FedEx is closing three ship centers in its U.S. network in the coming months as it advances its Network 2.0 initiative, a company spokesperson said in an email to Supply Chain Dive.
A facility in Lexington, Kentucky, is closing March 3. The Lexington closure will impact 122 employees, the majority of which are couriers, according to a Worker Adjustment and Retraining Notification (WARN) Act notice sent Jan. 3.
"Employees whose positions are eliminated will be provided the options to consider transfer to new locations, severance, or a leave of absence during which they may pursue other positions with FedEx," the notice said.
Locations in Staten Island, New York, and Erie, Pennsylvania, are scheduled to close in June. WARN Act notices had not been filed for those facilities as of Tuesday. The FedEx spokesperson said information on layoffs won’t be available “until closer to the closure date as employees weigh their various options.”
The closures will add to the number of FedEx facilities that have shuttered as a result of Network 2.0, a multiyear company initiative to merge its separate Express and Ground networks and cut overlapping facilities.
FedEx continues to see a 10% reduction in pickup and delivery costs in markets in which it has fully rolled out the program, FedEx President and CEO Raj Subramaniam said on a December earnings call.
Through Network 2.0, FedEx has "optimized 200 stations so far and including 130 in Canada," Subramaniam said. By the end of fiscal year 2025, the company plans to have 250 stations integrated in Network 2.0.
Rival UPS is overhauling its own operations under its "Network of the Future" program, which will result in roughly 200 U.S. facilities closing as it shifts volume to more automated hubs.
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