16 FedEx Ground Routes, Fresno CA Delivery Operation

$2.3M

Revenue

$601K

SDE

2.3x

Multiple

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Full Editorial Writeup

This is a package of 16 contiguous FedEx Ground delivery routes based in Fresno, California, sold as a turnkey operation with 16 vehicles and 16 experienced drivers already in place. The business functions as an Independent Service Provider (ISP) under contract with FedEx Ground, handling last-mile package pickup and delivery within a defined territory. Contiguous routes matter here because they let the operator share loads efficiently across the geography, improving stops-per-hour density and lowering per-package cost.

The financial profile is straightforward: roughly $2.26M in gross revenue producing about $601K in SDE, a healthy 27% owner-earnings margin for a route business. FedEx pays inflation-adjusted revenue enhancements annually and volume has grown organically at a double-digit clip, which the seller cites as over 10% average annual growth since inception. The deal is structured with $950K cash, up to $300K in vehicle financing, and $150K in seller financing, bringing the headline price to $1.4M against a 2.33x multiple.

What makes this notable is the semi-absentee structure with a full-time manager already running day-to-day operations. The buyer inherits a going concern that generates cash on day one, with a built-in growth path through bolt-on acquisition of adjacent routes. The tradeoff, as with all FedEx ISP businesses, is single-customer concentration and the constraints of operating inside FedEx's contract framework.

Why we like it

The earnings quality is solid for the category: $601K SDE on $2.26M revenue is a 27% margin, and FedEx pays predictable weekly settlements against contracted volume rather than one-off wins. Vehicles and drivers are already in place, so cash flow starts on day one without a rebuild.
Durability comes from FedEx Ground's contracted ISP model where the operator owns a defined, contiguous territory that competitors cannot poach. Package volume is a structural need in a Fresno market of steady residential and commercial density, and last-mile delivery is not something households or businesses cut in a downturn.
Market tailwinds are real: e-commerce package volume has grown consistently and FedEx layers in annual inflation-adjusted revenue enhancements, giving the operator built-in price escalators without renegotiating. The seller cites 10%+ average annual organic growth, which if verified is a rare structural tailwind for a services business.
The operator advantage here is a scalable roll-up path. Contiguous routes make bolt-on acquisitions of adjacent territory accretive through shared load density, and a disciplined buyer can compound by rolling up neighboring ISP operators in the Central Valley.

How to improve it

Audit driver utilization and stops-per-hour across all 16 routes in the first 30 days, then rebalance loads to squeeze density out of the contiguous geography. Even a modest efficiency gain per route drops straight to SDE given labor is the dominant cost.
Build a preventive maintenance and fuel-management program for the 16-vehicle fleet to control the two largest variable costs. Negotiate fleet fuel cards and a fixed-price maintenance contract to smooth cash flow and protect the margin.
Institutionalize driver retention with a structured pay and bonus plan tied to safety and on-time metrics. Turnover is the silent killer of route profitability, and locking in the existing experienced drivers protects the value you just paid for.
Pursue adjacent route acquisitions aggressively while capital is cheap and the manager is proven. Contiguous bolt-ons share overhead and load density, so each add-on should carry a lower incremental cost than the base operation.
Tighten the management layer with clear KPIs and weekly reporting so the semi-absentee structure holds up under a new owner. Document standard operating procedures for dispatch, safety, and FedEx compliance so the business does not depend on any single person.
Model the debt service carefully given the layered financing (cash, vehicle financing, seller note) and stress-test coverage against a FedEx contract rate change. Refinance the vehicle notes once operations stabilize to lower the blended cost of capital.

Diligence notes

Verify the FedEx Ground ISP contract terms, remaining term, renewal mechanics, and whether FedEx must approve the buyer as the new contractor. The entire business is a single-customer relationship, so the assignability and standing of that contract is the deal.
Reconcile the revenue figures: the summary shows $1.4M but the detailed listing states $2,262,092 gross revenue, and the $1.4M appears to be the total purchase price. Confirm actual trailing-twelve-month settlements from FedEx statements before trusting the SDE.
Inspect the 16 vehicles, mileage, and maintenance records, and quantify near-term replacement capex. FedEx has vehicle age and branding standards, and a fleet nearing end-of-life could force $100K+ in unmodeled capital spend.
Validate the 10%+ organic growth claim and the FedEx inflation-adjusted revenue enhancements against multi-year settlement history, not seller narrative. FedEx also periodically restructures territories and rates, so understand the downside if volume or rates are cut.
Confirm the full-time manager's compensation, tenure, and willingness to stay post-close, since the semi-absentee thesis collapses without them. Also verify driver W-2 status, workers comp, and any DOT or safety liabilities on the fleet.

Source

Originally listed on BizBuySell. View original listing →