Sign In Newsletters Contact Us
American ShipperModern ShipperNewsParcel FreightPostalMagTop Stories

FedEx to implement single pricing structure for express, standard pickups

Move coincides with elimination of dual delivery networks

Eric Kulisch
·
A FedEx driver picks up parcels at a business. FedEx is doing away with its dual pricing structure as it integrates the Express and Ground networks. (Photo: FedEx)

Key Takeaways:

  • FedEx is simplifying its U.S. and Canada parcel pickup pricing, starting August 18th, with a single fee for expedited or standard shipping, regardless of the number of pickups.
  • This change is driven by FedEx's Network 2.0 initiative, consolidating its Express and Ground networks for increased efficiency and single-van deliveries.
  • The new structure offers customers simplified pricing, more control over pickup scheduling (with options for regular or on-demand pickups), and potentially lower costs by charging per stop rather than per package.
  • The streamlined pricing is expected to benefit businesses by eliminating the need for separate pickups and reducing administrative overhead.
Key takeaways sponsored by SONAR

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.

FedEx to close 30% of package facilities as network integration ramps up

Switch to UPS saved US Postal Service 43% in air transport costs

FedEx navigates tariff swings to modest profit gain

FedEx retires a dozen freighter aircraft in efficiency move

Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He was runner up for News Journalist and Supply Chain Journalist of the Year in the Seahorse Freight Association's 2024 journalism award competition. In December 2022, Eric was voted runner up for Air Cargo Journalist. He won the group's Environmental Journalist of the Year award in 2014 and was the 2013 Supply Chain Journalist of the Year. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com