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On Friday, Feb. 3, FedEx Office, a subsidiary of FedEx Corp., announced that they would be shuttering SameDay City Service. The service will remain in place until March 31, 2023, and all positions related to the service will be eliminated, according to reporting from Supply Chain Dive.
The news comes as parcel shipping demand continues to fall from pandemic heights. Persistent inflation, safer in-person shopping experiences, and falling consumer spending rates have forced legacy parcel carriers, like FedEx and its rivals UPS, USPS, and DHL, into a difficult situation.
With more transportation layoffs likely looming, shippers are wondering what the impact of FedEx’s latest layoffs will be on their supply chains.
FedEx Office’s shuttering of SameDay City comes on the heels of previous layoffs from FedEx. In a Feb. 1 announcement, FedEx CEO Raj Subramaniam announced a significant restructuring in the top tiers of FedEx’s organizational structure, reducing its officer and director team by more than 10%. “Unfortunately, this was a necessary action to become a more efficient, agile organization,” wrote Subramaniam, “It is my responsibility to look critically at the business and determine where we can be stronger by better aligning the size of our network with customer demand.”
In addition to layoffs at the top of the organizational structure, FedEx plans to institute furloughs of delivery personnel in the coming weeks, according to reporting from Supply Chain Dive. Furloughed workers will continue to receive benefits as well as other financial incentives throughout the furlough period, which is expected to last from March 5 to May 27.
Despite the company having recent growth in its stock, with Barron’s reporting that FedEx (NYSE: FDX) prices rallIed roughly $5 following Subramaniam’s announcement, FedEx finds itself forced to restructure to meet the demands of a changing marketplace.
With FedEx instituting layoffs and furloughs at all levels of their organization, shippers are left wondering what effect these decisions will have on parcel operations. However, it’s important to note that it’s not just FedEx cutting services in an attempt to restructure after the COVID-19 pandemic. DHL subsidiary Genesis recently laid off 35 workers from its Henrico County, Va. plant, according to Richmond BizSense, and other industry giants like Flexport, C.H. Robinson, and DSV have begun relying on layoffs to restructure operations around falling volumes, per Supply Chain Dive.
As transportation industry layoffs continue to set supply chain professionals on edge, shippers are searching for new strategies to bolster resiliency and efficiency in parcel operations without increasing overhead costs. For many parcel shippers, the new, bare-bones structure at legacy carriers like FedEx will require a new emphasis on streamlined parcel management and greater reliance on regional and alternative carrier options..
With wide-ranging layoffs affecting all corners of the transportation industry, parcel shippers are working to build resilience in their operations. By investing in tech-forward solutions, shippers can improve resiliency, optimize efficiency, and build independence from labor-strapped legacy carriers.
While almost all shippers are using data to build resilience in the aftermath of the COVID-19 pandemic, few are taking full advantage of their data sets.
By partnering with a cloud-based, industry-agnostic data services provider, shippers can automate costly, inefficient data aggregation processes, ensuring their data is transformed into actionable analytics while bolstering the bottom line.
As legacy carriers cut services, shippers are reliant on an ever-expanding network of 3PLs and logistics partners to provide parcel delivery services to their customers. However, these growing networks can quickly spread beyond a shipper's control, resulting in mismanaged exceptions, delayed shipments, and dissatisfied clientele.
With real-time visibility through a cloud-based parcel management software provider, shippers can instantly see the real-time location of a package within their supply chain. For shippers losing control of unmanageable supply chains, real-time visibility provides the ground-level control they need to optimize complex operations.
While actionable analytics and real-time visibility can provide shippers with the flexibility and awareness they need to navigate increasingly complex parcel shipping operations, those solutions are only as useful as the platform through which they’re accessed.
Through a partnership with a cloud-based parcel management software solution, logistics partners throughout the supply chain can take advantage of the latest in optimized parcel management solutions — regardless of the challenges facing the broader transportation industry.
With ongoing layoffs threatening to send parcel shipping operations into chaos, shippers are turning to technology to build resilience in their operations. With over two decades of experience, the transportation experts at Intelligent Audit are ready to harness the latest supply chain innovations to help shippers optimize parcel operations.
Get started with Intelligent Audit today, and see how two decades of transportation innovation can help your business ship smarter.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
