With carrier networks at or pushing capacity limits, it’s no secret that they’re struggling to meet on-time commitments to their customers.
On Monday, September 21st, 2020 FedEx announced that they are changing their time commitments on certain express services. Effective September 28th, 2020, express services, including Priority Overnight, 2Day AM, and International Priority, time commitments are changing from 10:30AM to 12PM. Standard Overnight and International Priority Freight will also change from 3PM to 4:30PM.
|Express Service||Delivery Type||Current Commit Time||New Commit Time|
|FedEx Priority Overnight (PO)||Residential||10:30 a.m.||12 p.m.|
|FedEx 2Day A.M. (E2)||Residential||10:30 a.m.||12 p.m.|
|FedEx International Priority (IP) US inbound||Residential||10:30 a.m.||12 p.m.|
|FedEx International Priority Direct Distribution (IPD) (E2) US inbound||Residential||10:30 a.m.||12 p.m.|
|FedEx Standard Overnight (SO)||Commercial||3 p.m.||4:30 p.m.|
|IP and FedEx International Priority Freight (IPF) using East Coast Special Solution (ECS) US inbound||Commercial and residential||3 p.m.||4:30 p.m.|
FedEx says these adjustments will provide its customers with more reliable service as eCommerce continues to expand as we head into peak season. In hindsight, these commitment times will give shippers a better understanding of accurate delivery times that shippers can expect in the capacity crunch we’re in now.
The new commitment times bring up some questions shippers need to answer. Now that priority overnight deliveries will arrive around 12 pm, is it worth going with a cheaper service like Standard Overnight, which will be delivered only a few hours later? Do your customer need their products before noon, or can it wait till 4:30 pm? If they can wait until 4:30PM, then can you just use a ground service and save considerable costs?These strategies to use cheaper services can make a significant cost impact, especially when carriers keep increasing their rates. Are the new commitment times enough to raise their on-time reliability? FedEx continues to invest in its network to add additional capacity to keep up with demand during peak, which may also help achieve their service commitments.
Shippers must adapt to everything the carriers throw at them to maintain a competitive edge in an industry that constantly changes.