FedEx and Walgreens announce a package pickup and drop-off partnership at Walgreens stores

FedEx and national drugstore chain Walgreen Co. said yesterday that they are collaborating on a FedEx package pickup and drop-off services, which are now available at more than 7,500 United States-based Walgreens stores. The companies said this announcement comes on the heels of a long-term alliance agreement announced earlier this year “to offer convenient access to FedEx pickup and drop off at thousands of Walgreens locations across the country.”

FedEx officials said that this Walgreens rollout is part of the nationwide expansion of FedEx OnSite (ONSE), a network of retail locations offering FedEx pick up and drop off services, including the ability to hold packages for up to five business days.

And along with the more than 7,500 participating Walgreens locations, FedEx said customers can also find FedEx OnSite in select Albertson’s and Kroger grocery stores. Customers can redirect packages to a FedEx OnSite location or other FedEx hold locations, including more than 1,800 FedEx Office locations, using FedEx Delivery Manager.

“We are thrilled to have reached this significant milestone for our customers ahead of the holiday season, and we look forward to continuing to work with Walgreens to offer convenient and secure pickup and drop-off services around the country,” said Raj Subramaniam, executive vice president, chief marketing and communications officer, FedEx Corp., in a statement. “As online shopping grows, our customers are searching for flexible options, and we stand ready to deliver.”

The FedEx executive also pointed out that during the 2017 holiday season, 80% of the U.S. population is within nine minutes of a FedEx hold location.

This collaboration is likely to hurt smaller shipping stores that accept pre-labeled returns, according to Jerry Hempstead, president of Hempstead Consulting.

“FedEx pays the shops––and Walgreens––to accept the packages, so there will be competition for the drop off,” he explained. “It hurts the little guy with a shopping mall store mostly, and it adds a convenience for the sender because he may not have to travel as far to drop off. FedEx does not get any more packages from this, as the packages already find their way into the FedEx network. I guess their hope is that people rather than wait for a pick up will drop a package off thereby saving FedEx labor.”

This is not the first time Walgreens has collaborated with a major delivery partner for this type of endeavor.

In January 2008, it announced a partnership with DHL, with the intention of more than doubling the number of retail outlets offering DHL Express shipping services nationally. Walgreens was projected to expand to more than 6,500 locations by the end of 2008 with more than 1,600 stores open 24 hours a day. At the time, Walgreens and DHL said that this agreement “would bring an unprecedented strategic retail partnership to the express delivery industry with the highest level of convenience and accessibility for small businesses and consumers.”

But this agreement never came to fruition as DHL exited the U.S. market in November 2008, as it was unable to keep pace with, and take market share from both FedEx and UPS.