FedEx is preparing for a moderate peak season in terms of demand and has the space to onboard new customers during the holidays, according to Brie Carere, the company’s executive vice president and chief customer officer.
"I would not anticipate growth year over year from a peak perspective," Carere said of demand in an interview with sister publication Supply Chain Dive.
FedEx and rival UPS are grappling with lower volumes this year as the pandemic-fueled home delivery boom cools off and their customers navigate high inflation. FedEx Ground already told its contractors that it expects to lower its peak season volume forecasts, and experts are predicting an easier peak season versus 2020 and 2021.
Last year the company announced it expected to hire 90,000 people ahead of the holidays, but this year FedEx skipped its traditional hiring announcement.
Carere did not provide a specific number for 2022 peak season hiring plans but said the company will hire fewer seasonal employees this year. "We are really really working hard to flex all of our operations and also make sure that we give hours to our existing team members wherever possible," she said.
Carere said she thinks consumers will shop later in the holiday season this year to take advantage of sales amid inflationary pressures, falling in line with UPS' expectations. This means offering fast delivery times for last-minute gifts will be of heightened importance.
But shippers are balancing consumer expectations with inflation's effects on their own operations. The slower, or deferred, delivery services FedEx offers are already seeing more interest as a result, Carere said.
"FedEx Ground Economy has a slower speed and it is a lower price point, and I think that's attractive to some customers right now who are also trying to find cost savings," she said.
Customers can also save on pickup fees by dropping off packages at retail locations offering FedEx pickup and delivery services, Carere noted. The company estimates 93% of the U.S. population lives within five miles of a staffed retail location.
FedEx will continue to onboard new customers during the peak season because the company has "a little flex in the network" and is confident in its service levels, according to Carere. The available capacity stands in contrast to the extremely limited carrier space that shippers faced last year.
"We're going to continue to onboard new customers and set them up for success in January [and] beyond, which I think is also a really, really interesting opportunity because of course we will have continuity right through next year," Carere said. "And we're reminding the market that we don't have any major labor negotiations to deal with."
The Teamsters' national master agreement with UPS runs through July 31, 2023. Its package division represents various UPS employees, including company package car drivers. The contract with UPS is the largest private collective bargaining agreement in North America, according to the Teamsters' website.
"The only read-through to the upcoming Teamster contract negotiation would be…we have got a great relationship with our employees, and these are great jobs," UPS CEO Carol Tomé said in an earnings call last week.
FedEx isn't free from contract negotiations, however.
FedEx Express and its pilots union announced earlier this month that they requested a federal mediator to help them reach a new agreement as disputes over pay and retirement benefits linger. The pilots' current contract became amenable in November 2021. FedEx has stressed that the move won't impact its operations or service.