Consultant’s Corner: A 2020 announcement previewed role FedEx Ground may play

FedEx will roll the FedEx Ground division, its low-cost, contract last-mile delivery service, into Federal Express Corp. by June 2024, and is likely to continue to conduct business as it does now — but with more visibility into FedEx operations. [caption id="attachment_76185" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] Few details were provided in the company’s announcement last week about how FedEx plans to integrate FedEx Ground other than President and Chief Executive Raj Subramaniam stating that the company has taken every consideration into account as it develops its plans. To make deliveries, FedEx plans to deploy a “hybrid model” of Ground contracted service providers and Express employees, he said. This model could see Express employees delivering time-definite packages and FedEx Ground employees delivering the rest, but with only one van per neighborhood rather than both Express and Ground vans. This model is a familiar one: Back in March 2020, FedEx contracted with FedEx Ground to transport and deliver select day-definite, residential Express shipments. FedEx Ground would deliver Express packages if they were home deliveries so the company could meet the original delivery date. “This move makes residential deliveries more efficient by putting the right package in the right network at the right cost to serve our customers,” Subramaniam said in a statement at the time. “The FedEx Express integrated air-ground network is precisely the type of business model that our labor laws are designed to protect,” he said back in 2020. “This change leverages the strengths and investments in the FedEx Ground network, making it the network of choice for residential packages fueled by e-commerce.” Visibility improvements Now, Ground and Express will likely be linked by an online interface described last week by John Smith , who will lead United States and Canada Ground operations at FedEx Express beginning April 16. The goal of the interface is to increase visibility and communication among the service providers. Data includes packages per day, stops per day, packages per stop, packages per vehicle and more. This interface will be used across the FedEx organization in real time. There are likely other connections between Ground and Express, but pay must be addressed. If both Express and Ground workers are delivering packages, should the pay be similar? Also, if customer service is uniform across the organization, how will it impact Ground workers? The lines will likely blur further once Ground is absorbed into the FedEx organization. There may be one group of workers delivering packages at a lower pay rate while another group of workers is also delivering packages but is paid more because of the package delivery characteristics, not the workers’ abilities.

Consultant’s Corner: A 2020 announcement previewed role FedEx Ground may play

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