FedEx Corp said on Wednesday it will consolidate its separate delivery companies into a single entity, in a move to slash costs and better compete with United Parcel Service and Amazon .
The decision to integrate FedEx Ground, its outsourced package delivery arm, with the FedEx Express overnight air delivery business was announced almost a year after activist investor D.E. Shaw pushed for change and won two additional board seats.
"We will be leaner, more agile and better positioned to execute on our mission to help customers compete and win with the world's smartest logistics network." FedEx Freight will continue to provide freight transportation services as a standalone company under the Federal Express Corp banner, the company added.'HYBRID' MODEL
Recent company changes have fueled concern among Ground contractors worried about their ongoing role at the company. Subramaniam said FedEx will use a "hybrid" employee and contractor model for deliveries. The CEO added that the company will remain non-union. Satish Jindel, who helped found the company that eventually became FedEx Ground, attended Wednesday's meeting and now leads consultancy ShipMatrix. He told Reuters it was an achievable goal that should boost profit and shares.
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