One of the ways FedEx Ground stands out among the crowd is its ability to receive and deliver large or incompatible packages. Think about all of the incredibly large items we can buy and sell online today that need some way to get from Point A to Point B: playground equipment, dining room tables, sets of tires, and more.
One of the many ways FedEx Ground ISP contracts ensure sustainable operations is by subsidizing fuel costs. Further, these subsidies correlate with the price of diesel fuel in an operation’s market.
Last week FedEx Ground announced 7-Day Residential Delivery for the entire year (not just during peak season). Along with that game-changing notice, FedEx Ground also revealed more about their plans to integrate SmartPost into Ground volume. Finally, the company also announced transformations in their large package or “incompatible package” capabilities.
Amazon has its own last mile delivery trucks now. Amazon is starting its own delivery business. Amazon has a new fleet of planes. Amazon is investing in drones. Amazon is building a logistics hub in Kentucky. Amazon is a major threat to FedEx and USPS. Amazon is building the Death Star. Amazon hates Ewoks.
Every week we see some version of this story.
Currently, USPS completes the last mile delivery of these SmartPost packages. However, USPS and FedEx Ground are modifying the agreement so that FedEx Ground will roll out SmartPost last mile delivery across the United States. Most FedEx Ground territories are going to see a significant volume increase—we predict a jump of 25-100% in most markets!
Drones are sexy. We get it. The idea of drone delivery feels like the future. As fun to think about as drone delivery is, it’s not a realistic mode of transportation for the type of packages FedEx Ground delivers
Terminating a contract can provide serious service interruptions for FedEx Ground customers and is a critical issue. FedEx Ground aims to provide seamless delivery service for all areas of operation.
This being said, it is rare for a contractor to lose their FedEx Ground contract. Further, contractors almost always receive opportunities to resolve issues in advance of a contract termination
Amazon Logistics is the hot story in logistics news this past year. However, most of the news isn’t actually informative for investors. How much does it cost to buy Amazon routes? Are they good investments? What’s it like to own/operate Amazon routes?
In September 2018, FedEx Ground announced its US operations would convert to a 6-days-per-week schedule following the holiday season.
That change is upon us now!
A couple new things to note as you work through the transition with your own FedEx Ground team.
In past years, FedEx contractors might have owned home delivery routes, grounds routes, or both. As part of the FedEx transition to ISPs, FedEx requires a single contractor to operate both home delivery routes and ground routes within a given area by Summer 2020.
In September, FedEx Ground announced its US operations will expand to a 6-days-per-week plan to accommodate the booming e-commerce market. The change will take effect after the 2018 holiday season.
While we will monitor the Amazon route opportunities closely, we currently see no reason to consider them a threat to FedEx routes. Moreover, we still strongly believe FedEx routes are a better business opportunity for most investors.
Drones have been flying through the news for years: they’re going to be the fastest, most efficient way to deliver packages according to their endorsers.
But is that really the case? And what does that mean for you as a FedEx contractor?
Amazon is a giant in the online retail space. It seems as if every other retail news story is about some new Amazon innovation. So, is Amazon’s growth a threat to your FedEx business?