FedEx closes more U.S. locations as it changes how packages move

Aparajita Chatterjee

Sat, August 15, 2026 at 7:03 PM GMT+3 8 min read

FDX -1.39%

For decades, FedEx built out one of the country's largest delivery networks as Americans sent and ordered more packages.

Now the delivery giant is rebuilding parts of that network from the inside out.

Facilities that once operated separately are being combined, routes have been redesigned, and some local stations are disappearing.

All this is happening as FedEx tries to move more packages through a smaller and more efficient network.

That transformation is increasingly evident in communities and even more so in FedEx's workforce.

The latest shutdowns are in Missouri and California, where five facilities are set to permanently close, affecting 316 workers, according to Worker Adjustment and Retraining Notification (WARN) filings reviewed by TheStreet.

These closures are part of a much larger overhaul underway across the company.

A review by TheStreet of available state WARN filings, workforce records, and previously reported actions identified at least 762 workers affected across 16 FedEx locations or workforce actions in seven states so far in 2026.

Behind these changes is FedEx's multiyear effort to combine historically separate parts of its Express and Ground operations, which it named Network 2.0.

The aim is to eliminate overlapping facilities and routes, so that it can push more packages through a denser delivery network.

And what began several years ago as a corporate efficiency strategy is now reaching individual FedEx stations and workers across the country.

FedEx permanently closes more local facilities

Two of FedEx's newest closures are in Missouri.

FedEx will permanently close its facility at 13342 Lake Front Drive in Earth City on Sept. 28, affecting approximately 75 full-time employees, according to a WARN notice obtained by TheStreet.

More Layoffs:

FedEx told Missouri officials that the closure is related to Network 2.0 and described the move as a business reorganization.

However, the affected employees can consider transfers to other FedEx locations, severance, or a leave of absence while they pursue another position within the company.

A second facility at 3025 S. Hanley Road in St. Louis will permanently close on the same day, affecting another 68 full-time employees.

Together, the two Missouri closures affect 143 workers.

Around the same time, another 173 workers will be affected across three California facilities.

The Palm Springs operation at 111 Bird Center Drive will close on Sept. 29, eliminating 62 positions.
The Victorville facility at 12212 Industrial Blvd. will close on Sept. 28, affecting 54 workers.
A closure in San Diego will affect 57 employees on Aug. 31.

The five actions in California and Missouri offer a local view of a transformation taking place across a much larger FedEx network.

FedEx closes more locations under its Network 2.0 overhaul.Artistic Operations / Getty Images

Why FedEx is shrinking its delivery network

FedEx began laying the groundwork for the transformation in 2022 to improve efficiency and reduce structural costs.

For years, major portions of FedEx Express and FedEx Ground operated through separate networks. Express was built primarily for time-sensitive shipments, while Ground developed a separate system for less time-sensitive packages.

This meant different facilities, routes, and vehicles could serve the same markets.

Network 2.0 was designed to remove some of that duplication.

In 2023, FedEx announced plans to consolidate FedEx Express, FedEx Ground, and FedEx Services under Federal Express Corporation as part of its push toward a more integrated air-ground network.

This Network 2.0, the company said, is expected to generate an additional $2 billion in savings in fiscal 2027.

The business model would also look different for many.

In some areas, contracted service providers will handle both Ground and Express packages. Elsewhere, FedEx employee couriers will handle pickup and delivery depending on volume, demand, and the company's existing footprint.

Three years into the rollout, those changes are increasingly visible.

Nearly 490 FedEx stations have been optimized

FedEx's latest earnings call showed how Network 2.0 has progressed.

CEO Raj Subramaniam said that by the end of June, about 45% of eligible package volume would flow through nearly 490 Network 2.0-optimized stations.

FedEx expects that share to reach about 65% before peak season, with implementation to temporarily pause before resuming in early 2027.

The company remains on track for its savings estimate.

"We remain on track to achieve nearly $1 billion of Network 2.0 and associated one FedEx savings by the end of this calendar year, and the full $2 billion by the end of CY 2027," said Subramaniam.

But the overhaul is happening while the overall parcel market is still growing.

Americans are shipping more packages, but the market is changing

U.S. parcel volume reached 23.1 billion shipments in 2025, up 3.3% from the previous year, according to the Pitney Bowes Parcel Shipping Index.

