Less than a year after it started to make regular residential deliveries on Saturdays, FedEx yesterday said it will expand into Sundays in 2020 “to meet the demands of e-commerce shippers and online shoppers.” It will also “enhance last-mile efficiency” by yanking back the deliveries your postal carrier has been making starting this fall.
“Fedex already delivers seven days a week during the holiday season. It’s now expanding the practice year-round for most of the U.S., it said. ‘FedEx Ground will deliver to residences every day of the week beginning in January 2020, because shoppers don’t run on business days -- they run every day,’ the company said on Twitter,” reports CBS News' Irina Ivanova.
“The service expansion is the latest in a line of FedEx announcements citing e-commerce as the reason for a new company offering. The FedEx SameDay Bot, which will begin tests in Memphis later this year, FedEx Extra Hours and FedEx’s next-day prescription delivery service with Walgreens are among those recently revealed services,” writes Max Garland for the Memphis Commercial Appeal.
“FedEx also plans to handle nearly two million SmartPost packages that were previously given to the U.S. Postal Service for residential delivery. SmartPost is a service where FedEx drops off packages to a post office for final delivery,” Stephanie Ritenbaugh writes for the Pittsburgh Post-Gazette.
“‘It’s well known in the package delivery industry that the economic challenge is density. It’s expensive to deliver one package to a resident at a time,’ said Patrick Fitzgerald, FedEx Ground SVP of marketing and communications. While the economics had favored the Postal Service for some time, FedEx has been able to build more efficiency to begin to take on that delivery volume, he said,” Ritenbaugh continues.
“We have made significant investments in capacity, technology and automation at FedEx Ground over the past 20 years. These investments have allowed us to gain ground market share for 19 of the last 20 years, and we are now ideally positioned to extend that growth as the average daily volume for small parcels in the U.S. is expected to double by 2026,” Raj Subramaniam, FedEx president and COO, says in the statement announcing the moves.
Barbara Ivanov, director of an urban-freight lab at the University of Washington, tells the AP’s David Koenig that delivery companies won’t be able to add enough trucks during peak hours in congested cities because “it’s impossible to fit them in.” FedEx, she said, “is leveling the flow by adding a day to their delivery schedule.”
Indeed, “with people ordering everything from saunas to sandwiches online and expecting to have them quickly appear at the door, retailers and carriers are racing to adapt to service the so-called last mile. McDonald’s Corp. is working with Uber Technologies Inc. drivers to bring Big Macs to a city park. Kroger Co. is testing an unmanned vehicle to ferry groceries in some markets. Drizly, a delivery startup, promises to deliver beer or wine in under an hour,” points out Paul Ziobro for the Wall Street Journal.
“And Amazon.com Inc., whose endless virtual aisles and sprawl of warehouses has upped the ante, is promising one-day delivery on many items later this year. At the same time, the web giant is looking to recruit hundreds of local-delivery firms to bring items from its hubs to homes,” Ziobro adds.
“We said back at the time of six day, when we would get questions about seven day, that when the market demand calls for it and the conditions are there, we can leverage these investments that we made, and now is definitely the time,” FedEx's Fitzgerald tells the Daily Memphian’s Wayne Risher.
“Trip Miller, managing partner at Gullane Capital Partners in Memphis, said FedEx needed to beef up service to keep pace with consumer demand for one-day and same-day delivery options,” Risher continues.
“Simply, to stay competitive FedEx must continue to expand and expedite their delivery options to meet ever-expanding customer demands. We also think that Amazon delivery is expanding faster and gaining more market penetration than FedEx and UPS expected at this point,” Miller tells Risher.
A spokesperson for United Parcel Service tells Fox News’ Elizabeth Zwirz that the company currently makes “pick-ups and deliveries for businesses and consumers six days a week,” in addition to “selected, urgent healthcare and other special deliveries on Sundays.”
“UPS is constantly assessing when it makes sense to expand current capabilities and operations,” says Matthew O’Connor, senior manager of public relations at UPS. “At this time we have nothing new to announce.”
We expect it will be expediting its assessment considering the direction FedEx is heading.