Contractors Not Surprised by FedEx’s Reduced Holiday Forecast

According to Reuters, FedEx shocked investors last week after they hinted towards a “further decline in the number of e-commerce packages it will handle in the year-end holiday season.”

However, many FedEx Ground delivery contractors saw this coming based on the low demand last year. 

15-year FedEx Ground delivery contractor, James Bush, said, “They’re just confirming what everybody probably already knew…They haven’t had accurate projections.”

Planning for the Christmas shipping season is underway, and it is vital for FedEx to know if they will need to alter their expectations for contractors, reported Reuters. Right now, FedEx Ground’s forecast is lower volume, reflecting customers’ plans to ship fewer holiday packages. 

FedEx said in a statement that “the updated holiday forecast will help ensure that contractors have appropriate resources for the peak delivery season while minimizing preparation costs.”

The shipping company is trying to prevent last year’s issues from repeating themselves.

Their “overly bullish” forecast resulted in many contractors without work as they “geared up with trucks and employees for a surge that failed to materialize.” 

FedEx’s future still seems to be uncertain as they blame an unexpected downturn in business at the end of August for the delayed forecast.  

As for the displeasure expressed by contractors, FedEx Chief Executive, Raj Subramniam, assured analysts that “96% of Ground’s contractors had signed 2022’s peak season contract” and dismissed contractor discontent as “much more of a perception issue than reality.”

Black Friday is looming, and contractors still have not received any new updates or guidance from FedEx Ground.