Originally Posted by
howardhughes8
For Fedex AND UPS alike, the business has to evolve, constantly change and transform, what worked last decade/a year ago may not work today.
I sincerely hope both Fedex and UPS are doing enough behind the scenes to evolve the business, account for the Amazon (and others) threat.
One example that comes to mind is the comments made by UPS management during earnings call (simply pointing out an example, this is not Fedex vs UPS because I hope both of our companies thrive for decades to come). They stated 2019 will be a big year for improving/increasing margins due to I believe 80% of the sorting being done automated. Unfortunately I take this to mean machines will replace manual labor which reduces costs. One example where automation helps the bottom line. So when Amazon becomes a more direct competitor, maybe UPS (and Fedex) can be a bit more aggresive on pricing to better compete without compromising margins.
Competition is healthy, and a business needs to evolve or it will perish. I hope for all our sakes Fedex and UPS are doing/will do enough to evolve/transform. One thing is completely clear. Standing still, relying on what you have been doing in the past is NOT AN OPTION!!
Nothing personal but your post is rich in ignorance. Yes, I work for FedEx. No I am not ignorant to Amazon and their growing shipping network. Yes I worry some day that our jobs could be lost to Amazon or another company or even automation. However, let me throw down some numbers which puts the situation into perspective.
Amazon is not FedEx's largest customer. No customer makes up more than 3% of revenue at FedEx. Amazon makes up only 1.3% of FedEx revenue. UPS is much more exposed to Amazon than FedEx as Amazon shipments make up more than 10% of UPS's revenue. E-commerce, while growing, only makes up 12% of all logistics. This last statement is key. When I look into the back of our cargo holds, I don't see Amazon boxes. Most of the stuff is freight/cargo being shipped. We also ship *a lot* of Hazard Materials. I don't see Amazon wanting to or even attempting to get into that market.
FedEx recently announced FedEx Fulfillment in direct competition with Amazon. It allows small and medium businesses to store inventory inside FedEx hubs and warehouses where the items are purchased off the internet and are quickly integrated into the FedEx system. This keeps the small and medium businesses' products sold out of prying eyes of Amazon, which when products are sold and shipped via the Amazon marketplace gives Amazon valuable insider information on what is hot and what isn't. Amazon then uses that insider information to directly compete against the small and medium businesses. FedEx uses package material displaying the business brand rather than FedEx (Amazon doesn't do that, Amazon uses their own branding). This allows small and medium businesses to compete in the marketplace without giving Amazon a look into their business model. More so, FedEx announced Next-Day Delivery for orders placed just after midnight. That's huge.
All of FedEx Ground's hubs are fully automated. Since 2005 FedEx Ground spent $5B in updating the hubs.
FedEx Freight just announced the delivery of bulky items: washing machines, mattresses, exercise equipment, furniture etc.etc. Again, these items are increasingly being sold via internet marketplaces and FedEx is ready to ship them.
FedEx Express announced in 2016 a $1.54B expansion, nearly doubling in size, of its International Paris Hub; making the Paris hub FedEx Express's second largest hub (at that time -- the following information about Indy probably negates that).
In May of 2018, FedEx Corp officially paid $4.4B cash for the purchase of TNT Express and has rapidly been integrating their operations into FedEx's.
Thanks to the corporate tax cuts last year, FedEx announced several new initiatives.
-a much needed $1B overhaul of the super hub in Memphis
-a $1.5B expansion of the major hub in Indianapolis
So you see, just from the information off the top of my head, FedEx Corp is evolving just as logistics and online marketplaces are evolving. FedEx is directly competing with Amazon and FedEx is growing outside of Amazon's growth thanks to growth in e-commerce. While e-commerce currently only makes up 12% of total logistics, Amazon is only 1.3% of FedEx's total revenue.
With a diverse portfolio of businesses (Express, Ground, Freight, Logistics, Services, or Office), FedEx is ready to help your business succeed.
https://www.wsj.com/articles/upss-20...ury-1529072397
https://www.ibj.com/articles/70951-f...rport-finances
https://www.constructiondive.com/new...is-hub/519291/
https://theloadstar.co.uk/size-now-m...me-deliveries/
https://www.americanshipper.com/news...-old-site-link