FedEx Making Operational Changes to Reduce Cost
FedEx Express lower revenue deferred shipments are growing faster than higher revenue, priority shipments. FedEx has known that they could realize significant savings by making shift changes to more efficiently manage this move from priority to deferred shipments.
This would involve moving full-time drivers from daytime shifts to 12:00 pm start times. Part-time drivers could then support morning delivery of lower volume, priority parcels. Such a shift change would be a huge inconvenience to full-time drivers.
FedEx has deferred this cost driven change because to do so would impose a significant lifestyle change/burden on legacy full time drivers and their families. However, given the race between UPS and FedEx to drive improved margin, FedEx can no longer defer this opportunity to reduce cost.
It is not lost on me that this major reorganization is taking place after UPS CEO Carol Tome has demonstrated her desire to do whatever it takes to drive improved margin at UPS. We know that Carol Tome is driving radical change at UPS… and may be doing the same thing at FedEx.