FedEx has been delivering packages since 1973, setting a new pace for the express shipping industry. We all recognize the familiar purple and orange FedEx logo, and the brand has become a household name that reaches an average daily volume of 18 million packages. During the COVID-19 pandemic, delivery services saw an increase in demand, as the online marketplace boomed during quarantine. But now with rising inflation, many companies—including FedEx—have sought opportunities to improve their business model while also lowering overhead costs. Read on to learn about FedEx's latest change, and what you can expect to see as a result of a new business partnership.
READ THIS NEXT: UPS and FedEx Are Sending This New Warning to Customers.
This is not the first change FedEx has made this year.
In March, FedEx announced that it would be increasing its fuel surcharge for all three of its services—Express, Ground, and Freight—due to rising gas prices. And as of April, FedEx no longer allows customers to track their packages through the Deliveries app, which gave users the ability to follow all of their arriving packages from different carriers in one convenient place. Junecloud, the company behind Deliveries, informed users that they would not be able to track these packages on the app and would need to use FedEx's own tracking page. But while Deliveries may have lost FedEx access, a new company just struck a deal with the shipping company.
FedEx has partnered with an online bulk retailer.
If you're a FedEx customer, you may notice an increase in packages delivered on the weekend. On May 12, 2022, Boxed, an e-commerce grocery platform, announced that it had reached an agreement with FedEx, which will now deliver most of its customer shipments.
Boxed allows customers to purchase bulk pantry items that would otherwise be bought at wholesale clubs like Costco or Sam's Club, which require a membership. According to the retailer's website, when buying groceries, office supplies, paper towels, or toilet paper through Boxed, you don't need a membership, and you can get free shipping on orders over $49. Sweetening the deal, Boxed customers will now be able to reap the benefits of FedEx's seven-day-a-week deliveries.
"In this challenging supply chain environment, e-commerce companies are seeking new avenues to counter escalating costs, and provide the best possible service to their customers," Chieh Huang, Boxed CEO, said in the press release. "This enhanced alliance with FedEx provides us with the opportunity to address both."
This is part of a larger FedEx initiative.
In addition to helping FedEx increase weekend package volume, the agreement helps to boost the company's e-commerce base, Supply Chain Dive reported. These are two primary initiatives for FedEx, which will also help to diversify its customer base.
"We made a specific decision to invest in capacity and double-down on e-commerce three years ago," Raj Subramaniam, president and chief operating officer of FedEx, said in March (via Supply Chain Dive). "We saw we were skating to where the puck was going to be and seeing where the market was going."
While working to improve its online presence, FedEx is bolstered by its ability to deliver packages every day of the week, namely Sunday, which competitors like UPS do not offer.
There are some challenges that come with the new partnership.
Bulk items are larger—think toilet paper and paper towels packages—which presents certain delivery difficulties. Supply Chain Dive pointed out that parcel carriers like FedEx have been investigating new approaches for transporting these items, especially as more people are interested in having them delivered. Currently, Boxed is unable to deliver to P.O. boxes, as their bulk boxes are "too big to qualify," according to the company's website.
Plans for streamlining the shipment of larger, bulky items were not announced, nor was the date for when customers will start to see Boxed shipments come through FedEx.
READ THIS NEXT: UPS and FedEx Are Banning These Deliveries.