FedEx Ground is a shipping company headquartered in Moon Township, Pennsylvania, a suburb of Pittsburgh. Originally conceived as a lower cost competitor to UPS, Roadway Package System (RPS), was created to take advantage of new bar code, material handling and computer technologies. After taking the road for the first time on March 11, 1985, the company grew in size and popularity expanding service from its initial coverage of the Mid-Atlantic states, so much so that it eventually became the largest subsidiary of its parent company, Akron-based Roadway Services. By 1996, RPS had achieved 100% coverage of the United States and Canada. In addition, Roadway Services had been reformed as a new holding company called Caliber System, Inc.
In 1997, Fred Smith, founder of FedEx, contacted Dan Sullivan, co-founder of RPS and now president of Caliber Systems, Inc. about merging the two companies. In 2000, FedEx, merged the Caliber System, Inc. operating companies into the FedEx organization with Robert's Express becoming FedEx Custom Critical and RPS becoming FedEx Ground. Viking Freight which initially operated under its original name was re-branded FedEx Freight in 2001.
FedEx Ground now provides 1-5 day delivery of small packages to all 50 states, plus Canada and Puerto Rico. The subsidiary also offers a specialty service known as FedEx Home Delivery. The only service of its kind dedicated to residential customers, FedEx Home Delivery serves 100 percent of the U.S. population.
FedEx purchased the parcel consolidator Parcel Direct in September 2004 from Quad Graphics. This FedEx Ground subsidiary was re-branded as FedEx SmartPost in October 2004. FedEx SmartPost caters to the shipment of high volume, low-weight packages to residential addresses, by outsourcing the "last mile" to the US Postal Service. FedEx SmartPost collects all packages from the shipper, then sorts, ships and tracks the packages through their regular network and systems until the package reaches the US Post Office closest to the recipient. It is then delivered to the final destination by the USPS. FedEx's large volume of shipments allows them to utilize postal bulk discounts, and eliminate the costs of having their own trucks trek across less profitable residential routes. The resulting service is one that is less expensive than FedEx ground, but more expensive than regular mail, and ostensibly faster and more secure, since it allows the use of FedEx tracking.