FedEx is tweaking its operations by having its FedEx Ground division take over some deliveries from the Express side.
Beginning in March, FedEx Express will contract with FedEx Ground for the transport and delivery of select day-definite, residential Express shipments.
This change means FedEx will select Express shipments to residential addresses such as regular 2-Day (non-AM) and Express Saver (3-day service) that only have day-definite commitments vs. specific time of day commitments.
The carrier plans to roll out this alternate Express delivery service first in Greensboro, N.C. and will include other markets in phases throughout the remainder of the year.
“This move makes residential deliveries more efficient by putting the right package in the right network at the right cost to serve our customers. We continue to flex our network to stay ahead of e-commerce growth, and that includes adjustments to better handle the demand for residential deliveries while lowering our cost to serve.”
Raj Subramaniam, president and chief operating officer, FedEx Corp
Sustainability and Cost Savings
By optimizing last-mile residential deliveries, FedEx believes this will help improve safety and sustainability by reducing the number of delivery vehicles in neighborhoods.
FedEx Express deliveries are usually delivered by company-owned vehicles operated by FedEx employees, while independent owner-operators typically handle FedEx Ground deliveries.
This move may also reduce the cost of delivering less important Express shipments and free up the Express network for higher-margin time-sensitive deliveries.
What do you think about FedEx moving some Express shipments to its ground operators?
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