Fedex Smartpost seeing delays
Problems because of COVID-19 volume spike, Postal Service changes.
Customers and delivery experts have flagged more frequent delays with Fedex Smartpost, the shipping service that involves the U.S. Postal Service and is undergoing a significant overhaul.
Some with recent Smartpost shipments have griped on social media about packages bouncing around locations past their expected delivery date, “stuck in Fedex limbo” and not yet handed off to the Postal Service. A Smartpost customer shared package tracking information with The Commercial Appeal showing it traveled through facilities in five cities in eight days, despite the package’s origin being 40 minutes away from the customer’s home.
Through Smartpost, Fedex delivers shipments to a Postal Service location for final delivery by the postal carrier. In a statement, Fedex said the recent surge in packages amid the COVID-19 pandemic “has resulted in temporary service delays for some packages within our network, including some Smartpost volume.”
“Contingency plans designed to decrease backlog and restore service levels have been implemented, including securing additional package handlers and service provider delivery resources and, if necessary, flexing our network to reroute certain packages to nearby Fedex Ground stations for assistance,” the company said.
Fedex Smartpost’s on-time delivery rate dropped 3 percentage points the first eight months of 2020 compared to the same period last year, according to data from Lateshipment.com, a company that claims delivery refunds and provides analytics for retailers and shippers. CEO Sri Sridhar said that dip in performance is “pretty significant.”
Surepost, a similar shipping service provided by Fedex rival UPS, has performed “marginally better” this year, he said. Lateshipment.com considers anything delivered beyond eight days a delay for Fedex Smartpost and UPS Surepost.
“Even with that (timeframe), we do see these service types actually doing far worse than any of the other standard shipping times,” Sridhar said, adding that the delays usually originate after Fedex and UPS hand off their packages to the Postal Service.
Postal Service addressing service decline
Robert Stanton, owner of auto repair shop Burchfield’s Garage in Tunica, Mississippi, has used Fedex Smartpost often the past several years. He said he’s never encountered any shipping problems until 2020, with the issues centering around Postal Service delays.
News outlets, citing internal memos, detailed major operational shakeups at the financially ailing agency in July under new Postmaster General Louis Dejoy. In Memphis, the Postal Service’s processing and distribution plants have seen undelivered mail pile up for weeks, the president of the local American Postal Workers Union branch said.
According to the Postal Service, the two changes Dejoy has implemented are requiring trucks to run on-time and on-schedule and realigning the agency’s reporting structure. Dejoy paused changes underway earlier this month, amid concerns over how the reform could slow mail-in ballots for the November election.
A spokesman said the agency has had “a temporary service decline which we are addressing.” Dejoy told members of Congress on Aug. 24 that service “improved across all major mail and package categories” the week before.
Faster shipments make Stanton’s life easier. He orders parts online to fulfill the wide range of needs his clientele have, and he also relies on the Postal Service for billing customers and receiving payments.
“Folks around here use me as the goto man if they need something,” he said.
In July, the Postal Service said a Fedex Smartpost shipment destined for Stanton couldn’t be found after arriving in Memphis, according to Stanton. The Postal Service then delivered his package later that evening, two weeks after he ordered it.
In another Postal Service saga detailed by Stanton, a customer mailed him a check postmarked March 3. He received it April 6. The customer lived “not one mile from my business,” he said.
“To me, that’s not cost-effective,” he said.
Carriers like the Postal Service keep an eye on which facilities are over capacity already, and they can divert volume to other facilities not at capacity so those packages can get on a delivery truck quicker, said Chase Flashman, CEO of supply chain data analytics company Shipsights.
“You can keep things moving rather than continuing to back up a facility,” Flashman said.
Volume spike challenges Fedex service
The Postal Service isn’t the only carrier that has grappled with service issues of late. Fedex is encountering home delivery volumes similar to what it sees during the peak season, as more people shop online amid the COVID-19 pandemic.
Shipping data firm Shipmatrix found ground delivery services for both Fedex and UPS delivered a lower rate of packages on time in May. Fedex Ground delivered 91.4% of packages on time that month, down from 94.6% the year before, according to Shipmatrix.
In June, Fedex implemented a temporary surcharge of $0.40 per package for Smartpost deliveries, which the company said will allow it to provide “the best possible service during this time.”
“As the impact of the virus continues to generate a surge in residential deliveries and has also generated a surge in oversize, hard-to-handle packages, we have experienced increased operating costs across our network,” the company said in a notice on its website.
Fedex has suspended its moneyback guarantee for all Express, Ground, Freight and Office services until further notice.
Back in March, the company cited the COVID-19 pandemic causing work and travel restrictions as the reason for the suspension.
“Since they’ve suspended the guaranteed refund on service failures such as a late shipment, there’s not that incentive any longer for Fedex or UPS to hit that commitment time,” Flashman said.
As a service, Smartpost provides a low-end cost in exchange for slower shipping speeds. But some Smartpost customers are moving to different services amid the COVID-19 pandemic, according to Flashman.
Customers struggling during the economic downturn are moving to Postal Service options with lower rates, while customers wanting to avoid long delays are shifting to the pricier Fedex Ground, he said.
“What we’re seeing more often than not are people upgrading to Fedex Ground, but they’re still not meeting the (delivery) timelines,” Flashman said. “It’s just a little bit better.”
Fedex moving Smartpost volume in-house
Fedex Smartpost, a service involving two carriers encountering newfound challenges, will look much different in 2021.
Fedex Ground is delivering more shipments that were once destined for Smartpost. In 2019, Fedex announced it would insource roughly 2 million of these packages daily. Smartpost volume integration is on track to finish in the fall, Fedex said in its statement.
Executives have described the decision as an economic one, helping Fedex increase its delivery efficiency as it delivers to more residences on its own. Fedex has repurposed its former Smartpost facilities for small or large package sortation at Fedex Ground, COO Raj Subramaniam said in June.
In March, Chief Marketing Officer Brie Carere said in an earnings call that Fedex Smartpost will continue to live on. She noted the distinction between Fedex Home Delivery’s money-back guarantee and Smartpost’s lack of one, with customers paying more if they want “that peace of mind” on their shipment.
“We continue to believe that we need two distinct products,” Carere said. “We will have our Home Delivery product as well as what is currently the Smartpost product. It will be rebranded in the future. We will give sub-pound volume to the Post Office as that makes sense.”
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.