Will delivering online orders seven days a week further transform retail ops?
FedEx will soon start delivering packages through its ground service seven days a week to more fully support booming e-commerce growth.
Last September, FedEx expanded delivery to six days a week for most of the year, although it had previously run on some Saturdays and Sundays around Christmas. Beginning in January 2020, FedEx will add year-round Sunday delivery for the “majority” of the U.S. population.
In a statement, Raj Subramaniam, president and COO, said FedEx expects that average daily volume for small parcels in the U.S. will double by 2026. The significant investments in capacity, technology and automation the company has made at FedEx Ground over the past 20 years will support the Sunday move.
“Expanding our operations to include Sunday residential deliveries further increases our ability to meet the demands of e-commerce shippers and online shoppers,” said Mr. Subramaniam.
The move will make FedEx the first major U.S. carrier to offer seven-day-a-week ground residential delivery to any shipper. UPS is exploring Sunday delivery after expanding in 2018 to offer regular Saturday delivery in many major metro areas.
Kevin Sterling, an analyst at Seaport Global, said the move helps FedEx customers “get on a more level playing field for shipping” with Amazon.com, which delivers on Sundays through USPS. Mr. Sterling told the Memphis Commercial Appeal, “If you do same- or next-day delivery, you almost have to have the Sunday option.”
FedEx is also taking back nearly two million daily deliveries to homes that are currently handled by the USPS in a move designed to drive efficiencies and offset higher fees from USPS. Since 2016, FedEx drivers have handled more of these deliveries for packages going to the same or nearby address, but the “vast majority” will be handled by FedEx by the end of next year.
Mr. Subramaniam said, “We anticipate substantial density improvement and efficiency opportunities when all residential packages are sorted and delivered within the same ground network.”
Other e-commerce initiatives by FedEx include FedEx Extra Hours, FedEx’s next-day prescription delivery service and the FedEx SameDay Bot test of delivery robots from local stores.
- FedEx Ground Announces Seven-Day Residential Delivery Year-round – FedEx
- FedEx Ground expands Sunday delivery – CNN
- FedEx aims to boost service, profit more from online shopping – Reuters
- FedEx will start delivering on Sundays to meet online shopping demand – The Associated Press/Chicago Tribune
- FedEx Ground to deliver 7 days a week all year beginning in 2020 – Memphis Commercial Appeal
DISCUSSION QUESTIONS: Will seven-day residential delivery significantly raise the bar on same-day, next-day or other delivery expectations? What challenges will expanded delivery place on store operations and logistics?