Last week, the company announced plans to consolidate its FedEx Express and FedEx Ground units, a watershed development for a company whose primary business units had always remained siloed. (FedEx Freight will remain separate from the new entity.) The new brand? Federal Express Corp.
The consolidation is part of a broader plan called Network 2.0, which is designed to save the company $2 billion through fiscal year 2027. (Fiscal 2024 begins June 1, 2023.) As part of the cost-cutting framework, FedEx has rolled out an ambitious program called Drive, which the company said will save it $4 billion through the end of fiscal 2025.
“The future of Drive will likely mirror the transformation that UPS (NYSE: UPS) went through in 2021, which means FedEx will be placing even more focus on customer profitability and cost containment,” said Branden Burt, director of parcel operations for consultancy TransImpact LLC.