It seems as if each year, more and more people are using the convenience of online shopping, and that translates into more and more work for a company like FedEx Services. Customer engagement through ecommerce and the associated customer experience have fueled an increased demand.
“A record number of holiday shipments fueled largely by the steady rise of ecommerce are flowing through the FedEx global networks,” FedEx CEO Fred Smith said during Wednesday’s second-quarter earnings conference call, according to Seeking Alpha. “Monday, we picked up over 26 million packages global. We greatly appreciate the dedication of more than 340,000 FedEx team members who are delivering the holidays to our customers around the world. It’s no secret that ecommerce is changing the dynamics of the transportation industry and driving remarkable growth. We have strategic plans to ensure we will continue to benefit in the years ahead from this growth.”
For example, Smith said FedEx is integrating Ground and SmartPost facilities, and line haul systems to realize incremental operating expense savings in the future. Multiyear expansion of automated FedEx Ground facilities will allow continued profitable growth and provide the most flexible and fast as ground package system possible.
“We are also deploying new technology that will enable us to combine FedEx Ground and FedEx SmartPost packages going to common delivery addresses, which will significantly improve efficiency, productivity, and service,” Smith noted. “FedEx Freight is focused on improving margin trends in a week industrial economy through better balance and volume and yield and higher productivity.”
What’s more, Smith noted a couple of developments related to ecommerce.
“First, oversized packages are increasing, and second, a number of ecommerce shippers continue to use extremely cubed inefficient packaging, loaded density, and over-the-road ground trailers is therefore declining because of these trends,” he explained.
Mike Glenn, President and CEO of FedEx Services, added that the record-breaking demand during this peak season has been largely driven by the rapid growth of ecommerce.
“Our busiest days during peak have exceeded our forecast and more than doubled our average daily volume and should be noted that our busiest days this year are approximately double what they were just about eight years ago,” Glenn said. “Our ability to flex our networks to meet this demand and while delivering service our customers expect requires many elements. We continue to invest in new facilities, capacity expansion. We apply advanced engineering and use state-of-the-art rotation technology. We innovate the portfolio and certainly collaborate very closely with our customers.”