Questions to Ask Before Signing a FedEx ISP Agreement

An Independent Service Provider agreement is a multi-year commitment that determines how you get paid, what you're responsible for, and what your business is worth when you eventually sell it. Most of the questions below have good answers. The reason to ask them before signing is that afterwards they stop being questions and start being facts about your life.

This is not legal advice. An attorney experienced with these agreements should review the document before you sign, and an accountant should look at the structure. What follows is the operator's list — the questions that determine whether the economics work, which is what makes the legal review productive.

Term, renewal, and exit

• How long is the initial term, and what is the renewal mechanism?
• What notice is required on each side, and by when? Put the dates in your calendar the day you sign.
• What are the grounds and process for termination, and what happens to your equipment, drivers, and obligations if it happens?
• What is the process for selling or transferring the CSA later, and whose approval does it require? Your eventual exit is governed by this document.

How you actually get paid

Read the Schedule C as the revenue model it is, and make sure you can answer these without looking:

• Which charges are fixed and which are variable? This single split determines what happens to your income if volumes drop. Model it before you sign, not after.
• How is each variable charge triggered — per stop, per package, per some other unit — and how is that unit counted?
• How does the fuel surcharge work? It floats. Understand the mechanism and treat it as a pass-through that moves, never as dependable margin.
• What situational charges exist — surge and peak amounts, large-package handling, e-commerce charges, brand promotion — and under what conditions do they apply?
• How and when are rates adjusted over the term, and what input do you have?
• What is the settlement cycle, and what documentation comes with it? Weeks run Saturday through Friday; know what you'll receive and how to reconcile it.

Deductions and chargebacks

• What can be deducted from settlement, under what circumstances, and with what notice?
• What is the process for questioning a deduction you believe is incorrect, and is there a time limit on raising it?
• Are there charges tied to service performance? If so, how are they measured, and can you see the underlying data?

Deduction terms rarely get attention at signing and are a recurring source of friction afterwards. Knowing the dispute process in advance is most of the value.

The territory

• What exactly does the Schedule A ZIP list commit you to serve? Read it as a description of drive time and density, not as an abstraction.
• Under what circumstances can the territory change, and what happens to your economics if it does?
• What service standards apply, and what are the coverage expectations on days you'd rather not run?

Your obligations and costs

• What are the vehicle requirements — specification, branding, age limits — and who bears the cost of meeting them?
• What insurance is required, at what limits, and who must be named?
• What are the driver requirements, and what screening or qualification standards apply?
• What technology, scanners, or systems are you required to use, and are there costs attached?
• Which compliance obligations sit with you — DOT, safety, employment — and what happens if a driver creates an issue?

Scale and structure

• Is there a path to acquiring additional CSAs, and are there limits on how many you can hold?
• If you operate multiple entities, how are settlements and reporting separated? Statements carry a CSA code; make sure your bookkeeping keeps entities apart from day one, because blended records are painful to unwind later.
• What restrictions apply to what else you can do with your vehicles, drivers, or business?

The question behind the questions

The answers matter individually, but together they answer one thing: what has to be true for this to be profitable, and how much room is there if it isn't?

Build the model before you sign. Take the charge structure from the Schedule C, the volumes from whatever history you have, and your own honest cost assumptions — market-rate driver pay, real fleet replacement, a salary for yourself. Then run it at ninety percent of expected volume and at eighty. If the business only works at the top of the range, you have learned something important while you can still act on it.

Getting the offer economics right

If what you're evaluating is a MESO or a renewal offer rather than a first contract, the modeling is worth doing properly. Route Impact's one-time contract analysis is $199: it recomputes the offer across every charge type using FedEx's own proposal methodology and stress-tests revenue under volume scenarios, so you can see the break-even thresholds instead of estimating them.

It does not replace your attorney, and it has nothing to say about the legal terms above. It answers the financial half — which is the half most people sign without modeling at all.