FedEx unit rolls out flat-rate shipping option in U.S.

The phrase "if it fits, it ships" now has a Tennessee twang.

FedEx Express, the largest unit of Memphis, Tenn.-based FedEx Corp., introduced on Monday a service providing its U.S. customers with what the company called a "simple, predictable, flat rate" shipping option for express packages.

Under the service, called "FedEx One Rate," a customer selects an eligible domestic shipping service, the destination, and the type of packaging. The price is then calculated based on the packaging type (but not its weight), service selected, and distance.

Although FedEx won't publicly acknowledge it, the service appears to mimic the characteristics of the U.S. Postal Service's "Priority Mail" offering, where a shipment is assessed a single rate regardless of its destination or how much is stuffed in the packaging. Several years ago, the U.S. Postal Service (USPS) coined the phrase "If it fits, it ships" to describe the service.

"I have not seen the rates yet or the discounting schemes, but it's an obvious attempt to thwart the effect of the changes the USPS has put in," Jerry Hempstead, a long-time parcel executive who runs an Orlando, Fla.-based consultancy bearing his name, said in reference to the FedEx service.

Priority Mail over the summer underwent its most dramatic operational makeover in about 30 years. The changes included next-day delivery in short-haul markets, free tracking, and free insurance up to a certain per-package dollar value. Historically, Priority Mail deliveries have been made in a two- to three-day window.

HOLIDAY VOLUMES
Separately, FedEx announced today that it expects to see its busiest day in company history when it moves more than 22 million shipments around the world on Dec. 2, popularly known as "Cyber Monday." The estimated volumes would represent an 11-percent year-over-year increase, FedEx said.

During its busiest week of the year, Dec. 1 through 7, FedEx expects more than 85 million shipments to move through its global networks, a 13-percent increase over last year's busiest week. A large portion of those volumes will come from e-commerce transactions funneled through the company's delivery networks.

Archrival UPS Inc. is likely to discuss upcoming holiday-season volumes tomorrow when the Atlanta-based giant releases third-quarter results.