You're right, there is no difference if you just look at the physical aspect of picking up and dropping off. The difference that looms over FedEx is the regulatory and law. FedEx needs the control that they can wield over employees. They aren't sure they can wield that kind of power over contractors.
Right now, if they wanted to make the commit time for all P1 0900, it just takes a memo, reprogramming, and manpower allocation to make it happen. With a contractor workforce, depending on how they write the contracts, it may take months to a year to fully implement it.
Additionally.... its also PR. Imagine the headlines that would roll thru the newspapers "FedEx Express lays off all employees and outsources to contractors". UPS would be quick to exclaim loud and proud "WE ARE A 100% EMPLOYEE COMPANY! TRUST US, NOT SOME SUBCONTRACTED IDIOT"
You get better PR saying "we're bringing everything in-house" vs "We're outsourcing everything to contractors".
Here's alternate headlines from the same move-
1. Fedex Ground expands workforce
2. Fedex announces higher profit
3. Stockholders reward Fedex for reducing labor costs
4. Fedex saves millions by consolidating some locations
5. Fedex gains customers by offering better service guarantee on overnight service
6. Fedex expands network of small businesses serving fedex ground
7. Fedex ground service providers become more profitable with density growth
8. Fedex reduces legacy costs, ensuring a bright future
9. Fedex Express to concentrate on meeting time deadlines by transferring less sensitive overnight deliveries to Ground service providers
10. Fedex to fly more packages for fedex ground
All of this can be accomplished just by transferring a large part of express deliveries to ground for final delivery at very little expense. There's no need to completely eliminate express to accomplish this, or even any need to lay anyone off. Normal attrition over time would eliminate any massive layoff as you assumed, and this doesn't have to happen 'overnight' (pun intended).Packages to be delivered the final mile by ground could easily be sorted in Memphis, then transferred to ground terminals directly from the airport, or ground and express can operate out of the same terminals. All express pickups could still be made by fedex employees, or some could be picked up by ground, and then transferred to express to deliver to the airport if time allows.