FedEx Accelerates Network 2.0: Plans to Close Over 475 Stations by End of 2027

FedEx is pushing forward with its ambitious Network 2.0 transformation, a multiyear initiative to consolidate its historically separate Ground and Express operations into a more efficient, unified network. During the company's 2026 Investor Day presentation on February 13, Scott Ray—COO-elect for U.S. and Canada surface operations—revealed that FedEx expects to close over 475 stations by the end of 2027. This represents approximately 30% of the carrier's overall facility footprint in the U.S. and Canada.

The closures build on progress already made: more than 200 stations have been shuttered as part of the integration effort to date. The focus has shifted from smaller markets (where initial optimizations occurred) to larger metro areas, including San Francisco and other high-volume urban centers.

Progress and Scale of Network 2.0

Network 2.0 aims to streamline pickup, sorting, linehaul, and delivery by eliminating redundancies between Ground and Express networks—often described as moving toward "one neighborhood, one truck." Key metrics shared by Ray highlight the accelerating rollout:

• Currently, about 25% of FedEx's eligible average daily volume in the U.S. and Canada flows through more than 360 facilities optimized under Network 2.0.

• By the 2026 peak season (typically Q4 holiday period), the company expects this to rise to 65%, demonstrating rapid scaling of the consolidated model.

The overhaul is expected to deliver substantial structural cost savings—previously projected at up to $2 billion cumulatively by fiscal 2027—through improved asset utilization, reduced handoffs, and better route density.

Implications for Shippers and the Broader Supply Chain

While the closures are part of a cost-reduction and efficiency strategy, they carry important considerations for shippers:

• Service area changes — Closures in certain regions could alter pickup/drop-off locations, route patterns, and transit times. Shippers should map their key origins/destinations against upcoming changes.

• Capacity and reliability — Consolidating volume into fewer, higher-utilization facilities can improve sortation efficiency and reduce delays in optimized areas, but localized disruptions may occur during transitions.

• Last-mile dynamics — With FedEx focusing on denser networks, opportunities may arise for hybrid strategies combining FedEx with regional carriers or out-of-home solutions (e.g., lockers via recent partnerships like InPost in Europe).

• Cost impacts — Network efficiencies could support disciplined pricing and margin improvement for FedEx, potentially influencing contract rates and surcharge structures over time.

This comes amid a competitive parcel landscape where carriers continue optimizing post-pandemic networks—similar to UPS's ongoing adjustments—to handle steady e-commerce volumes with tighter cost controls.

Strategic Takeaways for Supply Chain Leaders

At Gain Consulting LLC, we see Network 2.0 as a clear signal of industry maturation: carriers are investing in leaner, more integrated operations to remain competitive. For clients, proactive steps include:

• Auditing current FedEx lanes and facilities for potential exposure to closures.

• Modeling alternative routing or multi-carrier strategies to maintain service levels.

• Monitoring peak-season progress in 2026 for real-world impacts on capacity and performance.

• Exploring complementary solutions (e.g., lockers, regional providers) to enhance last-mile resilience.

The full scope of closures and optimizations will unfold through 2027, but the direction is clear: a more consolidated, efficient FedEx network aimed at long-term value creation.

If your organization relies on FedEx for domestic or cross-border shipments, now is the time to assess exposure and plan contingencies. Contact Gain Consulting LLC today for a tailored review of how Network 2.0 could affect your logistics strategy.

Follow us on X @gainconsulting_ for ongoing updates on carrier transformations, freight trends, and supply chain optimization. For the original reporting, see Supply Chain Dive.