VOL. 9 | NO. 49 | Saturday, December 3, 2016
EMPHASIS: Distribution & Logistics
FedEx Expanded Its Network For Busiest Holiday Season on Record
By Michael Waddell
FedEx and retail businesses across the Mid-South are gearing up for a merry holiday season, with FedEx projecting a 10 percent increase in shipping volume over last year during the peak season from Black Friday to Christmas.
Adding 30 new planes since the 2015 holiday season, hiring more than 50,000 workers and investing $2 billion in additional capacity for ground operations, FedEx came prepared for what promises to be its busiest peak delivery season ever.
(Memphis News File/Andrew J. Breig)
Each of the four Mondays during the peak holiday season are expected to be among the busiest in the FedEx’s history, and the rise of shopping online is one of the main reasons for the increased traffic.
“Global e-commerce sales are projected to eclipse $3.5 trillion by 2019, accounting for more than 12 percent of all international retail sales by 2019,” said FedEx communications adviser Katie Wassmer. “It’s a growing trend and one we expect to continue. We see FedEx as a true engine of e-commerce – without the global physical network we operate around the world, the virtual shopping network can’t exist.”
Package volume is expected to be more than 25 million packages each Monday during the peak season compared to 12 million on an average day.
Beyond just the dramatic rise in volume, holiday promotions and buying patterns have resulted in heavy demand for package delivery on Mondays during the peak. The demand on Monday has accelerated in recent years as more and more retail locations have started serving as fulfillment centers for e-commerce orders.
To prepare for the upcoming rush, FedEx added more than 50,000 positions leading up to the peak season and made an estimated $2 billion capacity investment in FedEx Ground facilities/automation.
“FedEx Ground has added 19 fully automated stations and four major distribution hubs since last peak season,” said Wassmer. “This includes adding more than 12 million square feet of sortation space to our network, with four new hubs (Tracy, California; Ocala, Florida; Toronto, Ontario; and Metuchen, New Jersey), bringing our total number to 36, and dozens of new automated stations, for a total of 68.”
New stations have been added in Nashville and Knoxville, as well as Pittsburgh, Pennsylvania; Buffalo, New York; Sugar Land, Texas; and Tacoma, Washington. In addition, multiple facilities have been added in the Chicago area as well as New Jersey and the eastern Pennsylvania area.
“Our network expansion strategy includes the addition of non-conveyable annexes – separate buildings designed to handle those packages that do not fit on our sortation equipment,” said Wassmer. “We will operate six non-conveyable annexes this peak. These are strategically located in the areas where we’ve seen the highest percentage of non-conveyable packages historically and during peak.”
FedEx has also bulked up its air presence with 30 new aircraft since last year’s peak season, and enhanced vision systems have been installed on 270 aircraft, helping pilots with landing in low-visibility conditions.
“FedEx is investing heavily in our network to meet the growing needs of e-commerce, from the acquisitions of TNT, Genco and FedEx CrossBorder (formerly Bongo), to significant investments in our FedEx Ground network and the FedEx Express fleet,” said Wassmer. “These investments in people, facilities, aircraft and technology are all made to enable us to provide outstanding service to our customers.”
Local retailers also are among those contributing to FedEx’s holiday business.
“We use FedEx almost exclusively,” said Rebecca Dinstuhl, president of Dinstuhl’s Fine Candy Co. “I’m expecting this year to be a record-breaking Christmas season for us. We will be shipping more than 1,000 packages per day during the first two weeks of December. Santa’s elves will be here working their fingers off.”
Dinstuhl’s ships boxes of chocolate, towers of sweets, baskets filled with candies and cashew crunch, and a variety of other Christmas goodies. The company uses FedEx to ship custom gifts for different companies as well as individual gifts that customers select in store or from the company’s new website.
New this year is a five-pound box of chocolates, and hot items this year will be peppermint bark and “snow corn,” which is popcorn covered in white chocolate.
“It has a really short shelf like so we only make it before Christmas,” said Dinstuhl. “We also ship marzipan, a traditional beautiful piece of candy made from almond paste in the shapes of different fruits, all hand-molded and hand-painted.”
With Christmas Day falling on Sunday this year, FedEx has made a few adjustments for shipments made during the week of Christmas. FedEx Express will deliver on Christmas Eve, but it is not a service day for FedEx Ground. FedEx Hold at Location will be an option for customers on Christmas Eve.