Additional Indicators that Online Shopping is Changing the U.S. Economy

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Two stories today illustrate how e-commerce is changing the U.S. economy. First, there are indications that demand for shipping boxes is rising fast enough to give the manufacturers of containerboard used to make these boxes sufficient market power to both raise  prices and make price increases stick.   Investment Analysts from both Goldman Sachs and Jeffries both released Goldman Sachs both raised their ratings of containboard manufacturers to reflect their belief that the pricing power that these manufacturers now have is sustainable. Second, in its conference call yesterday, Wolverine Woldwide, a manufacturer of a broad range of casual and work shoes and boots stated that nearly 15% of its sales were [...] Read more »

FedEx Growth Continues to Rely on USPS

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In its 1st quarter 2013 earnings report FedEx reported that it handled over 108 million FedEx SmartPost parcels delivered by the Postal Service.  FedEx SmartPost volume grew by 17.6% on a year-to-year basis as compared to a 4.7% growth for shipments that FedEx delivers through its FedEx Ground and FedEx Home networks. Currently FedEx SmartPost generates 29.9% of the shipment volume tendered to FedEx Ground.  The USPS share of  FedEx Ground’s deliveries has increased by 2.4% over the past year and 6.3 since 2010. FedEx SmartPost’s double digit growth rate suggests that the market for USPS delivered parcels is extremely strong.   During this quarter, United Parcel Service was in at [...] Read more »

Amazon Goes Head to Head with USPS with Parcel Lockers in Virginia

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Amazon has now introduced parcel lockers to a third metropolitan area in the United States by installing seven parcel lockers in seven 7-Eleven’s in Northern Virginia. By installing parcel lockers in the same general geographic area as the Postal Service, Amazon clearly indicates that its parcel locker delivery system is a direct competitor with delivery by the U.S. Postal Service, United Parcel Service and FedEx. While Amazon’s parcel lockers are in the same general geographic area, Amazon has made some real estate and operating/software decisions that may provide Amazon with a competitive advantage among customers that find locker delivery attractive Amazon’s Lockers are in More Up-market Zip codes than Gopost Amazon [...] Read more »

USPS Delivered 30% of FedEx Ground Shipments in FedEx’s Fiscal Fourth Quarter

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For the twelfth consecutive quarter  FedEx has increased the proportion of shipments handled by its FedEx Ground subsidiary over the same quarter the previous year.    The continued rapid growth of FedEx Ground’s SmartPost service reflects the continuing increase in business-to-consumer shipments that FedEx transports for its customers. The following chart illustrates the share of FedEx Ground shipments delivered by the Postal Service since 2009.  The increase in USPS share of deliveries reflects the faster market growth of FexEx SmartPost as compared to FedEx Ground’s delivery using other FedEx Ground or FedEx Home contractors.  The fast growth rate of Fedex SmartPost reflects the need of B-2-C online retailers for a low cost delivery service [...] Read more »

Postal Service Delivers a Record share of FedEx Ground Shipments

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In its most third quarter, 2012, FedEx, through its FedEx SmartPost Operations delivered 32% of all shipments handled by its FedEx Ground Division.  The FedEx Ground Division includes FedEx Ground, FedEx Home, and FedEx SmartPost. During the quarter FedEx Ground had the Postal Service deliver 123 million parcels, an increase of 12.9% over the number of FedEx shipments that the Postal Service delivered a year ago.  On a daily basis this means that between FedEx dropping nearly 2 million parcels a day into the Postal Service’s delivery network. The Growth of FedEx SmartPost Volume is less than the growth in volume that Postal Service handled from all carriers that use it [...] Read more »

Who failed, Amazon or the USPS?

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Note:  A number of readers identified a serious error in the original version of this post.  The post has been modified to reflect a better understanding of why the Point of Sale System limited the products that the clerk offered to Mr. Jarvis. 1/12/2012 17:47 Jeff Jarvis, an influential social media evangelist and author of the Buzz Machine, had a problem. He bought a book from Amazon and wanted to return it. Sounds simple, doesn’t it? However, when he went to the Postal Service, he was told his only option was Express Mail, the most expensive service the Postal Service offered. So what did he do? He took the parcel and [...] Read more »

A Close Up Look at gopost

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The gopost parcel lockers appear all but ready for live customer tests. Viewing one in person clearly showed to me how a customer thinking of using a gopost would interact and how it would work for both able and disabled individualsm, as well as adults of a full range of heights. What a Customer First Sees A customer interested in using gopost will have no trouble finding it.  The bright red and blue colors make it stand out, just like Redbox and Blockbuster kiosks do.    The use of color focuses the consumers attention right where they have to go, the center console. Given that it is both bright red and stands out a [...] Read more »

FedEx Growth Shows Focus on B-2-C Market

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Paul Page, an editor with the Journal of Commerce, tweeted today “Trying to understand why Bloomberg sys FedEx 2q profit up on stronger consumer shipments when domestic shipments fell 4%.” The decline in domestic shipments he mentioned is for shipments of FedEx’s Express unit. FedEx experienced significant growth in shipment volume in its Ground Parcel units, with the fastest growth coming from its FedEx SmartPost unit that uses the Postal Service to deliver small parcels to households. What Mr. Page inadvertently uncovered was a great unspoken secret in the courier, express, and postal industry. The reason that FedEx has grown faster that United Parcel Service is that its business model [...] Read more »

FedEx Uses USPS for 30.4% of Ground Shipments

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FedEx’s 2nd quarter earnings release illustrates its business focus on e-commerce and home delivery.   Highlights are as follows: From the press release: “Our improved performance was largely a result of effective yield management programs and strong demand for FedEx Home Delivery and FedEx SmartPost services,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “With the healthy growth in online shopping this holiday season, demand is increasing for these residential delivery services.” Tidbits on FedEx Ground and FedEx SmartPost From the Statistical Book: 30.4% of FedEx Ground shipments are delivered by the United States Postal Service. 8.4% of FedEx Ground revenue is generated by shipments delivered by the Postal Service Revenue per shipment for [...] Read more »

FedEx Conference Call Transcripts

Seeking Alpha has published the full transcript of the FedEx 4th quarter and year end conference call that was held yesterday.   Anyone interested in the express, parcel, air freight or trucking markets should read the full transcript.  Below are some excerpts that illustrate how e-commerce is changing FedEx’s business. From the opening statement of Alan Graf, Executive Vice President and CFO Looking now at the Ground segment. Revenues climbed 15% to $2.26 billion, while operating income soared 31% to $417 million. Operating margins hit an all-time quarterly record of 18.4%. Revenue per package increased 7% primarily due to yield management actions. And package volume grew 6%, driven by increases in [...] Read more »