(Reuters) – FedEx Corp (NYSE:FDX) announced on Thursday that it will discontinue Sunday deliveries in some rural, low-density U.S. markets beginning August 15.
The U.S. delivery giant said that the change would make its ground unit more efficient. The Ground unit handles most of the company’s e-commerce home deliveries and reaches nearly 80% of the U.S. population on Sundays.
In an email to Reuters, the company said that FedEx is making changes to its delivery network based on market conditions and customer needs. After the COVID-19 pandemic hit in early 2020, the company started delivering on Sundays to meet the sudden rise in demand.
“We sped up the process of getting Sunday home delivery to almost 95 percent of the U.S. population. “As the economy has changed, we are making changes to our operations to stop delivering on Sundays,” it said.
Fedex didn’t say how the new policy would affect each market in particular.
The company made this decision because there is a higher demand for cooling and its ground unit contractors want more money to cover their rising costs.
Earlier this month, at least two brokerage firms lowered their target prices for FedEx’s stock.
