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FedEx Ground's RPS Roots Transformed Parcel Industry Forever

FedEx would rank as a distant third in the U.S. parcel market without its 1998 acquisition of RPS. The deal came as part of a $2.4 billion purchase of Caliber System. RPS, which launched in 1985, grew from a Northeast regional carrier to nationwide coverage within seven years under founder Dan Sullivan's leadership. The company pioneered the low-cost ground delivery model using independent contractors with their own vehicles—a blueprint later adopted by Amazon and startups including Better Trucks, Jitsu, and OnTrac. By 1996, RPS captured more than 15 percent market share and enabled FedEx to achieve nationwide reach. FedEx Ground now handles 13 million packages daily, up from RPS's 1.3 million daily parcels at acquisition. The rise of e-commerce shifted parcel markets from 80 percent B2B to 75 percent lightweight B2C shipments, cementing ground service's dominance over expensive express options.