OPERATIONS

Report: FedEx shakes up express delivery

BY Dan Berthiaume

FedEx is reportedly making two significant changes to its Express U.S. ground delivery service.

According to Reuters, FedEx plans to hire 700 part-time Express drivers in 160 rural and residential markets. The drivers will focus on delivering small packages “the last mile” to residential customers. The part-time employees will receive no benefits, work no more than four shifts per week, and be paid $17.10 to $19.66 per hour depending on market – below the average hourly wages of full-time drivers, estimated at about $24 per hour.

A FedEx spokesperson said the new part-time drivers will better enable the company to handle fluctuations in parcel volume. The move may be in response to Amazon’s similar on-demand “Flex” last-mile delivery program.

In addition, SeekingAlpha reports FedEx has decided not to renew its domestic FedEx Express delivery contract with Amazon in a “strategic decision.” This will not affect any other deals FedEx has in place with the e-tail giant.

FedEx has recently been responding to increasing delivery pressure from Amazon with new capabilities and services. Beginning in January 2020, FedEx will offer ground delivery seven days per week for the majority of the U.S. population. In addition, nearly 2 million FedEx SmartPost packages that were previously given to the U.S. Postal Service for delivery to homes every day will be increasingly integrated into FedEx ground operations, which may be a catalyst for its decision to hire more part-time drivers.

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