FedEx reduces US Sunday deliveries as e-commerce cools

FedEx Corp. plans to scale back Sunday delivery service in far-flung areas of the US, the latest evidence that the e-commerce surge spurred by Covid-19 is ending. The courier’s Ground unit will pare service in rural and lightly populated areas, reducing its coverage to about 80% of the population from 95% now, according to a statement Thursday. “As economic conditions have shifted, we are making operational adjustments to suspend Sunday delivery operations in certain low-density, rural markets,” FedEx said. The 6,000 small companies that deliver packages for the Ground unit have been complaining that they’re losing money because of rising costs. On Wednesday, one large contractor called for Sunday service to be scrapped and for an extra payment to cover rising expenses for fuel, wages and vehicles. FedEx accelerated the rollout of Sunday service in 2020 to handle an historic increase of residential deliveries after Covid-19 spurred lockdowns to stem the spread of the virus. Volume at the Ground unit jumped 33% for the quarter ending in August 2020, during the height of the pandemic. In the latest quarter, the company reported the unit’s package volume fell 6.2%. It’s unclear what role the contractors’ complaints played in the decision to scale back Sunday service, which CEO Raj Subramaniam touted as a competitive advantage during an investor meeting in Memphis last month. <br/>