FedEx Corp. plans to tuck the operations of its Ground network into the Express unit in Canada starting in April.
(Bloomberg) — FedEx Corp. plans to tuck the operations of its Ground network into the Express unit in Canada starting in April.
The move is part of the courier’s plan to combine its two distinct networks to gain efficiencies and to avoid the redundancy of drivers from both Ground and Express serving the same customers. The combination is expected to be completed before the peak holiday season next year.
“The new streamlined structure will position the company to more efficiently address future growth opportunities in the Canadian market,” FedEx said in an emailed statement. “Each market is unique and will be optimized based on a number of factors.”
Chief Executive Officer Raj Subramaniam laid out a plan in April to reap $6 billion of cost and efficiency gains by fiscal year 2027. FedEx anticipates $2 billion of that coming from its Network 2.0 initiative to merge the operations.
Read More: FedEx Aims to Cut Costs by Merging Delivery Networks
The Express network owns vehicles and has drivers on payroll whereas Ground uses about 6,000 contractors to deliver packages. In Canada, Express employs about 12,000 people and the Ground unit has about 4,700 employees, according to a spokeswoman.
(Corrects final paragraph to say 4,700 workers are employed by Ground unit)
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