FedEx Corp. next month will implement a streamlined pricing structure for parcel pickups in the U.S. and Canada aimed at simplifying the customer experience. The move is made possible by the company’s ongoing campaign to collapse separate Express and Ground delivery networks into a single operation.
The new rating structure, which takes effect Aug. 18, will charge one fee for both expedited or standard shipping, even if FedEx (NYSE: FDX) performs two pickups in the same day. For regularly scheduled and automated pickups, customers will be charged weekly based on the number of pickup days. On-demand pickups will be charged per-stop, FedEx explained on its website.
(Automated pickups occur if participating shippers generate a shipping label by a specified time. If no shipping label is generated on a given day, the pickup is automatically canceled.)
FedEx said business customers have long clamored for a single pickup instead of having to prepare packages for separate FedEx Express and FedEx Ground pickups, often on the same day. FedEx this year is ramping up the rollout of its Network 2.0 strategy for integrating the two networks into a single one under the FedEx Express brand. The goal is to increase efficiency by consolidating parcel sorting in common facilities and having a single van deliver parcels to neighborhoods rather than different vans crisscrossing the same area multiple times per day.
In early June, Memphis, Tennessee-based FedEx folded together the operation of 30 stations across 11 local markets and was on track to combine another 33 stations across nine markets by the end of the month, CEO Raj Subramaniam said during the company’s earnings presentation on June 24. About 2.5 million packages, or 12% of total volume, are now flowing through consolidated facilities on an average daily basis.
The new pricing structure benefits customers by providing consistent and straightforward rates instead of customers having to track costs by the service offering being used, according to the carrier. It also provides more control in scheduling pickups because businesses can select the number of regular pickup days that fit their needs. Rather than charging ad hoc pickup fees per-package, FedEx will charge per-stop, which likely will save shippers money. And on-call shipments can be consolidated into regular pickups, further streamlining pickup activity.
Fees will vary based on the day of pickup and how it is scheduled. A future-day pickup, for example, will cost $9 or $10.50 per stop, depending on whether it is scheduled online or by phone. A same day on-call pick up will cost $14.75 or $16.75.
Click here for more FreightWaves/PostalMag stories by Eric Kulisch.
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