Premier Route Consulting

FedEx Route Brokers, Selling FedEx Routes, FedEx Routes for Sale

How FedEx Contractors Get Paid

We will focus on the ISP P&D model when discussing how a FedEx contractor is paid. FedEx uses a more simple format for paying Linehaul contractors. If interested in learning about Linehaul pay structure, please contact us.

Revenue Comes In Buckets

As a FedEx ISP owner, you are paid by FedEx in different “buckets” and they are categorized as follows: Annual Service Charge, Per Stop Charge, Surge Stop Charge, Per Stop Fuel Surcharge, Per Package Charge, Large Package Mix Charge, Apparel Brand Promotion Charge, Vehicle Brand Promotion Charge, eCommerce Stop Charge, and eCommerce Package Charge.

We will go into a few of these throughout this post, if you would like a more detailed explanation of how an ISP is paid, contact us for more information.

Fixed vs Variable Charges

Some of the rates paid by FedEx are variable such as per stop and per package. Other rates are fixed such as your Annual Service Charge and vehicle/apparel promotional charges. The main difference between fixed and variable charges is growth potential. Obviously you have more opportunity for higher revenues with variable rates. As FedEx grows, you grow. During the renegotiation period of your contract, this is something to keep in mind.

eCommerce Charges

As previously discussed, FedEx pays contractors per package and per stop. This is separated further with the addition of the eCommerce Charges for stop and package. Essentially an eCommerce charge is paid for delivery to a residential stop. In contrast, your “normal” stop and package charges are paid for delivery to a commercial or business stop. ECommerce stop charges are typically lower than your “normal” stop charges.