FedEx Ground is suspending Sunday deliveries to residential addresses in some rural US markets starting on Monday, August 15, 2022.
In reducing its Ground unit’s operations, FedEx says it will improve efficiency and still reach nearly 80% of US households on Sundays. The company’s Ground division handles most of the company’s eCommerce home deliveries.
Unlike its Express business, FedEx Ground deliveries are handled by Contracted Service Providers (CSPs), that own the routes they are delivering on.
These CSPs can range from one route individual owners to those that operate many routes in multiple states.
On Wednesday, Spencer Patton, owner of Patton Logistics, Inc., one of the largest FedEx CSPs, issued an open letter to FedEx detailing some of the issues contractors face delivering FedEx packages as well as requesting that the company increase compensation to CSPs.
Patton, who also runs a consultancy for FedEx and Amazon contractors claims in the letter that he hears on a daily basis from delivery contractors who are “financially collapsing under the weight of these dramatic cost changes that have gone unaddressed by FedEx Ground in 2022.”
He also said in his letter that an anonymous group of more than 1,000 FedEx contractors representing over 25,000 drivers this year wrote two other letters of concern to FedEx regarding the company’s in-action about compensation.
But among the compensation concerns, there was also a call for FedEx to evaluate its Sunday delivery service which the company launched in 2020.
“The rapid introduction of Sunday deliveries on a nationwide scale created significant operational, technological, and financial strains for both FedEx Ground and its CSPs,” Patton said. “Sundays wreak havoc on FedEx Ground’s ability to forecast the next day’s volume.”
Furthermore, Patton said that the FedEx Ground operated forecasting algorithm has not been accurate for two years now, resulting in CSPs having difficulties aligning their costs to match the actual package volume.
Based on Patton’s open letter, there appear to be some significant issues that CSPs face on both sides of their business, income and expenses.
FedEx Ground Sunday Deliveries
Since the internal frustrations spilled into the public realm, FedEx appears to have chosen to quell the revolt a little by at least addressing one pain point on the expense side, Sunday deliveries.
“We accelerated the rollout of Sunday residential delivery coverage to nearly 95% of the US population. As economic conditions have shifted, we are making operational adjustments to suspend Sunday delivery operations.”FedEx Statement to Reuters
By itself, this policy change will not quell the frustrations and financial issues CSPs face, but it’s a starting point.
With the busy holiday season coming up, FedEx customers need to know if they can rely on FedEx to deliver packages. It seems the company will need to work with its CSPs to ensure that the contractor-run delivery network is solid and ready to handle the expected volume this year.
The 18-page letter by Patton makes a case that many more adjustments need to be implemented to ensure a smooth holiday season for FedEx shippers.
FedEx has not yet identified which areas will be affected by this suspension of ground deliveries. The company plans to shift Sunday deliveries to affected areas to Saturday (if possible) or Monday (more likely). FedEx Ground residential deliveries are marketed by the company as FedEx Home Delivery.
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