LOS ANGELES (Reuters) – FedEx Corp said it plans to hire about 700 flexible, part-time Express drivers in 160 US residential and rural markets as customer-turned-competitor Amazon.com Inc puts pressure on established delivery firms.
FedEx, like global rival United Parcel Service Inc, is investing billions of dollars to cope with the boom in low-margin residential deliveries, which account for just over half of total package volume versus 20 percent in 2000.
Taking small numbers of packages the “last mile” to shoppers’ doorsteps and far-flung homes is more costly than delivering scads of envelopes and packages to office buildings – the latter of which has been the Memphis-based company’s bread and butter.
A typical residential delivery costs FedEx and UPS $1.60 more than a commercial delivery. They have surcharges to help cover the extra expense, but retailers are pushing back as they work to lower the cost of ever-faster – and still free – shipping, said Satish Jindel, founder of ShipMatrix.
The lower-cost, part-time drivers will use company vehicles, receive no benefits, work no more than four weekly shifts, and be paid $17.10 per hour in most markets – including Paducah, Kentucky; Roswell, New Mexico; and Jacksonville, Florida. Pay was highest, $19.66 per hour, in Kodiak, Alaska, according to a Reuters review of help wanted ads targeting 139 small to midsize cities in 31 states.
FedEx declined to give details on pay for the new employees or existing Express drivers.
FedEx and UPS traditionally have offered some of the industry’s most desirable jobs.
FedEx Express employs more than 40,000 US couriers. One person familiar with the hiring push said Express’ non-union drivers make about $24 per hour and receive full benefits. Glassdoor.com put the average hourly pay at $18-$32.
UPS’ unionized drivers make $20.50-$37.45, and the average total compensation for UPS small package drivers is $145,000 a year, a spokesman said.
FedEx said the part-time job category creates a group of flexible employees to supplement its existing workforce.
“This will allow us to handle fluctuations in volume by day of the week or hour of the day,” FedEx said in an email.