Dive Brief:
- FedEx has closed 100 stations as of May 31 as part of the carrier's plan to combine its separate Express and Ground networks, President and CEO Raj Subramaniam said on an earnings call Tuesday.
- The yearslong combination effort called Network 2.0 is picking up pace this year. By May's end, FedEx had converted 290 stations to handle combined volumes, Subramaniam said. This month, the company expects to integrate 63 additional stations across 20 markets.
- "That means we exit June with roughly 2.5 million average daily volume flowing through Network 2.0-optimized stations," Subramaniam said. FedEx's average daily U.S. volume was 13.8 million in Q4 of fiscal year 2025.
Dive Insight:
Through Network 2.0, FedEx is shuttering dozens of facilities and adjusting others to move toward a future without overlapping Express and Ground delivery routes. Executives on Tuesday's call said they were pleased with the initiative's results so far.
"We're seeing good progress on both the reliability side as well as the financial side for those locations we have transitioned," EVP and CFO John Dietrich said.
FedEx has already fully optimized its Canada operations for Network 2.0 and is now implementing the overhaul in larger U.S. markets, per an earnings presentation. The carrier expects to see $2 billion in savings by the end of fiscal year 2027 as a result of the plan.
Beyond financial upside, FedEx is counting on Network 2.0 to improve its position against competitors like UPS. The company is consolidating its pickup activities through the plan so shippers won't have to juggle separate Express and Ground appointments. FedEx is adjusting its pickup prices in August to support that effort.
The earnings call came a few days after Fred Smith, FedEx's founder and executive chairman, died of natural causes. Smith, whose company became a logistics powerhouse and express delivery pioneer after launching operations in 1973, was 80 years old.
FedEx's board of directors elected Vice Chairman R. Brad Martin to take over as board chairman, per a securities filing.
