AVP Routes: Why the Math Looks Profitable and Isn't
AVP routes are pitched as flexibility. In practice they are a tax on the rest of your fleet that does not show up on the AVP route’s own P&L.
If a contractor learns one operational principle, it should be the one in Time and Space. If a contractor learns a second, it should be this one:
An AVP route never makes sense in isolation, because it is never actually in isolation.
The rest of this article unpacks that sentence.
What AVP actually is
AVP stands for Alternative Vehicle Program. The official FedEx Ground description is that a contractor can, under specified circumstances, use personal vehicles to handle delivery volume that exceeds the regular fleet’s capacity. The typical AVP vehicle is a passenger SUV, a minivan, or a pickup truck. The typical AVP driver is paid per route or per stop and uses their own vehicle and fuel, subject to specific program rules.
On paper, AVP solves a real problem. Peak-season volume spikes. Trucks break down. A driver calls in sick on Saturday. AVP is a release valve.
In practice, AVP becomes a strategy. A contractor who started using AVP for peak overflow finds it convenient and starts using it year-round. AVP routes appear on the daily route list. The contractor convinces himself, with cost-accounting that looks defensible at a glance, that AVP is actually pretty profitable.
It is not. Here is why.
The space deficit
A personal SUV with the back seats down and packages stacked is one of the smallest cube footprints you can put on a route. We covered the numbers in Time and Space: roughly 40 to 100 cubic feet of comfortable working cube on an AVP vehicle, against 250 to 700 on a step van.
Same driver-hour. Same time budget. Three to ten times less space.
The structural implication: one step van’s worth of packages requires three to ten AVP drivers to deliver. The total stops to be made did not change. The headcount required to make them just multiplied.
People are the most expensive variable input in this business. Multiplying the headcount required to deliver a fixed volume of stops is the same thing as multiplying your most expensive cost while holding revenue constant. There is no way to make that math work over the long run. The payroll litmus test shows up immediately.
The driver behavior gap
The space deficit is the part of the AVP problem that shows up cleanly in numbers. There is a second cost that is real and harder to quantify.
A driver in a uniform, in a clean delivery truck with FedEx decals, behaves like a professional delivery driver. They take pride in the work. They handle packages carefully. They represent the operation to the customer the way you would want it represented.
A driver in their own SUV, in their own clothes, treating the route like a gig, behaves like someone working a gig. The package handling is worse. The customer interaction is worse. The retention is worse. The scanner is treated like an obligation, not a tool.
This is not a complaint about AVP drivers as people. They are responding to the structure of the work. When the operation gives them a uniform, a vehicle, decals, and a route they own day after day, the work feels like a job and they treat it like one. When the operation hands them a one-day route in their own car, the work feels like a gig and they treat it like one.
If you have built an operation on the premise that drivers in your uniform and your trucks represent your brand to FedEx customers, AVP quietly opts out of that premise on every AVP route.
The cost-accounting illusion
This is the part of the argument that most contractors get wrong, and the part where the trap actually springs.
Look at one AVP route in isolation. Revenue from FedEx for the stops on that route. Direct cost: the AVP driver’s pay. Subtract one from the other. The number looks profitable. The contractor concludes that AVP is, in fact, a moneymaker.
It is not, and the reason is that the AVP route is never actually in isolation. Those stops did not appear out of nowhere. They were taken off another route, which means they were taken off another truck.
Specifically: the stops that ended up on the AVP route were almost certainly the densest, tightest, closest-to-station stops on the original route’s manifest. FRO tends to peel off the most efficient stops to give to a smaller, less capable vehicle, because those are the stops an AVP driver can actually handle inside a short driver-hour budget.
The original step van route now runs with the leftover stops. The dispersed stops. The far stops. The harder stops. Same driver, same eight hours, same fuel, same maintenance. But the route’s productivity collapsed because the most productive stops just left.
Now do the system-level math. The “profitable” AVP route plus the degraded step van route. The total revenue across the two trucks did not change. The total cost did change: you added an AVP driver and degraded the step van’s stops-per-hour. The sum of the two routes is almost always less profitable than the original step van route alone.
The AVP route looks profitable only because the accounting boundary was drawn around it. Move the boundary, and the illusion disappears.
This is a textbook cost-accounting trap. Profitable in the narrow view, money-losing in the system view. Most contractors who lean on AVP have never done the system-level math, because the narrow view is easier and more flattering. One operator built an entire business on exactly this error — drive the route or build the business tells that story.
The only case where AVP makes sense
There is a narrow case, and it is worth naming.
AVP makes sense when the alternative is actual failure. Missing pickups. Missing service commitments. Paying liquidated damages. Losing the contract entirely. In those situations, AVP is structurally inefficient and better than the alternative. A contractor who refuses to ever use AVP because of the cost-accounting argument will eventually fail a service commitment, and that failure is much more expensive than the AVP route they refused to run.
AVP is a coverage tool. A last-resort coverage tool. The right way to think about it is the way you think about a spare tire. You hope you do not need it. You carry it because the cost of not having it when you do need it is catastrophic. You do not drive on the spare year-round because it is convenient.
The time-and-space test
The cleanest test for whether an AVP route is actually justified is this: would you be willing to remove a step van from the road and replace it with the AVP route?
If yes, you had spare capacity in your fleet. The step van you would remove was a route that did not need to exist. The right move is not to run AVP — it is to collapse your route count so the freight fits inside time and space across fewer step vans. That move shows up as a payroll reduction without revenue loss. That is the right answer.
If no — if you cannot actually take a step van off the road, because all your step vans are loaded to time and space — then the AVP route is additive. It is multiplying your headcount without reducing your truck count. It is the cost-accounting illusion. The math does not work.
There is no third case. Either AVP replaces a step van (which means you should have run fewer step vans to begin with) or it adds headcount on top of your step vans (which means it is unprofitable in the system view). The framing the BC or the broker will use sometimes obscures this, but the underlying choice is binary.
What to do instead
The right operational posture toward AVP is:
- Keep it in the toolbox. Train and onboard enough AVP drivers to handle real coverage emergencies. Peak season, sick calls, surge volume.
- Do not put it on the schedule. AVP is not a primary route. It is a fallback.
- Measure its frequency. If you are running AVP routes more than a handful of days per year outside of peak, your fleet is sized wrong. The fix is bigger trucks or fewer routes, not more AVP.
- Watch the system math, not the route math. When you run AVP, the relevant number is not the AVP route’s margin — it is the change in margin across the AVP route and the step van whose stops it absorbed. That number is almost always negative.
The single sentence to take with you
If you remember one sentence from this article, make it this one:
An AVP route is never profitable in isolation, because it is never actually in isolation. The stops it delivered came off a truck whose margin just got quietly destroyed.
Run AVP when failing is the only alternative. Otherwise, fix the fleet.