UPS and FedEx Two Ways to Drive Business
A chart comparing and contrasting the two firms.
Two ways to drive business
FedEx, which dominates air package delivery, is trying to grab a bigger share of the ground business, which is controlled by UPS. The key difference: FedEx drivers are independent contractors, while UPS drivers are company employees. Here’s how the two companies stack up:
| FedEx Ground |
(A division of FedEx Corp.)
|United Parcel Service Headquarters: Atlanta|
|Drivers: 17,000|| |
U.S. drivers: 74,000 (60,000 drive package delivery trucks)
|Driver annual pay: $40,000 to $70,000||Driver annual pay: $50,000 (up to $70,000 with overtime)|
|Workday: 10 to 12 hours||Workday: Eight hours plus up to two hours overtime|
|Advancement: Contractors can own up to four routes, which can boost their annual income to $130,000 or more. Are not FedEx employees. Not eligible for promotions.||Advancement: UPS policy stresses promoting from within. It draws management candidates from the driver ranks.|
|Benefits: None. Contract drivers have the option of buying into a FedEx-run retirement plan.||Benefits: Health insurance (company pays 100 percent of premiums for drivers), pension, company-match 401(k), stock-purchase discount, holiday and vacation pay, overtime pay|
|Other employee costs to company: None||Other employee costs to company: Workers’ compensation insurance, unemployment insurance|
| Cost of truck leasing/purchase, fuel, maintenance, uniforms, |
equipment: Paid by contract drivers
|Cost of trucks, fuel, maintenance, uniforms, equipment: Paid by UPS|
|Contracting process: Apply to company for a contract on a new or open route or buy an existing contract from another contractor. Existing routes can cost a few thousand dollars to more than $30,000. Company must approve contract transfers.||Hiring process: Employees typically start in part-time or package sorting jobs and apply for full-time driving jobs. The waiting list for a driving job is four to 12 years.|
|Initial training: Two-week course run by FedEx Ground includes safe driving, logistics, package handling, customer service and maintenance. Drivers paid to attend the course. Most contractors also ride along on a route with a veteran contractor before starting.|| Initial training: Drivers undergo a month of instruction that |
includes 20 hours of computer-based and on-road training, simulated deliveries in a mock city, tests and evaluations by instructors. Drivers also face three safety-ride evaluations during the first 22 days on the job.
| Ongoing training: Monthly Saturday-morning forums at FedEx |
Ground hubs to update contractors on safety, company operations and other developments. Attendance is optional. Billboard postings on safety at FedEx Ground hubs and newsletters also update contractors.
|Ongoing training: Drivers are part of an extensive UPS safety training program that spends $38 million annually giving employees 1.3 million hours of safety training each year. There are 350 employees assigned to safety and training activities as well as 2,400 safety committees.|
|Sources: FedEx and UPS|