FedEx Corp announced that it’s cutting back on Sunday deliveries in some U.S. markets starting August 15th. This suspension will primarily affect delivery in certain low-density, rural areas across the country.
The delivery giant plans to allocate the Sunday deliveries to Saturday and Monday. Therefore, if your business relies on FedEx for all the deliveries, you need to conduct a freight audit to determine how this affects your business costs.
Why Is FedEx Suspending Sunday Deliveries?
Although Sunday deliveries have become quite popular, FedEx is taking a step back. Here’s why.
Optimizing Operations
The U.S. delivery giant is switching from these Sunday deliveries to increase the efficiency of the Ground unit that handles most of the company’s e-commerce home deliveries.
This unit reaches about 80% of the U.S. population on Sundays. Therefore, FedEx is now focused on optimizing the delivery network according to customer needs and market conditions.
Like most delivery companies, FedEx is optimizing operations to deal with the rising shipping costs. Additionally, their operations are affected by global issues such as the Russian invasion of Ukraine, which forced them to suspend shipments to Ukraine and Russia.
Reduction in Ecommerce Purchases
Before the coronavirus pandemic, FedEx only made deliveries on Sundays during the peak holiday season. However, they started year-round delivery services in early 2020, when the COVID-19 pandemic started. This move was in response to the sudden rise in demand for deliveries due to lockdowns.
Currently, e-commerce and the demand for deliveries has reduced compared to the months during the height of the pandemic, which has influenced FedEx’s decision to cut back on Sunday deliveries.
In a statement, FedEx says, “We accelerated the rollout of Sunday residential delivery coverage to nearly 95% of the U.S. population. As economic conditions have shifted, we are making operational adjustments to suspend Sunday delivery operations…”
Labor Issues
This decision to suspend Sunday deliveries comes amid pressure from independent contractors who have been asking for more compensation to offset the rising costs. FedEx partners with over 6,000 independent businesses for the Ground network.
In recent months, these companies have been on a campaign to get more money from FedEx to cover vehicle maintenance, fuel, and labor costs. In addition, the companies have been asking to handle fewer packages. Sunday deliveries are usually low volume, which affects the operations of the sorting hubs, making contractors less effective.
These contractor complaints might have played a role in influencing this decision by FedEx to reduce the Sunday deliveries. This is part of the plan by the company to reduce emissions during delivery.
Other Sunday Delivery Options
Once the Sunday delivery suspension kicks off in some parts of the U.S., you have to find alternative services.
Although UPS does not handle Sunday deliveries directly, they partner with USPS to deliver economy parcels. Therefore, you can use this option if you have urgent mail that needs to be delivered on a Sunday.
The Impact of Suspended Sunday Deliveries
Since the onset of the pandemic, a lot of e-commerce businesses have increased their sales and number of deliveries.
Access to 7-day service delivery from companies like FedEx made it easy to send packages to customers all week. This boosted customer loyalty because orders could be delivered on any day.
With the announcement from FedEx, businesses that rely on year-round deliveries have to restructure their shipping schedules. This is to ensure that customers get their orders on time. In addition, they have to communicate with the customers about the new freight changes to avoid any delays.
Furthermore, every business wants to save money. Therefore, this new development means that e-commerce businesses have to re-evaluate the total freight costs and how they have been affected.
What Next?
This suspension of Sunday deliveries in some markets could potentially lead to alternative delivery methods. For instance, in 2019, FedEx announced plans to begin testing autonomous delivery bots, Roxo, in some cities. The company could adopt this technology to make same-day deliveries to customers.
It launched the first international trial of Roxo in June 2022 to optimize the delivery services.
Freight Audit
FedEx is taking a step toward protecting its business from making losses because of the changing economic conditions. The shift in the e-commerce environment has played a major role in how the courier company operates.
Additionally, rising freight costs have forced the company to look at its existing business model and make some changes. If you regularly ship products to customers, it’s time to re-evaluate your freight structure.
How can you save money on shipping costs and maximize your profits? You can find out how to do this by engaging the services of a reputable freight audit company like Betachon.
You’ll get a handle on your delivery fees, reduce money spent on small parcels and get a complete audit to determine if you are eligible for better discounts. Schedule your free demo.