FedEx Ground

Last updated

FedEx Ground
FormerlyRoadway Package System (RPS; 1985–2000)
Company type Subsidiary
Industry Transportation
Founded1985;39 years ago (1985)
Founder Roadway Services Inc.
Headquarters
Moon Township, Pennsylvania
,
United States
Area served
  • United States
  • Canada
Key people
John A. Smith (president and CEO)
Services Package delivery
Parent
Subsidiaries FedEx Ground Economy
Website Official website OOjs UI icon edit-ltr-progressive.svg

FedEx Ground, a subsidiary of the FedEx Corporation, is an American ground package delivery company headquartered in Moon Township, Pennsylvania, a suburb of Pittsburgh. The company began as Roadway Package System (RPS), founded in 1985 by transportation company Roadway Services Inc., later renamed Caliber System. FedEx bought Caliber in 1998 to complement its existing FedEx Express business and rebranded Caliber's RPS package delivery service FedEx Ground in 2000.

Contents

FedEx Ground provides US and Canada domestic services as well as international services between the two, branded FedEx International Ground. Its services are cheaper than the time-definite services offered by FedEx Express and its drivers are primarily owner/operators, independent contractors who control individual delivery routes and territories. In addition to its core commercial package services, the company's services include FedEx Home Delivery, a US residential delivery service, and FedEx Ground Economy (formerly FedEx SmartPost), a low-cost parcel consolidation service.

FedEx Ground facility in La Crosse, Wisconsin FedEx Ground La Crosse-2.jpg
FedEx Ground facility in La Crosse, Wisconsin

History

The RPS logo used until it was rebranded FedEx Ground RPS Logo.jpg
The RPS logo used until it was rebranded FedEx Ground

When RPS was founded on March 11, 1985, it intended to out-compete UPS Ground by focusing on efficiency and structuring itself for lower costs. [1] One result of this drive for efficiency was RPS' use of barcodes on packages allowing it to track and sort shipments much more effectively. After an intensive effort to shift its operations to use the new technology, RPS became the first company able to track a package through the delivery cycle. [2]

Its parent company, RSI, already owned a number of transportation companies including national less than truckload (LTL) carrier Roadway Express. This backing allowed RPS to grow quickly and by 1988 it was operating 130 terminals covering 70% of the US. [3] After RSI spun off Roadway Express in 1995 and changed its name to Caliber System, RPS was its largest subsidiary. [4]

In 1997, Fred Smith, founder of FedEx, contacted Dan Sullivan, co-founder of RPS and now president of Caliber System, about merging the two companies. FedEx, which at the time only offered air services, was under pressure from UPS which offered both air and ground services. By acquiring RPS, FedEx would get a fully fledged ground network to complement its existing air services. The acquisition of Caliber System was finalized in January 1998. [2]

In preparation for this major acquisition, FedEx had reorganized as a holding company, FDX Corporation, in October 1997. [5] When its acquisition of Caliber was finalized, FDX was the parent of both FedEx and Caliber's subsidiaries. It then embarked on significant reorganization to merge its existing business with the new subsidiaries. As part of this effort, it made broad changes to branding for the new acquisitions in 2000. FDX Corporation changed its name to FedEx Corporation, Federal Express was renamed FedEx Express, RPS became FedEx Ground, Caliber's same-day-critical trucking subsidiary, Roberts Express, became FedEx Custom Critical, [6] and its LTL freight carrier, Viking Freight was re-branded FedEx Freight in 2001. [7]

FedEx Ground launched a US residential delivery service, FedEx Home Delivery Service, in 2000. It was later renamed FedEx Home Delivery. [8] In 2004, FedEx acquired New Berlin, Wisconsin-based parcel consolidator Parcel Direct from magazine and catalog printer Quad Graphics for $120 million. Following the acquisition, Parcel Direct was renamed FedEx SmartPost and became a subsidiary of FedEx Ground. [9]

On January 14, 2013, FedEx named Henry Maier CEO and President of FedEx Ground, to take effect after David Rebholz retired on May 31, 2013. [10]

Until 2018, most FedEx Ground US operations were five days per week but this was expanded to six in September 2018 due to the rise in demand driven by e-commerce. [11] Its US services were expanded again during the 2019 holiday peak season to seven days per week, a change which became permanent for the majority of the US population year-round in January 2020. [12]

