FedEx Corp. plans to scale back even more on Sunday package deliveries as the courier grapples with faltering e-commerce demand.
The pullback will reduce the availability of Sunday service to “more than 50%” of the U.S. population, according to an internal memo. FedEx had announced in July that it would slash coverage on that day to roughly 80% of U.S. residents from 95%.
The company expects to halt the service in select areas beginning in mid-March, according to the unsigned January 6 memo, which was sent to the contractors that make deliveries for its ground unit. FedEx will decide next month which markets will be affected.
The courier said in a separate statement January 10 that Sunday deliveries would continue primarily in “densely populated areas with proven customer demand.”
“As we continue to adapt and streamline the FedEx global network to meet our customers’ needs in a rapidly shifting landscape, FedEx Ground is making further adjustments to better align our Sunday residential delivery operations with current customer demand,” the company said.
The move is the latest step in FedEx’s effort to reduce costs, improve efficiency and deal with a decline of package volume as people return to shopping at retail stores following a surge of online purchases during the pandemic. During the quarter that concluded at the end of November, package volume at the ground unit fell 9.1%.
FedEx sees seven-day service as giving it an advantage over its main competitor United Parcel Service Inc., which doesn’t deliver directly on Sundays.
FedEx shares fell less than 1% at 1:40 p.m. in New York January 10. The latest Sunday change was reported earlier by Insider.
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