FedEx Freight expands FedEx Freight Direct service offering

Earlier this week, FedEx Freight, the less-than-truckload (LTL) subsidiary of Memphis-based transportation and logistics bellwether FedEx, said it has expanded its last-mile and e-commerce-focused FedEx Freight Direct offering.

FedEx Freight describes FedEx Freight Direct as an e-commerce service that handles the delivery of bulky items like furniture, televisions, and exercise equipment, among other items.

In January, Bloomberg reported that FedEx took its initial steps with FedEx Freight Direct through the testing of a full-service residential delivery bulky product, a $9 billion market that has been traditionally handled by motor carriers, rather than couriers and integrators, as larger items tend to not fit well in couriers and integrators sorting operations. And the report added that the focus of this pilot program was on industrial goods in six major markets, with FedEx Freight moving large items and sectional sofa into a customer’s home and assembling them, too.

“FedEx Freight is in the beginning stages of piloting a new service, FedEx Freight Direct, that will move larger, bulkier items to customers’ homes and businesses, and even offer light assembly for an additional fee,” FedEx said in a statement e-mailed to LM earlier this year. “Demand for these types of delivery services has grown in recent years and we expect that trend to continue.”

Company officials said that with this week’s announced expansion FedEx Freight Direct is the first standardized FedEx service to “cross the threshold” and place deliveries inside the door and reaches more than 80% of the contiguous U.S. population. And they added that the ongoing advent of e-commerce has changed customer expectations and create new LTL market opportunities, including an increase of inbound freight to distribution centers, with e-commerce shippers continuing to build more facilities in closer proximity to their end customers, coupled with the delivery of bulky items to customers purchasing larger items online and expect delivery to their homes or business locations.

“Today’s consumers are just as comfortable purchasing a television or sofa online as they are groceries or books,” said Brie Carere, FedEx executive vice president and chief marketing and communications officer, in a statement. “We’re seeing more oversized items move through our global network. FedEx Freight Direct is critical to addressing these challenges as part of our growing e-commerce portfolio.”

FedEx Freight Direct is offered through three different services, including:

• Standard: Currently available to over 80% of the contiguous U.S. population through 173 service centers using the FedEx Freight Priority LTL network, Standard offers delivery into the first room of convenience in a residence or business. This includes a two-hour delivery window and the ability for customers to select delivery times and receive proactive notifications;
• Premium: Includes the same features as Standard along with delivery to room of choice and optional packaging removal. Premium deliveries will be conducted by two FedEx Freight team members to ensure safety and quality service; and
• Basic: To the door service, currently offered as Residential delivery, With to-the-door Basic coverage available to 100% of the contiguous U.S. population and Standard and Premium service coverage continuing to expand, FedEx Freight Direct will meet customer demands for delivery of heavy/bulky goods.

The entrance into the last-mile market by FedEx is not unique, in that many of its primary competitors have already taken the step, with some having a major foothold established.

These companies include XPO Logistics, Ryder System, and J.B. Hunt, among others. One thing XPO, J.B. Hunt, and Ryder each has in common in this space is that they have made acquisitions to gain immediate entrance into the last-mile logistics market, which has given them room to run and expand operations while becoming a market player and leverage the very active e-commerce market at the same time.

Earlier this year, J.B. Hunt subsidiary, J.B. Hunt Transport Inc., entered into a definitive agreement to acquire Secaucus, New Jersey-based Cory’s First Choice Home Delivery, which provides home delivery services of big and bulky products in the continental United States and U.S. territories using 14 warehouses and other customer-owned facilities. The company utilizes more than 1,000 independent contractors, carriers and delivery drivers to complete more than 2 million annual deliveries.

Top executives at these companies and others have indicated that they will continue to invest in last-mile initiatives, as that is where their customers are seeing strong growth, due to e-commerce, and they have also noted that the impact of a rapidly growing e-commerce market on the last mile sector, especially for heavy goods, is something that cannot be overstated.