Services

FedEx Ground

A FedEx Ground truck at a FedEx Office location FedEx (15014052529).jpg
A FedEx Ground truck at a FedEx Office location

FedEx Ground is the division's core package delivery service which delivers daily to all 50 US states with delivery timeframes of 1-5 days for the Contiguous United States and 3-7 days for Alaska and Hawaii. Its FedEx International Ground service ships packages between the United States and Canada and within Canada. [13]

Given its focus on deliveries to commercial locations, FedEx ground had operated on a five-day a week schedule (Monday-Friday). However, in 2018, it changed its year-round operating schedule to six-days a week (Monday-Saturday) for most US locations [11] and subsequently to seven-days a week in January 2020. [12]

FedEx Home Delivery

FedEx Home Delivery is a residential delivery service available in the US. It was launched as FedEx Home Delivery Service in 2000 delivering five days a week, Tuesday through Saturday. [8] [14] In 2020, the service expanded to seven days a week to most of the US. The maximum per package weight was also increased from 70 pounds to 150 pounds at the same time bringing it inline with the FedEx Ground limit. [15]

FedEx Ground Economy

A FedEx SmartPost facility in Maple Grove, Minnesota FedEx SmartPost Warehouse (48650942916).jpg
A FedEx SmartPost facility in Maple Grove, Minnesota

FedEx Ground Economy is a subsidiary of FedEx Ground which provides a parcel consolidation service most commonly used for residential deliveries of small, lightweight parcels. It is cheaper than ground package delivery but speeds are generally one to two days slower. Parcels are trackable but delivery dates are not guaranteed. [16] The service is available only to shippers who meet certain requirements and have a SmartPost contract in place with FedEx. [17]

Ground Economy was originally Parcel Direct, founded in 1998 by Quad Graphics to provide delivery services for its catalog publishing customers. [18] Since its founding, Parcel Direct had expanded both its network of hub facilities and its parcel services buying Commerce, California-based parcel delivery company PaqFast, Inc. in early 2004. [19] When FedEx acquired it in 2004, Parcel Direct had 12 distribution hubs across the US and 450 employees. [9]

Parcel Direct's parcel consolidation model relied on "zone skipping", a logistics approach where packages are transported most of the way to their destination through the carrier's network and handed over to the USPS for delivery. This reduces costs by allowing bulk transportation of parcels between hubs and not requiring it to maintain its own final mile delivery network. [9]

Under FedEx, Parcel Direct was rebranded FedEx SmartPost and continued to grow its hub network, reaching 26 nationwide by 2021. [20] Pickups from smaller shippers are performed by FedEx Ground which transfers them into the SmartPost network at the nearest hub. Dedicated FedEx SmartPost trailers pick up from larger shippers and transport shipments directly into the network.

Initially, all final mile deliveries were handled by the USPS. However, starting in 2019, FedEx began shifting SmartPost deliveries to its own Ground and Home Delivery networks [21] and in 2020 said it had completed the shift and was delivering nearly all SmartPost packages itself. [22] FedEx rebranded the service FedEx Ground Economy in 2021. [17]

Branding

Former logo; the green Ex was later changed to orange FedEx Ground.svg
Former logo; the green Ex was later changed to orange

In the early 2000s, most FedEx operating units used variants of the FedEx logo with a purple Fed followed by Ex in various colors. Only the FedEx Express unit used the original color combination of a purple Fed and orange Ex. The FedEx Ground logo used a green Ex under this branding. In August 2016, FedEx announced that it would be standardizing all its operating units to use the purple Fed and orange Ex previously used by FedEx Express. While the rebranding began in 2016, FedEx said it expected it to take until 2021 for all other color variants to be phased out across all operating units. [23]

Related Research Articles

<span class="mw-page-title-main">FedEx</span> American freight and package delivery company

FedEx Corporation, formerly Federal Express Corporation and later FDX Corporation, is an American multinational conglomerate holding company focused on transportation, e-commerce and business services based in Memphis, Tennessee. The name "FedEx" is a syllabic abbreviation of the name of the company's original air division, Federal Express, which was used from 1973 until 2000. FedEx today is best known for its air delivery service, FedEx Express, which was one of the first major shipping companies to offer overnight delivery as a flagship service. Since then, FedEx also started FedEx Ground, FedEx Office, FedEx Supply Chain, FedEx Freight, and various other services across multiple subsidiaries, often meant to respond to its main competitor, UPS. The company is the fifth largest American-headquartered employer globally with 547,000 employees, and FedEx is also one of the top contractors of the US government and assists in the transport of some United States Postal Service packages through their Air Cargo Network contract.

