More home delivery business
that we are adding more people and cutting routes down just to get volume delivered,” he said.
Amid the pandemic, Fedex says it has suspended most signature requirements for U.S. deliveries and put in place no-contact pickups and deliveries for driver and customer safety. Contractors said their drivers are also getting their temperatures checked and wearing personal protective equipment.
Is volume spike the new normal?
Contractors are expecting much of the newfound volume to stay. Washington said new online shoppers will soon realize home deliveries are more convenient.
Fedex expects online orders will continue rising as well. In 2019, the Memphis logistics giant projected U.S. ecommerce volume will balloon from 50 million daily packages to 100 million by 2026.
“From what we were told, this is where we are supposed to be in five years,” Levine said of current delivery activity.
The volume spike may have come too quickly for some. Transportation spend consultancy Spend Management Experts said earlier this month that “Fedex
Fedex, historically driven by business-to-business volume, has focused more on its business-to-consumer activity in recent years. Fedex Ground rolled out Sunday home delivery and has upgraded its sorting capabilities for large packages delivered to homes.
Smith told the Washington Post that “leaning into” home deliveries has paid off for the company.
While home delivery demand is rising quick, it’s not as profitable of a space as shipping in bulk to businesses is. Fedex Ground saw a growth in revenue and home delivery shipments last quarter, but its operating income fell from $586 million the year-before quarter to $355 million.
Company executives have said in earnings calls that Fedex Ground’s profit margins will bounce back as it realizes the benefits of seven-day delivery and other investments.
Extra delivery stops have provided B&B Delivery Service with more revenue, Washington said, but the contractor is also having to spend more on new drivers and extra trucks. He expects that to be B&B’S new normal.
“I guess that’s business,” he said. “To grow some, you have to spend some.”
Max Garland covers Fedex, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @Maxgarlandtypes.