With the holiday shopping season fast approaching, FedEx (NYSE: FDX) has announced it is expanding its US operations to six days per week year round.
In the past, FedEx only ran six or seven-day ground operations during the busy holiday shopping season. It should not come as a surprise this change comes shortly after Amazon announced the purchase of twenty thousand delivery vans along with a program to help local small businesses start a delivery service.
For small business owners who rely on FedEx, the added day will mean making the items they sell available on a Saturday instead of Monday. This can translate into more purchases, long-term customer retention, and better customer service.
FedEx said the expanded services was in response to growing demand of eCommerce, not only during the holiday season but year round.
In the press release, Raj Subramaniam, executive vice president, chief marketing and communications officer, FedEx Corp., explained how the company has been anticipating this growth. This includes investments in new facilities and technologies such as automation.
Subramaniam said, “FedEx anticipated early on that the growth of e-commerce would significantly increase demand throughout our network, and we underwent a transformation by opening new facilities and investing in highly-advanced technology and innovations that have resulted in the most automated network in the industry, delivering the speed and reliability our customers value highly.”
FedEx by the Numbers
Because of e-commerce, the way consumers purchase products has changed dramatically. In the case of FedEx, the company now sees more than 14 million shipments on an average day.
This has forced delivery companies to make a huge investment in their infrastructure, vehicles (both ground and air), and their workforce.
FedEx has a workforce of 425,000 people and for the holiday season, it will hire approximately 55,000 more people.
In order to handle this growth, FedEx has been investing across the board. FedEx Ground has opened 15 new hubs with advanced material-handling systems. In the past five years, it has added close to 36 million square feet to its network along with nine new hubs with 58 automated stations.
Additional investments include robotics and real-time route planning, sortation and delivery technology.
Today’s small businesses need more than one delivery option. While the news from FedEx is more than welcomed, business owners have to use local, national, and international companies to ensure their packages get delivered to their customers.
Depending on how fast the customer wants the item they purchased, as a business you have to provide delivery options seven days a week, day or night. Having these options in place means you will not have to turn a customer down.
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Crazy how competitive the shipping industry has gotten.