<span class="mw-page-title-main">United Parcel Service</span> American package delivery company

United Parcel Service, Inc. (UPS) is an American multinational shipping & receiving and supply chain management company founded in 1907. Originally known as the American Messenger Company specializing in telegraphs, UPS has grown to become a Fortune 500 company and one of the world's largest shipping couriers. UPS today is primarily known for its ground shipping services as well as the UPS Store, a retail chain which assists UPS shipments and provides tools for small businesses. UPS offers air shipping on an overnight or two-day basis and delivers to post office boxes through UPS Mail Innovations and UPS SurePost, two services that pass on packages to the United States Postal Service for last-mile delivery.

<span class="mw-page-title-main">Package delivery</span> Type of delivery service

Package delivery or parcel delivery is the delivery of shipping containers, parcels, or high-value mail as single shipments. The service is provided by most postal systems, express mail, private courier companies, and less-than-truckload shipping carriers. Package delivery is different in each country, and how packages are delivered is closely connected with the cost for delivering to that country as well as population. In 2019, China, The United States, and Japan were the leaders in package delivery while Latvia, Macau, and Iceland were the bottom three. The population of the bottom three barely totals 2 million while the population of the top three tops totals more than 2 billion. Package delivery is an every day occurrence in the US while many other countries do not have this luxury.

<span class="mw-page-title-main">DHL</span> German delivery and express mail company

DHL is a German logistics company providing courier, package delivery and express mail service, delivering over 1.7 billion parcels per year. A subsidiary of the German logistics firm DHL Group, its express mail service DHL Express is one of the market leaders for parcel services in Europe and Germany's main courier and parcel service.

<span class="mw-page-title-main">Cargo</span> Goods or produce transported

In transportation, freight refers to goods conveyed by land, water or air, while cargo refers specifically to freight when conveyed via water or air. In economics, freight refers to goods transported at a freight rate for commercial gain. The term cargo is also used in case of goods in the cold-chain, because the perishable inventory is always in transit towards a final end-use, even when it is held in cold storage or other similar climate-controlled facilities, including warehouses.

<span class="mw-page-title-main">Courier</span> Person or company delivering items

A courier is a person or organization that delivers a message, package or letter from one place or person to another place or person. Typically, a courier provides their courier service on a commercial contract basis; however, some couriers are government or state agency employees.

Caliber System Inc., known until 1996 as Roadway Services Inc., was a transportation holding company based in Akron, Ohio. During its history, Caliber owned a number of logistics companies including Roadway Express, Viking Freight and Roadway Package System (RPS) among others. Roadway Express was spun off in 1995 and Caliber was acquired by FedEx in 1998 with subsidiaries becoming FedEx Ground, FedEx Freight, FedEx Custom Critical and FedEx Global Logistics.

American Freightways Corp. (AF) was an American regional less than truckload (LTL) carrier based in Harrison, Arkansas. It was acquired by FedEx in 2001, renamed FedEx Freight East in 2002, and its operations were merged with FedEx's other LTL subsidiaries in 2010 to form FedEx Freight Inc.

<span class="mw-page-title-main">FedEx Express</span> Cargo airline based in Memphis, Tennessee, United States

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<span class="mw-page-title-main">Parcel post</span>

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Roadway Express, Inc. was an American trucking less than truckload (LTL) trucking company. Roadway Express and its holding company, Roadway Corporation, were acquired by logistics holding company Yellow Corporation in 2003, and the parent companies were merged to form Yellow Roadway Corporation, later renamed YRC Worldwide. In 2009, Roadway Express was merged with YRC's other national LTL carrier, Yellow Freight, to form YRC, Inc.

UPS Airlines is a major American cargo airline based in Louisville, Kentucky. One of the largest cargo airlines worldwide, UPS Airlines flies to 815 destinations worldwide. It has been a wholly owned subsidiary of United Parcel Service since its launch in 1988.

