FedEx mixes Express and Ground services to cut down on duplicate routes

FedEx is transferring some of its Express parcels to its Ground network for last-mile deliveries, so it can use fewer trucks in areas with a high density of parcel deliveries.

FedEx Ground will make selected day-definite residential deliveries, initially only in Greensboro, North Carolina.

It’s part of FedEx’s strategy to tackle the thorny issue of growing business-to-consumer (B2C) demand and ballooning residential delivery costs as a result of e-commerce.

“This move makes residential deliveries more efficient by putting the right package in the right network at the right cost to serve our customers,” said Raj Subramaniam, president and COO of FedEx.

“We continue to flex our network to stay ahead of e-commerce growth, and that includes adjustments to better handle the demand for residential deliveries while lowering our cost to serve.”

Express will continue to focus on business-to-business (B2B) deliveries and B2C deliveries of a time-sensitive nature, leaving for Ground to fulfil the less urgent B2C deliveries.

However, they will remain separate entities.

Source: FedEx, Supply Chain Dive

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