UPDATE: Oct. 16, 2019: FedEx announced it is expanding FedEx Freight Direct to "more than 80 percent of the contiguous U.S. population" after a pilot of the service. The logistics company cited increased e-commerce sales for higher demand in the less-than-truckload market. "We're seeing more oversized items move through our global network," Brie Carere, the FedEx executive vice president and chief marketing and communications officer, said in a statement.
Dive Brief:
- FedEx Freight Direct has expanded into multiple zip codes in 11 states as the company says demand for bulky home delivery is on the rise, a company spokesperson confirmed to Supply Chain Dive.
- "The new service will move larger, bulkier items into customers’ homes and businesses," the spokesperson said in an email. The service was in the pilot phase earlier this year and executives mentioned it late last year on earnings calls. It was previously only available in five cities, according to Commercial Appeal, which first reported on the expansion.
- "The heavy hard to handle market is one of the fastest-growing segments in e-commerce and it represents roughly $10 billion market opportunity," COO Raj Subramaniam said on the company's Q2 earnings call this past December.
Dive Insight:
Shipments through FedEx Freight Direct can originate from anywhere in the continental U.S., but the destination has to be one of the select zip codes across 11 states including Alabama, Florida and Texas. The full list of zip codes is available on the FedEx website.
FedEx Freight had delivered bulky items before Freight Direct, but not to residential locations, Bloomberg reported in January.
FedEx CEO Fred Smith said in December that heavy, hard to handle items require a dock-height truck, a lift gate and dollies to move it. These kinds of requirements limit the transportation options a company has when picking up a delivery.
Freight Direct size and weight limits
| Surcharge | Max weight per piece | Max length per piece | Max dimension per piece | |
|---|---|---|---|---|
| FedEx Freight Direct Standard | $100 | 150 pounds | 108 inches | 165 inches in length and girth combined |
| FedEx Freight Direct Premium | $175 | 300 pounds | 108 inches | 165 inches in length and girth combined |
Shipments exceeding these limits require approval from the carrier and might result in additional charges.
Logistics companies are looking to bulky delivery as a potential growth area as consumers are increasingly buying larger items online.
Earlier this year, J.B. Hunt acquired Cory 1st Choice Home Delivery to help the company move into the big and bulky delivery segment. Ryder similarly looked to deals to help it move into large item delivery when it acquired all of the outstanding equity of MXD Group.
Amazon has seen this demand for larger items and has designed fulfillment facilities specifically with these sales in mind. Other retailers, including Home Depot and Best Buy, are making similar investments in their supply chains.
Last year, there were reports of UPS considering a move into the bulky in-home delivery space.
But the move into the bulky home delivery space hasn't worked out for everyone. Schneider National announced recently it was shutting down its First to Final Mile service that handled deliveries of home goods and bulky items. Schneider said the service's financial performance was failing to meet expectations and was not improving at a desirable rate.
