FedEx plans to expand the company’s Ground unit to seven-day deliveries year-round by January 2020. It previously offered seven-day deliveries during the holidays. The move follows a September 2018 announcement beginning six-day service year-round.
“Expanding our operations to include Sunday residential deliveries further increases our ability to meet the demands of ecommerce shippers and online shoppers,” says Raj Subramaniam, FedEx president and chief operating officer.
FedEx needed to offer retailers the ability to delivery seven days a week to stay relevant, says Charles Dimov, vice president of marketing at inventory management vendor OrderDynamics.
“The retail industry is fighting it out to achieve the optimal speed of delivery, in line with consumer shopping habits today,” he says. “When the commitments are now on one-day delivery, FedEx could have been on the cusp of just being ignored, not having delivery options for Sundays. But when the every-day-of-the-week delivery rolls out in 2020, FedEx will be part of this last-mile tug-of-war, and a viable option to get products to customers faster, if a shopper doesn’t opt for [buy online pick up in store] or click and collect instead.”
FedEx also plans to reduce its reliance on the U.S. Postal Service, which it works with in its SmartPost service that uses FedEx’s network for the initial leg of a parcel’s delivery and then hands off to the Postal Service for the final mile. FedEx plans to increase its use of technology that identifies when multiple packages are destined to the same or nearby address so that it can decide to handle the last mile on its own to cut costs. The technology has helped FedEx divert approximately 20% of FedEx SmartPost packages to date, the company says.
Starting this fall, FedEx plans to “significantly accelerate” its use of the technology and expects the “vast majority” of FedEx SmartPost package volume to be integrated into FedEx Ground operations for final delivery by the end of next year.
“Delivery density has consistently been a challenge with ecommerce,” Subramaniam says. “We anticipate substantial density improvement and efficiency opportunities when all residential packages are sorted and delivered within the same ground network.”
FedEx is a shipping carrier for 201 retailers in the Internet Retailer 2019 Top 1000. It’s second to UPS Inc., which is used by 274 merchants.
Bloomberg contributed to this report