Fedex arms teaming up
Fedex Express and Fedex Ground to share Montana site — and some deliveries.
Fedex Express and Fedex Ground employees in a Montana city will soon be working in the same building, and, for some shipments, together.
Fedex Express employees in Kalispell, Montana, will conduct operations at Fedex Ground’s facility there once a building lease begins August 31. The two companies’ work in that building “will remain independent of one another,” Fedex said in a statement.
Fedex Express will, however, hand off some packages to Fedex Ground in Kalispell for delivery. Express and Ground’s cohabitation in the city is the latest example of the two separate companies interacting with each other, following frequent analyst calls to integrate parts of the two.
“We will manage these changes as we would any shift in package volumes,” Fedex said. “Fedex networks are built for flexibility and we are always adjusting to accommodate different customer needs.”
Fedex Ground’s Kalispell facility was a topic on the city’s July 9 site development review committee agenda, regarding the development of an “Office trailer and mobile distribution ramp” there. A city representative did not immediately respond to a request for comment on the agenda item Monday.
Fedex didn’t say if the move would lead to any layoffs among Express employees in the area, but the company said it is "helping our team members understand these operational changes and any shifts in their day-to-day responsibilities." Fedex currently has a ship center handling Express services and other operations about 7 miles north of the Ground facility.
Express and Ground, Fedex’s two largest operating companies, have long been kept apart, with executives insisting they serve different roles in the delivery business. Express is known for shipping premium, time-sensitive packages with help from its air cargo fleet, while Ground focuses on economical, residential shipments.
Fedex launched a link between the two companies in February, announcing that Express would begin contracting with Ground in select markets, a move to increase delivery efficiencies. The program has Express hand off some home deliveries to Ground, if it can meet the original delivery date.
“Fedex is constantly evaluating how best to optimize our operations to meet growing customer demand for our services,” Fedex said in its statement. “As e-commerce continues to grow, we are flexing our networks and building solutions to serve residential areas most efficiently while leveraging the individual strengths of our operating companies.”
Fedex has made moves to lower home delivery costs as online shopping orders have surged. Making delivery routes cost-effective is a particular challenge in rural areas such as northwest Montana, where Kalispell is.
Putting Express packages in Ground vans gives couriers more deliveries per route, which executives have stressed is important to boost efficiency.
Max Garland covers Fedex, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-5292651 and on Twitter @Maxgarlandtypes.