FedEx Ground is poised for significant growth in 2020. With the FedEx Ground and Home Delivery service overlap transition finishing up in summer 2020, this will allow FedEx to turn on the proverbial volume spigot.
SmartPost Integration Has Begun
As has been previously announced, SmartPost volume will be fully integrated into FedEx Ground operations in 2020. Based on our conversations with ISPs in terminals where SmartPost has already been integrated, volume is now at Peak-like levels. This means ISP are experiencing volume bumps of 20-50% depending on areas they serve.
FedEx Express Volume Moving To Ground
A new development, as announced earlier this month, FedEx Express will be transitioning some of its Express packages to Ground for last mile delivery. These packages include 2 day delivery and other Express saver packages. What does this mean for growth for FedEx Ground ISPs? In short, this could be another significant bump in volume growth.
- Currently, FedEx Ground handles 9m packages per day (Fiscal 2019)
- FedEx Express handles 2.9m packages per day
- It is estimated that 1.1m packages of Express will fall into the category that FedEx Ground will be receiving
- As such, moving Express packages to Ground could translate into an incremental 12% growth for FedEx Ground ISPs
Bottom-Line: With the combination of SmartPost and Express moving into the Ground network, growth could approach 60% in 2020 for some ISPs.