FedEx Plans to Close over 475 Stations Due to Network 2.0

Why It Matters

The overhaul promises significant cost efficiencies while preserving service reliability, reshaping the competitive dynamics of U.S. parcel logistics.

Key Takeaways

• Closing 475 stations cuts 30% of footprint
• Network 2.0 targets metro hubs like San Francisco
• Projected $2 billion savings by 2027
• Optimized facilities will handle 65% peak volume
• 10% pickup‑delivery cost drop already realized

Pulse Analysis

FedEx’s Network 2.0 marks a strategic pivot toward a unified ground‑express model, aiming to eliminate redundant trucks and facilities in overlapping neighborhoods. By consolidating more than 475 stations, the carrier trims its real‑estate footprint while concentrating resources in high‑density metros such as San Francisco, Los Angeles, and New York. This geographic focus aligns with broader industry trends where parcel volumes are increasingly urban‑centric, allowing FedEx to capture economies of scale and improve route density.

Cost efficiency sits at the heart of the initiative. Management forecasts $2 billion in savings by the close of 2027, driven by a 10% reduction in pickup and delivery expenses already observed in early rollout markets. The shift also boosts asset utilization; by the 2026 peak season, 65% of eligible daily volume will travel through facilities optimized for Network 2.0, up from 25% today. These improvements enhance margin resilience amid volatile fuel prices and intensifying competition from rivals like UPS and Amazon Logistics.

Technology underpins the transformation, with real‑time visibility tools and predictive analytics enabling dynamic load balancing and proactive rerouting. Field managers can monitor lane load factors, weather impacts, and congestion, allowing the network to adapt before delays affect customers. This data‑driven agility not only safeguards service levels during the consolidation but also positions FedEx to meet evolving e‑commerce demands, reinforcing its role as a critical infrastructure provider in the U.S. logistics ecosystem.

FedEx plans to close over 475 stations due to Network 2.0

By Max Garland · Published Feb. 13, 2026

A FedEx truck parked in a lot near a FedEx facility on Dec. 21, 2022, in Houston. The company is looking to maintain service reliability as it overhauls its network in the U.S. and Canada, in part by establishing high‑priority routes. (Brandon Bell/Getty Images)

Dive Brief

• FedEx is expected to close over 475 stations by the end of 2027 due to its Network 2.0 overhaul plan, about 30 % of its facility footprint, according to Scott Ray, the carrier’s COO‑elect for U.S. and Canada surface operations.

• Network 2.0 is a years‑long effort by FedEx to consolidate its historically separate Ground and Express operations. The initiative has already led to the closure of more than 200 stations, Ray said during a 2026 Investor Day presentation. The initial integration efforts in the U.S. have been focused on smaller markets, but FedEx is now pushing to optimize large metro areas like San Francisco.

• About 25 % of FedEx’s eligible average daily volume in the U.S. and Canada is currently flowing through more than 360 facilities “optimized” for Network 2.0, according to Ray. By the 2026 peak season, the carrier expects that figure will rise to 65 % as the integration continues to scale.

Dive Insight

FedEx expects major cost reductions as its network overhaul gains steam — by the end of 2027, the carrier anticipates $2 billion in savings. Network 2.0 has already produced a 10 % reduction in pickup and delivery costs in markets where it’s been rolled out, thanks to the elimination of overlapping routes.

“The concept is pretty straightforward: Our customers don’t need both an Express and a Ground truck in the same neighborhood on the same day, and they don’t need to separate their Express and Ground packages for two separate pickups,” Ray said.

FedEx is maintaining high service levels despite the overhaul, according to Ray. The company has done this in part by establishing dedicated routes for high‑priority services and customers and factoring in market‑level characteristics.

“One size certainly does not fit all markets,” Ray said. “This type of agility has been key during both planning and implementation, given the high operational complexity of an integration of this magnitude.”

FedEx is also leaning on technology to maintain delivery reliability amid the transformation plan. The company’s real‑time package visibility tool is now available to all field‑management employees, helping improve forecasting and planning. Additionally, FedEx operations leaders, dispatch teams and line‑haul planners can now see real‑time load factors by lane and facility, along with weather impacts and congestion.

“Predictive analytics flag potential issues, and our tools suggest reroutes before delays become customer problems,” Ray said. “For example, when severe weather hits, or there’s an unplanned disruption, we can increasingly rebalance volume across routes and assets, rather than reacting after the fact.”

Source: FedEx Network 2.0 – Tracking closures, layoffs across the US