FedEx Is Getting Rid of This Delivery Service, Starting Aug. 15
A number of customers will be impacted when the company makes these cuts.
Whether you're waiting for something from your favorite online retailer or you're getting a care package from a loved one, you know the thrill of seeing a FedEx truck show up to your home. The popular shipping company has been delivering packages for decades, and now ships millions across the U.S. every single day. But as much as we've all come to rely on FedEx, the company is making a change that could leave us waiting even longer for packages. Read on to find out which delivery service FedEx is dropping later this month.
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FedEx has already made changes this year.
FedEx has been been adjusting its services since the beginning of 2022.
Back in January, the company increased shipping rates by an average of 5.9 percent. Then the very next month, FedEx suspended its domestic express freight services because of a staffing shortage amid the Omicron variant. And in April, the shipping company raised its fuel surcharges, as gas prices were hitting all-time-highs.
Now, FedEx says it's being forced to get rid of one service altogether.
FedEx is dropping this delivery service.
If you're used to receiving deliveries over the weekend, you may be disappointed by FedEx's recent decision. The shipping company will soon suspend Sunday residential delivery in some areas of the U.S., The Wall Street Journal reported. According to the newspaper, FedEx will get rid of its Ground delivery service on Sundays in certain markets starting Aug. 15.
"FedEx Ground is constantly evaluating opportunities to optimize network operations based on market conditions and customer needs," the company told eCommerce Bytes in a statement.
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Contractors have been sounding the alarm on the financial consequences of Sunday deliveries.
FedEx initially announced that it would start making Sunday deliveries a year-round service in Jan. 2020 after previously only doing seven-day deliveries during peak holiday seasons, according to The Washington Post. That same year, the shipping company expanded this service to handle the increase of residential deliveries made amid pandemic lockdowns. "To accommodate the exponential growth of e-commerce during the pandemic, we accelerated the rollout of Sunday residential delivery coverage to nearly 95 percent of the U.S. population," FedEx said in its statement to eCommerce Bytes.
But as FedEx's package volume has fallen significantly, contractors have complained that low volume on Sundays is making the seven-day service a financial burden for the company. Spencer Patton, the owner of Patton Logistics, which runs about 225 FedEx Ground delivery routes in 10 states, published a letter on July 20 urging FedEx to "reevaluate its commitment to Sunday deliveries" in order to help its struggling Contracted Service Providers (CSP).
"The rapid introduction of Sunday deliveries on a nationwide scale created significant operational, technological, and financial strains for both FedEx Ground and its CSPs," Patton wrote. "By our estimates, Sunday deliveries are costing FedEx Ground upwards of $500 million in earnings drag. That $500 million figure is getting worse, not better. Likewise, Sunday deliveries erased more than one-third of CSP's profit margins in less than one year's time. In parallel fashion, that margin erosion is worsening, not improving."
This decision is targeting smaller communities.
FedEx has declined to say which areas in the U.S. will lose Sunday deliveries, according to The Wall Street Journal. But the newspaper reported that a company memo sent to some contractors said the decision is targeted toward areas with smaller populations. "As economic conditions have shifted, we are making operational adjustments to suspend Sunday delivery operations in certain low-density, rural markets," FedEx said in a statement.
According to the shipping company, nearly 80 percent of the U.S. population will still receive deliveries on Sundays. "This will enable FedEx Ground to increase efficiencies while maintaining a competitive advantage in weekend coverage" by reaching a large portion of the population, FedEx said.