<span class="mw-page-title-main">TForce Freight</span> American trucking company formerly UPS Freight

TForce Freight, a subsidiary of TFI International, is an American less than truckload (LTL) freight carrier based in Richmond, Virginia. The company was founded in 1935 as Overnite Transportation, the name it used until 2006 when it was rebranded UPS Freight by new owner UPS. Its name changed to TForce Freight in 2021 when UPS sold the company to TFI.

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References

  1. ↑ "The Small Parcel Oligopoly". Seeking Alpha . Ohio Capital Ideas. September 20, 2010. Archived from the original on August 19, 2021. Retrieved April 5, 2022.
  2. 1 2 Lott, Ethan (August 17, 2000). "Delivering the goods". Pittsburgh Business Times. Retrieved April 6, 2022.
  3. ↑ Mall, Scott (May 18, 2021). "FreightWaves Haul of Fame: Roadway Express was an LTL leader for decades". FreightWaves. Archived from the original on August 19, 2021. Retrieved April 6, 2022.
  4. ↑ "Roadway adopts new name". Pittsburgh Post-Gazette. November 28, 1995. p. 43. Archived from the original on October 29, 2021. Retrieved August 26, 2021– via Newspapers.com.
  5. ↑ "File No. 2803030". Delaware Department of State, Division of Corporations. Archived from the original on July 21, 2011.
  6. ↑ "FedEx history". FedEx. Archived from the original on August 19, 2021. Retrieved April 6, 2022.
  7. ↑ Parry, Tim (February 7, 2020). "American Freightways and Viking Freight become FedEx Freight". Fleet Owner. Retrieved May 20, 2021.
  8. 1 2 Jindel, Satish (January 3, 2018). "Pressure increases on couriers for seven-day B2C service". JOC. Retrieved April 6, 2022.
  9. 1 2 3 Miller, Abby (September 14, 2004). "FedEx Corp. Finishes $120 Million Acquisition of Parcel Direct". DMN. Retrieved April 6, 2022.
  10. ↑ "FedEx Corp. Announces Henry J. Maier to Succeed David F. Rebholz as President and CEO for FedEx Ground" (Press release). FedEx.
  11. 1 2 Berman, Jeff (September 12, 2018). "FedEx Ground increases delivery schedule to six days a week". Logistics Management. Retrieved April 6, 2022.
  12. 1 2 "FedEx Ground Announces Seven-Day Residential Delivery Year-round". About FedEx (Press release). Retrieved May 30, 2019.
  13. ↑ "FedEx Ground". FedEx. Retrieved May 20, 2021.
  14. ↑ "FedEx Home Delivery". FedEx. Retrieved May 20, 2021.
  15. ↑ "FedEx: new investment gives FedEx Ground "significant weekend competitive advantage"". Post & Parcel. September 7, 2020. Retrieved April 6, 2022.
  16. ↑ "Carrier Consolidation Services: An Inside Guide to UPS Basic & FedEx SmartPost". Parcel Industry.
  17. 1 2 "Is FedEx Ground Economy the same as FedEx SmartPost? (FAQ) – Detailed Image". Detailed Image. Retrieved May 20, 2021.
  18. ↑ Cassidy, William B. (August 10, 2004). "FedEx Buys Parcel Direct". JOC. Retrieved April 6, 2022.
  19. ↑ "Quad to sell Parcel Direct to FedEx for $120M". Milwaukee Business Journal. August 9, 2004. Retrieved April 6, 2022.
  20. ↑ "FedEx Distribution – FedEx Distribution Center – FedEx Transportation". FedEx.
  21. ↑ Garland, Max (August 9, 2020). "Changes are coming to the US Postal Service. What could that mean for FedEx?". Memphis Commercial Appeal. Retrieved April 6, 2022.
  22. ↑ Meldner, Richard (May 31, 2019). "FedEx Ditches Post Office And Expands To Seven-Day Residential Delivery". eSeller 365.
  23. ↑ Birkner, Christine (August 24, 2016). "FedEx Is Making All of Its Logos Purple and Orange, Its Most Recognized Color Scheme". AdWeek. Retrieved April 6, 2022.
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