Shipping giant slashing nearly 500 locations

Fulfilling those deliveries, however, has been a situation for shipping companies, due to the fact that gross has not matched the summation successful shipments.

However, gross maturation hasn’t kept up with rising volume. "In 2024, full gross grew by conscionable 2.7%, from $197.9 cardinal successful 2023 to $203.2 cardinal — slower than the summation successful parcel volume," the survey showed.

Americans, myself included, present expect two-day, oregon adjacent faster, shipping astatine nary cost, which strains the economics of delivery. That has forced the nation's 2 largest carriers to marque monolithic cuts successful bid to little costs.

FedEx precocious shared its Network 2.0 program to streamline its operations successful bid to little its outgo connected each delivery.

"Network 2.0 is simply a years-long effort by FedEx to consolidate its historically abstracted Ground and Express operations. The inaugural has already led to the closure of much than 200 stations," Supply Chain Dive reported.

FedEx shared the 4 pillars of the program successful a presumption during its 2026 Investors Day.

• Grow successful High-Margin Verticals: The institution volition absorption its commercialized strategy connected premium B2B and specialized B2C segments wherever customers worth speed, precision, visibility, and reliability. Key people industries see wellness care, automotive, aerospace, information centers, and the premium extremity of e-commerce.

• Build connected Data & Technology Advantage: Leveraging the 2 petabytes of information processed regular and its unparallelled carnal network, FedEx volition standard its integer backbone, AI, and automation to heighten lawsuit value, amended web planning, and unlock caller gross streams.

• Transform the Network: FedEx volition proceed to modernize and optimize its integrated aerial and aboveground networks. This includes evolving its Tricolor aerial web strategy and advancing Network 2.0, some of which alteration flexibility, summation plus utilization, and trim structural costs portion improving the lawsuit experience.

• Deliver Ongoing Efficiency Gains: FedEx volition proceed to embed the One FedEx operating model, powered by the DRIVE process, to enactment durable worth instauration and enhanced profitability.

While FedEx highlights ratio gains, analysts caution that broader marketplace pressures whitethorn bounds pricing benefits for shippers. Some question whether Network 2.0 volition meaningfully easiness parcel pricing pressure, noting that freight headwinds and competitory complaint unit could headdress returns, according to Simply Wall St.

Additionally, autarkic experts enactment that rising parcel volumes outpacing gross growth, coupled with expanding costs for labour and energy, whitethorn yet propulsion shipping costs onto consumers, reinforcing the challenges facing the large carriers.

Some analysts question whether Network 2.0 volition meaningfully easiness pricing unit for shippers, noting mixed manufacture views connected its execution and the broader competitory environment. While immoderate spot ratio gains supporting margins, others judge freight headwinds and complaint absorption could headdress pricing powerfulness and returns, according to Simply Wall St.

These operational shifts, combined with broader marketplace pressures, are already driving important installation closures and workforce reductions astatine some FedEx and UPS, signaling that the changes whitethorn yet impact parcel pricing and work levels for consumers.

When you portion distant the selling language, Network 2.0 involves ample cuts to radical and facilities.

FedEx plans to adjacent much than 475 stations by the extremity of 2027 arsenic portion of its Network 2.0 plan, oregon astir 30% of its installation footprint, according to Scott Ray, the carrier’s COO-elect for U.S. and Canada aboveground operations.

These are changes forced by the competitory landscape.

"Carriers are progressively offering competitory pricing to pull customers, starring to little revenue," Freightwaves reported.

Carrier gross per parcel ticked down to $9.09, down from $9.10 successful 2023, according to Pitney Bowes.

UPS has been closing facilities and laying disconnected workers arsenic portion of its Network of the Future initiative. The institution shared details of the plan.

• Network Consolidation: The "Network of the Future" plan, announced successful 2024, targets closing astir 200 facilities by 2028, with 93 closed successful the archetypal 9 months of 2025 alone, Supply Chain Dive reported.

• Job Reductions: After slashing 48,000 jobs successful 2025, the institution plans to trim operations by up to different 30,000 positions and 25 cardinal operational hours successful 2026.

• Facility Closures: Numerous locations person closed oregon are slated to close, including centers successful Michigan, California, Kansas, Ohio, Indiana, Pennsylvania, and Texas.

• Automation Focus: The institution is focusing connected automating facilities to grip higher measurement much efficiently, alternatively than relying connected older, manual locations oregon smaller, little businesslike locations.
  Source: UPS

The institution expects the changes to amended its bottommost line.

"Over the adjacent 3 years, we program to marque bold moves to make a maturation flywheel successful premium markets, portion astatine the aforesaid clip thrust higher productivity and efficiency,” said UPS CEO Carol Tomé.

“The maturation and productivity initiatives we are executing volition effect successful higher revenue, expanded operating margins, and accrued escaped currency travel to present semipermanent worth to our shareowners.”

Rival autarkic carriers see OnTrac, Better Trucks, Jitsu, Veho, SpeedX, Speedy Delivery, and UniUni. Many are startups oregon supply determination work with little overhead than nationalist carriers.

"The U.S. Postal Service’s caller low-cost shipping option, Ground Advantage, has besides contributed to the pricing pressure," Freightwaves reported.

“Since Pitney Bowes began tracking shipments a decennary ago, the parcel marketplace has been dominated by FedEx, UPS, and USPS. We are witnessing a turning of the tide, evidenced by the astir 40% measurement maturation successful the five-year compound yearly maturation complaint of [alternative] carriers,” said Pitney Bowes Executive Vice President Shemin Nurmohamed.

“This disruption presents a unsocial accidental for businesses to instrumentality vantage of competitory pricing.”

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UPS has focused connected phasing retired its low-margin business, which has included dropping astir fractional of its measurement from Amazon.

“The statement with Amazon to trim volumes by much than 50% successful 18 months is simply a surprise,” Evercore ISI expert Jonathan Chappell said successful a enactment shared by the Denver Gazette, adding that UPS’ dependence connected emerging transportation rival Amazon was a semipermanent risk.

While FedEx and UPS are moving to little their costs, they're doing that to amended their bottommost line, not to little prices.

"Global proviso chains are entering 2026 facing heightened instability, arsenic procurement professionals pass that outgo volatility crossed logistics, energy, and captious inputs is becoming a imperishable diagnostic of planetary commercialized alternatively than a impermanent disruption," according to the latest CIPS (Chartered Institute of Procurement and Supply) Pulse Survey, conducted globally successful Q4 2025, SupplyChainBrain reported.

The Pulse Survey, released connected February 3, identified shipping and logistics arsenic the class astir apt to spot important terms increases, with 22% of respondents reporting outgo rises of implicit 10% by the extremity of 2025.

“Procurement professionals are often the archetypal to spot cracks forming successful the planetary trading system. What this survey showed astatine the extremity of 2025 and what January 2026 has already confirmed is that volatility is nary longer an exception. When logistics costs tin plaything by 20–30% successful weeks, those pressures inevitably ripple done to businesses and consumers alike," CIPS CEO Ben Farrell said.

Related: Costco softly changes its celebrated instrumentality policy

This communicative was primitively published by TheStreet connected Feb 15, 2026, wherever it archetypal appeared successful the Retail section. Add TheStreet arsenic a Preferred Source by clicking here.