By Thomas Gryta
Lorraine Williams drove 45 minutes to Atlanta's airport on the
night of Feb. 22 and paid $136 to FedEx Corp. to make sure her
package would get to New Orleans in two days. The package has yet
FedEx is struggling with significant delays in delivering
packages long after mid-February winter storms sent many parts of
the country into a deep freeze, including the delivery company's
Memphis, Tenn., hub. Last week, about one- quarter of FedEx Express
shipments didn't arrive on time, according to ShipMatrix, which
tracks the industry.
FedEx said it has been adding shifts and staff to catch up with
the backlog and expects service levels to return to normal by the
end of the week. "We are working as quickly as possible to deliver
customer packages that have been delayed by this national service
disruption," a spokeswoman said. "We deeply regret the impact this
has had on our customers, and we are working with them to resolve
any delivery issues."
FedEx and United Parcel Service Inc. are coming off a year in
which they handled a record number of U.S. packages, as millions of
people stayed in their homes and turned to e-commerce during the
coronavirus pandemic. Both companies imposed peak surcharges and
enforced limits on shippers to manage the volume. The rivals are
also helping distribute Covid-19 vaccines across the country.
Memphis is the primary air hub in FedEx's hub-and-spoke express
network, sorting millions of packages from dozens of cargo planes
each day. The company said large amounts of snow and ice hit the
city and storms disrupted operations at other large locations,
including North Texas and Indianapolis. Ice and snow prompted UPS
to briefly shut its main air hub in Louisville, Ky., for the first
time on Feb. 15.
FedEx said more than 200 employees, including salaried workers,
signed up to help clear some of the backlogged packages on Sunday,
The delays have affected medical supplies and Covid-19 testing
samples that are often routed through FedEx's overnight
Aegis Sciences Corp., a provider of Covid-19 testing services,
said it had experienced some delays because of FedEx's service
backlog. "We continue to report Covid-19 testing results within 10
hours of receipt," said Dr. Frank Basile, chief executive of
The company, based in Nashville, Tenn., said it continues to use
FedEx but has diverted some volume to other carriers to maximize
delivery speeds. "We will make decisions on whether we retain,
expand or reduce that over the coming weeks," Aegis said.
Last week, Feb. 21 to Feb. 27, FedEx Express had on-time
delivery of about 76%, an improvement from the prior week, while
UPS Express was at 96%, according to ShipMatrix, a software
provider that analyzes shipping data. The FedEx Ground service,
which handles many e-commerce orders, was less disrupted.
Satish Jindel, president of ShipMatrix, said some of the
difference is FedEx's greater reliance on airplanes compared with
UPS, which mixes its express packages with its ground delivery
network. "When you get backed up, it takes a while to catch up," he
said, referring to backlogs in general. "While you are trying to
dig out, the new packages keep coming."
Some consumers like Ms. Williams said they were surprised to
discover the delays after FedEx accepted the package and charged
for expedited delivery. "FedEx has sophisticated technology," Ms.
Williams said. "I should have been told that FedEx might have
Her package, a Louis Vuitton handbag, was a birthday gift for a
grieving friend. The amount she paid for shipping and insurance was
based on the package reaching its destination in two days, but she
was told that no refunds would be issued. A FedEx spokeswoman said
the company's money-back guarantee is currently suspended.
Social media is full of angry FedEx customers looking for their
shipments from all over the world. A March 2 company post on
FedEx's Facebook page about Women's History Month is packed with
comments from customers looking for packages. So is a March 3
Facebook post about the company's pledge to buy electric vehicles
and be carbon neutral by 2040.
Keri Svendsen, a graduate student in Springfield, Mass., has
been waiting since last week for medication, but tracking
information shows it sitting in Memphis since last Thursday. FedEx
told her that it opened a case for her and would track down the
package. On Wednesday, FedEx declared the package is lost, she
While FedEx is working to fix the problems, Wall Street is
expecting some impact from the storms when the company discloses
its third-quarter financial results on March 18. UBS analyst Thomas
Wadewitz lowered his third-quarter earnings projection to $2.90 a
share from $3.13 a share to reflect an expected $80 million
reduction in pretax profit.
"FedEx has faced a meaningful headwind from the impact of severe
winter storms in mid February," he wrote in a note to clients.
Customers just want to see the FedEx truck arrive at their door.
David Lavelle, a retiree in Venice, Fla., has been looking for his
$3,000 custom-built guitar from Japan since Feb. 22.
On the day of its expected arrival, he stayed home to sign for
the package. Instead, he got a message saying it was delayed. Since
then, he said he has watched it get transferred multiple times
between Memphis and Indianapolis, but not yet to his doorstep.
"I have no idea where it has been or where it is now," Mr.
Write to Thomas Gryta at email@example.com
(END) Dow Jones Newswires
March 03, 2021 14:22 ET (19:22 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.