FedEx Ground said yesterday it will roll out a residential delivery service, called FedEx Home Delivery, to 50 percent of the U.S. population on March 13.
“We will dispatch our contractors later in the morning so we are in the neighborhoods up until 8:30 at night,” said Daniel J. Sullivan, president/CEO at FedEx Ground, which is the new name for RPS, the ground-delivery subsidiary of Federal Express Corp., Memphis, TN. “We’ve found through our research that this is what people would like us to do. In addition, Saturday will be a normal delivery day for us.”
FedEx Home Delivery will be managed separately from the FedEx Ground operational network, even though it will use FedEx Ground for pickup and package sorting. In March, FedEx Ground will open 67 facilities in the 38 largest markets in the United States to handle the program, and it’s planning to open another 340 facilities during the next four years and expects to reach 98 percent of the population. FedEx is expected to hire 1,000 people at FedEx Ground. Also added to the service will be an automated delivery system with a vehicle route-planning feature that correctly assigns packages to specific routes in sequence and provides all contractors with maps for each of their deliveries.
The Home Delivery Service also will have a new logo and mascot – a dog called Spotcom, “that represents the feel-good approach to residential delivery,” Sullivan said.
While Sullivan did not have specific costs for the program, he said the typical cost of a three-day delivery from New York to Chicago would be in the $5.50 to $6 range.
“We will be very competitive and moderate our rates appropriately as we go forward,” he said.
The announcement was one of a series that Federal Express made last week in an effort to strengthen its competitive position and to offer new and more robust solutions for customers worldwide.
Another announcement was the launch of a new branding strategy. FDX Corp., Federal Express’s parent company, will be renamed FedEx Corp., and its global subsidiaries will operate under the FedEx brand name. Federal Express will retain its name but will modify its logo to FedEx Express; Roberts Express, the leader in the expedited, time-critical delivery sector, will be renamed FedEx Custom Critical; and FDX Logistics will be renamed FedEx Global Logistics. FedEx Corp. will not change the name of its Viking Freight subsidiary, a less-than-truckload carrier in the Western United States, and airfreight forwarder Caribbean Transportation Services.
“It’s time to leverage and extend one of our greatest assets, the FedEx brand, and to provide our customers an integrated set of business solutions,” said Frederick W. Smith, chairman and president/CEO at FedEx Corp.
FedEx also announced organizational changes planned to take effect over the next few months that will provide a single point of access to customers for sales, customer service, billing and automation systems.
The organizational changes are designed to make it easier to do business with the entire FedEx family. They include a toll-free telephone number (1-800-Go-FedEx); a Web site at www.fedexcorp.com for access to online package tracking and service feature information; an invoice and account number for express and ground transportation services; a streamlined customer automation platform to handle electronic transactions for small and large businesses; and convenient drop-off points for express and ground packages at select FedEx Authorized Ship Centers.
“These strategic actions are designed to fulfill our twofold business philosophy – to operate independently yet compete collectively,” Smith said. “We strongly believe that the optimal way to serve very distinct market segments such as express and ground is to operate highly efficient, independent networks with different facilities, different cutoff times and different delivery commitments. Our collective approach also allows customers to select the right network for the right place, at the right price through a single point of access.”
As a result of these efforts, FedEx is expected to incur costs of $100 million over three fiscal years in addition to the more than $250 million it incurred in fuel charges last year. However, FedEx said it is expecting $400 million in revenue synergies as a result of the new branding initiative for fiscal year 2001.
