the trenches with contractors like you. We’ve seen almost every situation you can imagine, and we want to share what we’ve learned so you don’t make a costly mistake.

We aren't here to scare you, but we do want to wake you up. Whether you’ve been a contractor for ten years or you are looking to buy your very first operation, you need to understand that you can’t just "hand off" this business like a relay baton. There is a specific process you have to follow, or you might find yourself owning a company that no longer has a contract to operate.

For many FedEx Service Providers, the last six months have been filled with uncertainty. Since Descartes acquired PackageRoute, the clock has been ticking. Now, with the January 31 deadline looming, that ticking has turned into a loud alarm.

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.

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.

Managing a FedEx contracting business requires more than meeting delivery deadlines. Behind every successful operation is a business owner juggling multiple responsibilities—from vehicle maintenance to regulatory compliance. While the opportunity for profit is significant, the financial challenges contractors face can lead to overwhelming stress, especially without proper preparation or planning.