FedEx’s delivery service aimed at extending online fulfillment cut-off times

FedEx Corp. (NYSE:FDX) said it has launched a service allowing participating retailers to fulfill online orders 5 to 8 hours later than usual while providing consumers with next-day deliveries in local markets and two-day deliveries across the continental US.

Through the service, dubbed “Extra Hours,” retailers can extend order cut-off times to as late as midnight depending on their order fulfillment process. The service recently started with retailers AutoZone (NYSE:AZO) and BestBuy Co. (NYSE:BBY) in multiple U.S. markets, FedEx said. More retailers are expected to join, the company said.

The deliveries will be provided by FedEx Express, FedEx’s air and international unit.

The service is designed to respond to customers’ desires to order late in the day and well into the evening because of the convenience of e-commerce, said Brie Carere, a FedEx senior vice president and the incoming chief marketing officer. Most online orders are placed after 4 p.m., and 64 percent of shippers expect to get next-day delivery as long as they place orders by 5 p.m., Carere said, citing FedEx data.

The service “aligns with the needs of online shoppers, while offering retailers a way to balance inventory and reduce transportation costs,” Carere said in a statement yesterday announcing the service.