FedEx is launching a new late-night shipping option that will allow retailers to deliver next day — that is, when items are purchased online as late as midnight.
As Amazon looks to expand its own delivery options, package couriers are looking for new ways to compete. However, FedEx EVP and Chief Marketing and Communications Officer Brie Carere revealed that less than 1.3 percent of the company's total revenue comes from the eCommerce giant, and it doesn't expect that figure to increase.
“We are not dependent on Amazon for growth,” Carere said, according to Bloomberg. “We’re very optimistic and very, very confident in the growth of the market outside of Amazon.”
Online sales currently comprise about 15 percent of U.S. retail, growing at three times the pace of brick-and-mortar stores. Carere added that about half of online purchases are completed after 4:00 p.m.
The service offers for packages to be picked up as late as 2:00 a.m. from retail stores and brought to a delivery hub. Packages can be delivered as soon as the next day within the local market, and within two days for elsewhere in the U.S. FedEx tested the service in Los Angeles and Dallas in late 2017, and it is now available in 100 markets, without the need for additional investment or new routes.
“We’ve really seen a change in the market, where retailers have recognized that their physical distribution is a competitive advantage, and it allows them to actually get things faster to market,” noted Carere. “This is from point of fulfillment to delivery, all within a 24-hour cycle. That’s very, very competitive.”
So far, retailers using the program have been able to offer overnight deliveries without charging a subscription or annual membership fee.
“We think this is really the tipping point,” Carere said. “We think big retailers are really leaning into this, and it’s going to provide great differentiation for them.”