FedEx’s system is called a Vehicle Route Planner, or VRP, and it does more than just tell the drivers where to go for an address. As if the reindeer had a built-in GPS, it takes all the packages Dionise’s drivers load into their delivery vans in the morning and organizes them in a geographically logistical way to make their route as efficient as possible.
“Oh, heck yeah. [Santa] would like this,” Dionise said with a laugh one morning in October as his drivers were just finishing up loading their vans for the day’s deliveries — a day that essentially served as practice for the volumes they were about to start experiencing.
The VRP is helpful on a busy day during most of the year, when a driver of one of the distinctive white, FedEx Home Delivery vans with the green and purple lettering might have to deliver, say, 100 packages in a day.
But starting right after Thanksgiving, “peak,” as FedEx refers to the Christmas rush, arrives in a flourish for FedEx and other package delivery companies. It kicks in the week of Thanksgiving, jumps on Black Friday, surges on Cyber Monday, and hits the true peak on the second Monday in December, when we all seem to realize we’d better order that gift for little Timmy or Sue if we want it under the Christmas tree on time. By then, home deliveries can be more than double a typical day the rest of the year. For all of FedEx Corp.‘s various divisions, including the FedEx Express overnight letter delivery system most people are familiar with, that meant that last year’s peak day on the second Monday in December involved shipping about 17 million packages, compared to 9 million on a typical day in 2011.
For Dionise’s drivers, who cover most of Pittsburgh’s northern and western suburbs from Butler to Beaver and a bit into the South Hills, the 100 packages one driver might deliver on a non-peak day begins to build to 140, 160, then to more than 200 packages a day by the second Monday in December. That’s even though Dionise increases the normal 20 drivers he employs to 30 during peak; they all work an extra day which makes the 12 routes he owns shorter to make up for the growing volume. The entire Sewickley FedEx station on a recent day in October took in and delivered about 6,200 packages. That will jump to about 14,600 on Dec. 10 this year, Dionise said.
“Yeah, it can be stressful,” said Dionise, 37, who started as a seasonal, temporary driver himself six years ago before buying his first route five years ago. “But I tell my drivers, ‘If you can make it through Christmas time, the rest of the year will feel like a country club.’ ”
It makes you wonder if this is the kind of motivational speech Santa gives his elves every fall.
Dealing with the peak holiday rush has been part of FedEx Ground since it was Roadway Package Systems, or RPS, a company created and based in Moon in 1985 by Roadway Systems, an Akron-based company owned by Dan Sullivan.
The idea was to take advantage of the new barcode technology that Sullivan thought could help create a regional, lower-cost alternative to UPS, which dominated the private-sector ground delivery market then.
The idea worked so well that RPS grew to cover the entire country by 1996 and had become larger than its parent company. Four years later, FedEx CEO Fred Smith proposed merging FedEx with RPS to give FedEx its own ground delivery system. Sullivan agreed, and they kept the newly branded FedEx Ground based in Moon, as “one of Pittsburgh’s most notable home-grown success stories,” FedEx says, “with $9.5 billion in revenue, 50,000 employees [2,200 in western Pennsylvania], about 30,000 vehicles delivering packages out of 61 of its largest hubs, and 525 pickup and delivery stations across the country.”
The 5.6 million packages FedEx Ground delivers on an average day is three times the volume it had in 2000, and this past year’s $9.5 billion in revenue is four times what it was 12 years ago.
But all that growth hasn’t made dealing with peak any less challenging.
“Clearly it is an important part of our business,” said Patrick Fitzgerald, a spokesman for FedEx Ground. “We delivered 17 million packages on our busiest day last year. It was 15.6 million the year before, so that’s up 10 percent. So, peak is increasing in intensity, and increasing the challenge in engineering and logistics. It’s a challenge that forces us to begin to plan for peak starting Jan. 1.” The Peak Planning Team involves leaders from all segments of the company — in operations, sales, financial forecasts, facilities management, engineering.
“We have to deal with the physics of it,” Fitzgerald said. “How can you physically fit all of those packages in one place and get them to the next facility?” With the kind of growth FedEx Ground has experienced — much of it by taking market share from UPS or the U.S. Postal Service — the most obvious way is to expand.
That’s been the case at FedEx Ground’s station — one of its regular-sized pickup and delivery locations for its trucks — in Hunker, Westmoreland County, which serves much of Pittsburgh’s eastern suburbs. The station, right off an Interstate 70 exit, was built in 2006. But it was expanded last year, and they’re already talking about knocking out another wall, possibly next year, to add another van “line,” an area where 22 more delivery trucks could pick up packages to deliver to homes and businesses in the area.
“We’ve grown here to handle day-to-day deliveries,” said Steve Decker, FedEx’s senior manager at the site. “But peak is always part of the planning, too.” The large, warehouse-like facility already hums with activity nearly all day, five days a week. The 60 part-time package handlers handle the 3:30 a.m. and 5:30 p.m. “sorts” that organize all the packages coming in and out of the station and make sure they get where they’re going. The packages could be business-to-business deliveries that make up most of FedEx Ground’s typical business, or residential deliveries of FedEx Home Delivery, or the cheaper alternative of FedEx Smart Post, whereby packages are delivered to local USPS post offices, which then take them on to their final destination.
Decker, 29, who started out as a part-time package handler when he was in college studying criminal justice, said he’ll need to hire about 15 more package handlers to take care of the growing volume his station will see in the next few weeks, when it grows from about 13,000 packages to deliver to over 18,000. That kind of volume means that, starting Thanksgiving week, Decker will be working six days a week until Christmas Eve. “If I’m still smiling at Christmas,” he said, “it’ll be a good year.”
The holiday spirit
For FedEx Ground, which deals in business-to-business delivery, peak can actually start showing its head in late August.
“It will actually start sometime during the back-to-school surge in August, and build as stores are beginning to build inventory in the fall. By the time you hit Black Friday, it doesn’t stop until Dec. 25 for us — and then we breathe,” said Tom Hampe, manager of FedEx Ground’s Neville Island station.
It’s a larger version of the station in Hunker with about 200 total employees, compared to about 75 in Hunker, and it, too, has expanded recently and is already looking to add another line.
FedEx likes to talk about how its priority every day is to ensure every package, box or goods are delivered on time, safely and in good condition. But Hampe and others concede that the Christmas season can make employees feel like there’s something special about their job.
“We do talk about that all the time,” said Hampe, 47, who started out with RPS working on the truck docks 18 years ago. “Most of the time, 90 percent of the boxes look just like average boxes. But you don’t know what’s in them. At Christmas time, you have an idea.”
Back in Sewickley, Dionise said that even though he’s too busy to go Christmas shopping during peak — he plans way ahead these days — it’s easy to remember it’s the holidays.
“The atmosphere is completely different at Christmas. You can interact with the customers. Maybe they smile a little more when you bring them that package. I’ve had drivers realize when they’re delivering a bike at Christmas time to wait until the kids went inside so they didn’t see it. They know.”
For a job that is run by the clock year-round, and can be both physically and mentally taxing, knowing you’re helping put a gift under a child’s Christmas tree is rewarding — even if you’re just sort of filling in for Santa.
“Look, what we do isn’t earth shattering most of the time. It’s not brain surgery,” Dionise said. “But you do feel this time of year that you’re bringing people some joy.”