What’s a FedEx Ground Route Worth? A Guide to Margins and Valuations
If you’re considering investing in a FedEx route business, understanding profit margins and valuations is key to making a smart, strategic decision. Whether you're a first-time buyer or a seasoned entrepreneur, the financial fundamentals of this industry help determine both your short-term cash flow and long-term return on investment.
Let’s break down how FedEx routes make money—and how much they’re typically worth on the open market.
What Are Typical Profit Margins?
Profit margins vary by operation type, but healthy businesses in this space consistently show strong performance when managed well.
Pickup & Delivery (P&D) Routes
Typical Net Profit Margin: 10–25% of revenue
Industry Average: ~15%
These routes offer more predictable operations and fixed daily territory assignments. Labor, vehicle maintenance, and fuel are your biggest cost centers.
Linehaul Routes
Typical Net Profit Margin: 15–35%
Linehaul operations tend to have higher margins due to longer hauls and fewer daily stops. However, they also require more advanced logistics and scheduling expertise.
Reminder: If a route claims margins over 30%, dig deeper. Outliers may be the result of poor bookkeeping, unrealistic expenses, or unrepeatable conditions.
What Are FedEx Routes Worth?
Route valuations are typically calculated using either cash flow multiples or percentage of revenue. Here’s how they break down:
1. EBITDA Multiples
Most FedEx routes sell for 3x–4.5x EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Premium businesses with strong financials, clean operations, and seasoned managers can reach the higher end of that range.
2. Revenue-Based Valuation
P&D Routes: Usually valued at 60%–80% of annual revenue
Linehaul Routes: Often valued at 100%–115% of annual revenue
Because linehaul revenue is typically more stable and scalable, these operations often command higher multiples.
What Affects Valuation?
Several factors influence how much a route business is worth:
Profitability & Clean Books: Higher margins and well-documented expenses lead to stronger valuations.
Operational Maturity: Established teams, well-maintained vehicles, and SOPs drive value.
Geographic Location: Urban and high-density areas may be worth more due to volume potential.
Risk Profile: Routes requiring fewer trucks or managers often attract more buyers and higher bids.
Watch Out for Inflated Numbers
It’s easy to be drawn to listings advertising unusually high margins or valuations. But don’t let surface numbers fool you. It’s essential to verify:
Accurate labor costs
Realistic vehicle maintenance budgets
Proper insurance and tax accounting
Due diligence protects your investment—and ensures you're buying a business with sustainable earnings.
Ready to Explore Routes for Sale?
Margins and valuations are just the beginning. A great FedEx route business is more than just numbers—it’s about consistency, team reliability, and long-term scalability. Browse Available Routes Now.
Learn More
Want to dive deeper into how FedEx routes operate, what makes them profitable, and how to compare route types? Explore our FedEx Route 101 Course to build your knowledge and confidence.
