FedEx Ground increases delivery schedule to six days a week

Earlier today, global transportation and logistics bellwether FedEx said that it is upping its FedEx Ground U.S. operations to six days a week from five.

Company officials said that this move was made in response to a combination of –increasing e-commerce demand and record influx of volume expected this holiday season, and beyond.

“FedEx anticipated early on that the growth of e-commerce would significantly increase demand throughout our network, and we underwent a transformation by opening new facilities and investing in highly-advanced technology and innovations that have resulted in the most automated network in the industry, delivering the speed and reliability our customers value highly,” said Raj Subramaniam, executive vice president, chief marketing and communications officer, FedEx Corp., in a statement. “These significant facility and automation investments have been taking place for many years, but are now largely complete. This expanded capacity and increased efficiency will create margin and profitability benefits at the same time that FedEx Ground capital investment will be decreasing.”

The FedEx executive also stated that the rise in demand for e-commerce goes beyond peak, observing it is a “year-round phenomenon” and prepared to meet that demand.

FedEx described the gains the company has seen for demand and volume as dramatic and consistent for more than a decade. As an example, it noted that the record day for the company in 2009 was 12 million shipments, whereas now it routinely handles more than 14 million shipments on a typical day.

What’s more, it explained that 2018 is projected to be a record volume year for the FedEx network, adding it plans to increase hours for some existing staffers and hire roughly 55,000 positions for the holiday season.  It also noted that FedEx Ground again plans to run six- and seven-day operations through the holiday season and also continue six-day operations throughout its U.S. network on a year-round basis.

Going back to 2005, FedEx has been actively involved in its network expansion initiative geared towards increasing daily package volume capacity, as well as to augment the its network speed and service capabilities. Examples of this include the opening of 15 new hubs comprised of advanced materials handling systems, as well as the addition of around 36 million square feet to its network, which includes the opening of nine new hubs and 58 automated stations. Investments in as automation, robotics and real-time route planning, sortation and delivery technology have all served as drivers of the expansion of the global FedEx network, it said.

“FedEx really has no choice to go to six days, because the Internet allows e-commerce activity on a 24x7 basis, which means orders pile up to be delivered on Tuesday in the FedEx Home Delivery world (they had traditionally delivered HD Tuesday to Saturday),” said Jerry Hempstead, president of Hempstead Consulting.  

He added that the move to delivery six days a week could serve as a prelude to a rate increase, noting that the FedEx could point to this 20% increase in its service to justify the higher increase.