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IPFS News Link • Transportation

Viewpoint: Parcel deliveries on Sundays -- not for free

• By Satish Jindel

Since consumers live in their homes seven days a week, few would argue that the weekends are the two best days for delivering parcels to residences.

That was true when parcel-delivery carriers obtained signatures for residential deliveries. However, in today's world with parcels delivered without even a knock on the door, the value of weekend deliveries has been diminished.

Carriers have been vocal about the high cost of last-mile deliveries to a residence compared to a business because of the poorer stop-density economics associated with residential deliveries. However, delivering online orders on Sundays only adds to the last-mile costs, in part because there is no weekend pickup volume at businesses to offset it.

Which brings us to FedEx Ground (NYSE: FDX), which starting next month will eliminate Sunday residential deliveries across 15% of its U.S. network due to the cost burdens on the FedEx Corp. unit and its 6,000 delivery contractors. Most of the cuts will be in rural and sparsely populated suburban areas where shipping activity is not robust.