FedEx Ground to pay out $100m on van safety

FedEx Ground is expected to pay out more than $100 million to install safety cameras and sensors on its contractors’ vans. This is set to impact FedEx Corp’s profits.

The plans are to offer $1,500 per van to reimburse contractors for installing cameras and sensors that warn drivers of obstacles and other vehicles. FedEx Ground’s contractors operate around 72,000 vans.

The moves are intended “to reduce recurring accident maneuvers, especially manoeuvres that can lead to sideswipe, backing and turning accidents,” the documents said. “These technologies help mitigate risks associated with the combined forces of sharp increases in deliveries to residential neighbourhoods and the influx of drivers.”

“As e-commerce continues to drive substantial growth in our industry, the number of resources needed to meet this demand is increasing, which requires even greater focus on motor vehicle safety,” FedEx Corp stated.

The move is set to add to costs for wages and materials that are already hitting its bottom line as growth in package volumes slows after the double digit highs of the pandemic lockdowns. Daily package volumes are set to be only 6.2% up on last year in this quarter, down from 25% growth in the previous quarter.

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