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FedEx to Deliver 7 Days a Week to Satisfy Online Shoppers

FedEx to Deliver 7 Days a Week to Satisfy Online Shoppers
FedEx to Deliver 7 Days a Week to Satisfy Online Shoppers
May 31, 2019   //   

FedEx plans to deliver packages seven days a week starting next January as it tries to keep up with the continuing boom in online shopping.

The company is also taking back nearly 2 million daily deliveries to homes that are currently handled by the post office in a move it says will increase the efficiency of its own network.

The Memphis, Tennessee-based company announced the changes Thursday.

It was just last September that FedEx expanded to six days a week for most of the year, although it had previously run on some Saturdays and Sundays around Christmas. Company officials said FedEx will add year-round Sunday service in urban and suburban areas that account for the bulk of U.S. population.

President and Chief Operating Officer Raj Subramaniam said the change will increase the company’s ability to meet the demands of online shoppers and retailers.

“Consumers want packages over the weekend,” Subramaniam said in an interview. “As soon as we went to 6-day, we started hearing about 7-day.”

With the growth in online shopping, FedEx expects shipments of small parcels in the U.S. to double by 2026. That could strain delivery networks.

Barbara Ivanov, director of an urban-freight lab at the University of Washington, said delivery companies won’t be able to add enough trucks during peak hours in congested cities, “it’s impossible to fit them in.” FedEx, she said, “is leveling the flow by adding a day to their delivery schedule.”

Rival United Parcel Service has Saturday service in more than 120 metro areas, but limits Sunday deliveries to things including urgent medical items. The post office makes some Sunday deliveries too, including priority mail.

Meanwhile, FedEx will stop using the post office for dropping off SmartPost packages at customer’s houses. SmartPost is a longtime deal between FedEx and the post office, where FedEx ships packages most of the way, but the post office delivers it to your door.

FedEx said that since 2016 it has already taken back about 20% of SmartPost parcels when technology helped the company spot instances in which a FedEx driver was scheduled to take another package to the same address or one nearby.

The company plans to step up the shift away from the U.S. Postal Service this fall and handle the “vast majority” of SmartPost deliveries itself by the end of next year.

Subramaniam said that making enough deliveries within a specific area “has consistently been a challenge with e-commerce.” He said the company now sees a chance for a “substantial” increase in efficiency by keeping the entire process of sorting and delivering all residential parcels within its own ground network.

UPS also takes back packages from the post office when it can bundle them with its own deliveries. Spokesman Glenn Zaccara said advances in automation and analytics will let UPS handle more of those deliveries in the future.

The Postal Service declined to disclose how much revenue it earns from SmartPost. It has said in financial statements that growth in its packages business is slowing partly because big shippers have shifted volume away. Inc., which is increasing its own delivery service, did not immediately respond to requests for comment.