Weekly Update and Musings on FedEx

Where has this week gone? Goodness. A draft of the healthcare logistics report is due on Friday and so much of it is still in note format and not to mention I keep changing my mind on what to include and what not to include. This always happens to me but that’s ok, publication date is still set for early April and it will be ready, no worries (it has to, I have no more nails to bite!). Oh, today I got a look at one of the first infographics for the report and it looks great! Jola does such a lovely job on these. Thank you!

This week was the Georgia Logistics Summit. I spent an afternoon visiting with folks at the conference and was able to sit down and chat with Page Siplon, the coordinator of the event. Page is one of the nicest people I have ever met and his enthusiasm over Georgia’s logistics opportunities is infectious. Be sure to check out the Americas brief on our chat. I also posted it on the blog here.

I also had a fun customer call as well as some requests from this customer- love this company and it’s always such a pleasure to be able to help them out with requests. I’ve got 2 additional calls scheduled with different groups within this company tomorrow and am looking forward to each one.

So, FedEx. Overall earnings were good. Revenue up 3% to $11.3 billion and operating income up 9% to $641 million. In fact, even though bad weather was blamed for negatively impacting its revenues, the company’s operating income was decent across all divisions: Express OI was up 14%, Ground OI up 2% and FedEx Freight OI increased to $29 million from $4 million last year.

FedEx Ground did exceptionally well and led the rest of the divisions in terms of revenue growth, up 10% to $3 billion. Average daily volume increased 8% and according to its press release, market share gains were made thanks to its Home Delivery and B2B services. As for B2C, CEO Fred Smith commented that e-commerce companies needed to “shape up sloppy shipping practices or risk losing customers”. Ouch.

According to a Wall Street Journal article Mr. Smith continued, “retailers claimed that packages had been tendered to FedEx and UPS for delivery to their customers before they actually were. In addition, labels were often affixed incorrectly or items weren’t properly packaged and subject to damage. Retailers’ shortcomings on their side of the delivery equation is a big part of the e-commerce business that really didn’t get enough publicity last year because they were an integral part of the problem even more than the weather and the carrier performance.”

Well, this finger pointing is indeed interesting and makes the 2014 holiday season that much more interesting to look forward to. Will e-commerce companies fix their “sloppy shipping practices”? Will delivery companies become more flexible to meet changing consumer needs? Will we see the rise of a new delivery service option?

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