Frequently asked questions
From compensation to contact information, get the answers you need.
Business Relationship
FedEx is a federally regulated motor carrier that specializes in package information, transportation, pickup and delivery, and provides services in the United States and Canada.
FedEx contracts with independent businesses that utilize their own employees to provide package pickup, delivery and/or transportation services to customers within an agreed-upon service area. These independent businesses, or service providers, retain sole and exclusive authority to hire, train, discipline, or terminate their personnel as well as set compensation, payment, work schedules and times, assignments and other essential terms and conditions of employment in compliance with Applicable Law.
FedEx contracts with service providers that are independent businesses that are established as for-profit corporations under state/provincial law in the United States or Canada, and not, for example, with LLCs, LLPs, sole proprietorships, partnerships or limited partnerships (LTDs). Businesses must be registered and remain in good standing in the states/provinces in which they are incorporated and in which they conduct business.
FedEx does not contract with businesses that have company names that conflict with or infringe upon FedEx trademark, copyright, and/or brand/customer service interests.
No. FedEx and the service providers do not have a franchisor-franchisee relationship. As a corporate entity and employer, the service providers have the sole right and obligation to determine how best to ensure that the agreed-upon results are met.
In contracting with FedEx, independent businesses provide two types of services to FedEx and its customers:
Pickup and delivery (P&D)
Using vans or small trucks, picking up packages from shippers and transporting to the local FedEx station — and, from the destination station, delivering to business and residential recipients
Linehaul
Transporting FedEx-owned trailers over the road from station to hub, hub to hub, and hub to station — and, in some cases, between customer locations and stations or hubs (“spotted trailers” or “spots”)
Service providers are paid an agreed-upon amount, based on the volume of stops and packages delivered, and other terms provided for in the agreement with FedEx. Payments for services rendered are made on a weekly basis.
Driving personnel
No. The business owners are not required to operate, or be licensed to operate, motor vehicles. However, a business owner who wishes to drive under FedEx motor carrier authority may only do so if he or she meets all agreed-upon safety standards and the contractual driver qualification verification terms.
As independent businesses, service providers employ their own personnel, bearing all responsibilities for:
- Employer-related expenses, including wages, salaries, benefits, employment taxes, unemployment insurance, workers’ compensation coverage, and any others mandated by local, state/provincial, and federal governments
- Payroll deductions, maintaining payroll and employment records, and complying with all applicable local, state, and federal/provincial laws (including wages, deductions, overtime, rest and meal periods, etc.) including the U.S. Fair Labor Standards Act, as applicable
- Training their personnel
- Ensuring employees are legally authorized to work in the United States (or Canada, as appropriate)
Each agreement with FedEx contains its own apparel terms. Generally speaking, however, most service providers agree to provide FedEx-designated apparel for all employees who have contact with the public under the terms of the agreement in exchange for additional compensation.
Vehicles
Under the terms of the agreement, it is a service provider’s responsibility to obtain insurance coverage, including, but not limited to, automobile/truckers' bodily injury and property damage coverage and workers’ compensation, consistent with the agreed-upon minimum coverage contract terms. FedEx maintains insurance coverage for public liability, and for cargo loss and damage risks.
In Canada, service providers agree to obtain statutorily required minimum third-party liability, vehicle coverages, and cargo insurance.
No. FedEx does not lease vehicles to service providers. The service provider is responsible for obtaining the appropriate equipment to provide services under the agreement.
For P&D service providers, the following types of vehicles meet the ISP Agreement terms: straight trucks, sprinter vans, step vans, box trucks and cargo vans. For linehaul service providers, tractors are the only vehicles that may be used.
Linehaul
A service provider may annually register its own tractors to obtain base plates, or it may authorize FedEx to obtain base plates on its behalf. If FedEx obtains the base plates, the service provider agrees to provide all documentation required by the registering state and to bear the cost of the registration and base plate.
Pickup and Delivery
A contracted service area can consist of one or more contiguous full or partial ZIP/postal codes and/or street address ranges, in a geographic area that is both business and residential. Contracted service areas are subject to minimum and maximum stop scale guidelines, depending on station size.
A maximum of one contracted service area can be contracted per service provider, per station, per agreement.
Getting Started
You will need to obtain necessary permits and licenses for transportation. Service providers agree to register as an S or C corporate business and maintain good standing as an employer in the state or states in which they do business. They also agree to assign only personnel who are classified and treated as employees of the service provider to provide services. The personnel-related costs and/or anticipated costs are considered in the negotiated charges offered. Service providers agree to comply with applicable employment laws and agreement terms.
Service providers and FedEx agree upon an effective date and an expiration date for an ISP Agreement, typically 1 to 2 years. Service providers interested in continuing to contract with FedEx follow the End of Agreement process.
While FedEx does not facilitate the sale or purchase of an existing service provider’s business or assets, in certain circumstances and select markets, prospective service providers with the necessary experience and financial capacity to meet FedEx contracting standards may have the opportunity to request that FedEx share their contact information with businesses currently contracted to provide services for FedEx. This is facilitated within the “Assignee Marketplace.” Those businesses may contact the prospective service providers directly if they are interested in discussing the terms of any potential assignment. FedEx is not a party to those discussions or transactions.