Revenue grew even faster, rising 6.2%, as carriers increasingly prioritized profitability over package volume.

Pitney Bowes expects U.S. parcel volumes to continue growing over the coming years.

This is where FedEx comes in.

The company is not just preparing for fewer packages. It is trying to determine which packages it wants moving through its network and how much infrastructure it needs to deliver them profitably.

Chief Customer Officer Brie Carere told investors in June that FedEx is concentrating on premium business-to-business services and higher-value business-to-consumer shipments.

Ground Economy volume fell about 5% in the fourth quarter, and FedEx expects that decline to continue through the rest of 2026.

At the same time, U.S. domestic package volume increased 3%.

Federal Express package yield increased by 11% in the quarter, with management citing higher base rates, a more favorable mix, and fuel surcharges.

In other words, FedEx is trying to run a denser network with fewer overlapping assets while directing more of its capacity toward shipments that yield higher returns.

And it is not alone in reconsidering the race for package volume.

Amazon is changing who FedEx competes with

The competitive landscape around FedEx has also changed.

Amazon spent years building warehouses, aircraft capacity, and last-mile delivery infrastructure primarily to support its own retail operation.

It is now turning those assets into commercial services.

In May, Amazon launched Amazon Supply Chain Services, making its logistics infrastructure available to companies even if they do not sell products through Amazon's marketplace.

It pushes Amazon beyond retail and into areas long served by logistics companies, including FedEx and UPS.

Amazon CEO Andy Jassy compared the strategy to its earlier decision to turn its internal computing infrastructure into Amazon Web Services.

In June, Amazon launched a less-than-truckload freight service for U.S. businesses, enabling customers to ship goods to warehouses, distribution centers, retail partners, and other commercial locations.

The move takes Amazon further into the freight market, historically associated with FedEx.

Its parcel-delivery ambitions are becoming more direct as well.

In July, Amazon Shipping was courting corporate shippers with simplified pricing and waived residential surcharges, with rates in some cases running as much as 30% below comparable FedEx and UPS pricing, according to industry reporting cited by TheStreet.

According to Pitney Bowes' data, Amazon Logistics handled 6.9 billion U.S. parcels in 2025, up 9% from a year earlier, making it the country's largest parcel-delivery provider by volume.

This puts more pressure on the traditional national carriers to decide which portions of the market they want to defend.

UPS is also shrinking its network

In 2026, UPS plans to eliminate roughly 30,000 operational positions as it deliberately reduces the amount of Amazon volume moving through its network.

Amazon had been UPS's largest customer but not its most profitable, leading UPS to scale back the relationship and adjust its workforce and physical network as volume disappeared.

TheStreet previously reported that the 2026 cuts followed an earlier restructuring in which UPS reduced jobs and operational capacity as part of what the company calls its Amazon "glide-down."

FedEx's catalyst is different.

Its overhaul centers on combining delivery networks that historically operated separately and eliminating overlap, while UPS is resizing parts of its operations in response to the deliberate loss of lower-margin Amazon business.

Amazon, meanwhile, is increasingly selling businesses access to the logistics infrastructure it originally built for itself.

Together, the changes point to a broader reset in the delivery business: The largest carriers are increasingly focused not simply on moving more packages, but on deciding which packages and which parts of their networks are worth operating.

TheStreet tracks at least 762 affected FedEx workers

The local employment impact of FedEx's restructuring is difficult to measure nationally because facility closures and layoffs are reported by the state and do not always trigger WARN notices.

TheStreet reviewed available state employment records and identified the following FedEx workforce actions so far in 2026.

The New York total includes six permanent facility closures affecting 164 workers, as well as an earlier layoff of 43 workers at a separate Albany-region operation.

FedEx attributed that closure to Network 2.0 and offered affected workers the option to consider transfers, severance, or leave while seeking other FedEx positions.

TheStreet's tally is not a comprehensive count of all FedEx closures or layoffs nationwide, since publicly available worker counts could not be identified for every FedEx station that has closed or is scheduled to close.

This story was originally published by TheStreet on Aug 15, 2026, where it first appeared in the Employment section. Add TheStreet as a Preferred Source by clicking here.