This is a stunning announcement by FedEx on many levels;
1. Having their lower cost delivery company, FedEx Ground, deliver on Sunday makes sense. However, it doesn’t explain why FedEx Express has started to hire on-demand, hourly drivers, which must be an effort to reduce cost and drive profitability at the Express delivery company
2. There is no question that FedEx is all-in on driving profitability based on improved volume/scale and maybe, just maybe, more competitive customer pricing for that pricey home delivery.
3. Pulling the plug on most USPS support for last-mile delivery of their lowest-cost ground service, Smart-Post, represents a huge reorganization and change in strategy that supports putting as many packages on a truck as possible to drive reduced cost via scale…which would be the UPS model.
4. Walking away from using the USPS for last mile delivery of their lowest cost ground service, Smart-Post, could very well put their express airlift agreement for the USPS at risk which pays FedEx over 2 billion dollars per year.
FedEx is reorganizing and changing to support improved profitability, which is a necessary thing as a publicly traded enterprise. The challenge will be to maintain a high level of service during and after the transition.
#ups #fedex #amazon
Administrative Professional
Yes, fulfill a need and it usually ends up profitable.? Glad FedEx is doing this.? I know I will be looking forward to Sunday deliveries.? It never made sense to me to skip a day...