The Demand is so Massive that FedEx Decided to Cut Off Some Customers


Even long before, shipping and delivery were already one of the most popular methods of giving and taking goods and items. However, the rise of the pandemic has brought a massive surge in the volume of shipments. If we think about it, it kind of makes sense because the pandemic has also brought the rise of remote or hybrid work. Hence, people working at home are more comfortable and have more access to their gadgets during their breaks and free. Various people ship items every day. We can say that people who love to shop online massively contribute to the volume of deliveries that some companies need to do. Some of the most famous companies that offer delivery services include UPS and our main topic today, FedEx.

FedEx Corporation

FedEx Corporation is a multinational company giant in America focused on delivery services. Its headquarters’ location is in Memphis, Tennessee. Its name used to be Federal Express Corporation, and later on, it became FDX Corporation. However, it is more known as “FedEx,” a syllabic abbreviation for the term Federal Express. This name is what people used to call FedEx back in 1973 up until 2000.

Today, when people think about air delivery and shipment, they would at least have two names in mind, and it includes FedEx and its head-to-head competitor — UPS. FedEx’s air shipment is also known as FedEx Express. It is a major shipping company that spearheaded overnight deliveries, which is their flagship service. As a company giant, they were able to offer more services like FedEx ground, FedEx office, which was formerly known as Kinko’s, FedEx supply chain, FedEx freight, and many more. These services are also measures to keep up the competition with their competitor, UPS.

FedEx is also a crucial contractor for the US government because it helps transport some US Postal Service packages by FedEx smart post.

The company giant made a decision.

The pandemic gave FedEx a highly overwhelming amount of customers. And when we say highly overwhelming, we are saying that it could not even accommodate everybody that it needs to cut services to some customers. Furthermore, that is more or less 1,400 FedEx’s less-than-truckload customers. So, why did they need to cut if customers bring revenue to the company?

While that fact is true, it is also true that the massive demand causes extreme terminal bottlenecks and delivery delays. Back in 2019, FedEx already made capacity investments, but they still fell short because of the pandemic. FreightWaves made action last Monday. It told manufacturers, retailers, and customers that it could not accommodate anybody and it will not pick up goods anymore. The report was so sudden that it left customers hanging. They did even have time to look for other alternatives.

What will happen now?

It’s only normal for people to feel angry and frustrated for what happened, but situations like pandemics are also sudden and unpredictable. Will this benefit their competitors, such as UPS? Will this risk FedEx’s future sales? These are all possible, but the company can only do so much. They also did not think for a second that a pandemic will get this bad.