How Does FedEx Network 2.0 Affect FedEx Ground Contractors?

Network 2.0 combines FedEx's Express and Ground pickup and delivery into one operation, market by market, and FedEx expects to finish the U.S. rollout by the end of 2027. For a contractor it can change four things: which packages your drivers carry, how many routes your area needs and which station they run from, the agreement you operate under, and, market by market, whether contractors or FedEx employee couriers do the work. FedEx uses both models and decides which one each market gets.

What FedEx has said about Network 2.0

• What it is. In its annual report for the year ended May 31, 2026, FedEx describes Network 2.0 as modernizing and consolidating its sortation facilities and equipment, reducing pickup-and-delivery routes, and optimizing its linehaul network.
• Where it stands. The same report says Network 2.0 was implemented at approximately 360 U.S. locations as of May 31, 2026. It was completed in Canada in 2025, and FedEx expects to complete the U.S. by the end of calendar 2027.
• Who does the work. "Service providers will handle the pickup and delivery of Federal Express packages in some locations while employee couriers will handle others," using what the report calls a market-by-market approach.
• One driver per route. FedEx's Network 2.0 page says it is "moving toward one driver on each route," and that the same driver might pick up and deliver all of a customer's packages.
• Stations. At its February 2026 Investor Day, as reported by Supply Chain Dive, FedEx said it expects to close more than 475 stations by the end of 2027, about 30% of its facility footprint, after more than 200 already closed. It said about 25% of eligible volume was flowing through Network 2.0 facilities, and expected 65% by the 2026 Peak.
• One company. On June 1, 2024, FedEx Ground was merged into Federal Express Corporation. Newer service provider agreements are with Federal Express Corporation.

What it can change for a contractor

• Who does the work in your market. In some markets contractors handle Express and Ground pickup and delivery together. In others, FedEx's own couriers do. FedEx doesn't publish which markets get which.
• What's on your trucks. In a 2024 version of the ISP Agreement filed with the SEC, the stop charge covers stops with a FedEx Ground package and FedEx Express deliveries to commercial locations. Express volume changes your stops, your packages per stop and when the day's deliveries have to be made.
• How many routes, and from where. Fewer pickup-and-delivery routes and consolidated stations can mean a different route count, a different station and a longer drive before the first stop.
• Your agreement. FedEx says its agreements typically run one to two years. FedEx's annual report lists maintaining or amending agreements with service providers among the risks of the transformation, and says its 2026 Network 2.0 costs included incentive payments to contracted service providers.
• Pickup times. FedEx's Network 2.0 page says consolidation of package pickups is in progress.

How to prepare, step by step

1. Ask your FedEx contact about your station. Whether it has converted, when it's scheduled to, and which model it will use.
2. Record your baseline now. At least 12 months of settlements: stops, packages and revenue per week, for every CSA. You can't judge an offer without knowing what you have today.
3. Read any new agreement or amendment closely. The service area in Schedule A, the rates in Schedule C, the Daily Stop Threshold in Schedule F, and how Express stops are paid. See questions to ask before signing.
4. Model the offer against your volumes. Work out what it pays at your current volume and at volumes above and below it, the same way you would evaluate a MESO offer.
5. Re-plan drivers and trucks. A different route count, station or package mix changes how many drivers and trucks you need, and which ones.
6. Ask about transition payments. FedEx reported incentive payments to service providers as part of Network 2.0. Find out what applies to you, in writing.
7. If you're buying or selling, put it in the diligence. A route's value depends on the agreement it runs under next. See the due diligence checklist.

A worked example: reading the change in your numbers

These are made-up numbers, chosen to show the comparison. They are not typical figures for any operation.

• Before: 20 routes, 3,000 stops a day, 150 stops per route.
• After the station converts: Express commercial deliveries join the work, and the area runs on 18 routes with 3,300 stops a day, about 183 stops per route.

Two questions decide whether that's good for you. Can a route really run 183 stops in a day with your drivers and trucks? And what do the new agreement's rates pay for those stops, compared with your baseline? You need both answers before you sign.

Common questions

What is FedEx Network 2.0?

FedEx's multi-year effort to combine its Express and Ground pickup, transport and delivery into one network: fewer facilities, fewer overlapping routes, and one driver handling a customer's packages.

Will FedEx replace contractors with employees?

FedEx says it uses both, market by market: service providers in some locations, employee couriers in others. It hasn't published which markets get which, so ask your FedEx contact about yours.

When will my station convert?

FedEx expects to finish the U.S. by the end of 2027. It doesn't publish a station-by-station schedule. Your FedEx contact is the place to ask.

Will I deliver FedEx Express packages?

In markets where contractors handle the combined work, yes. In the 2024 version of the ISP Agreement filed with the SEC, Express deliveries to commercial locations are paid the stop charge.

Does Network 2.0 affect what a route is worth?

It can. A buyer is paying for the agreement the operation runs under next, so the station's Network 2.0 status belongs in every buyer's questions and every seller's disclosures.

Your baseline, ready when the offer comes

Route Impact keeps your settlement history readable week by week: stops, packages and revenue for every CSA. That history is the baseline you compare a new offer against. If the change comes with a new offer, your AI contract analyst models its revenue across volume scenarios before you sign.