FedEx sees online shoppers powering holiday record
NEW YORK — FedEx expects to ship a record number of packages during the holidays, thanks to shoppers’ growing fondness for buying online.
Special delivery
Overall holiday sales are projected to rise 4.1 percent, according to The National Retail Federation.
That would be the smallest increase since 2009, but still higher than the 10-year average of 3.5 percent.
Online holiday sales will grow 16.8 percent, excluding travel purchases, according to research firm eMarketer. Online shopping accounts for about $1 in every $10 spent over the holidays.
The gain in sales volume should help delivery companies like FedEx and UPS.
Associated Press
The world’s second-largest package delivery company expects to handle 280 million shipments between Thanksgiving and Christmas, up 13 percent from the same stretch last year.
The forecast, released Monday, comes against a background of lackluster growth in the global economy. FedEx has warned the economy is stalling and expects conditions to get worse next year. It’s making big cuts in the businesses that have been the hardest hit, including its Express unit that moves top-priority shipments by air.
But the number of shipments FedEx handles at the holidays has climbed steadily along with the growth of internet purchases. The volume of packages it handles on its busiest day, which varies according to Christmas shipping deadlines, has nearly doubled since 2005.
On FedEx’s busiest day this year, projected to be Dec. 10, it forecasts 19 million packages will move through its network, up 10 percent from 2011. That’s in line with the increase FedEx has seen in years with normal growth rates, noted Deutsche Bank analyst Justin Yagerman.
FedEx’s holiday shipment growth has ranged from 4.3 percent to 18.3 percent since 2006.
Holiday shipments this year will be driven by sales of personal electronics, apparel, luxury goods and items from large Internet retailers, FedEx said.
FedEx and larger rival UPS Inc. can benefit twice when consumers shop online: They ship the gift to the receiver, and they also ship the unwanted presents that are later returned. UPS, which is based in Atlanta, hasn’t yet released its holiday forecast.
FedEx moves the bulk of its cheaper, lighter weight shipments from online and catalog retailers through its SmartPost service, a partnership with the U.S. Postal Service.
FedEx SmartPost has been a huge driver of growth for the company since it was formed. Average daily package volume grew 18 percent in the fiscal first quarter ended in August, more than three times the growth rate of FedEx’s overall ground shipments in the U.S.
FedEx, which is based in Memphis, Tenn., plans to hire 20,000 seasonal workers to help handle the surge, That’s the same number as last year.
Comments { }
Postandcourier.com is pleased to offer readers the enhanced ability to comment on stories. We expect our readers to engage in lively, yet civil discourse. Postandcourier.com does not edit user submitted statements and we cannot promise that readers will not occasionally find offensive or inaccurate comments posted in the comments area. Responsibility for the statements posted lies with the person submitting the comment, not postandcourier.com. If you find a comment that is objectionable, please click "report abuse" and we will review it for possible removal. Please be reminded, however, that in accordance with our Terms of Use and federal law, we are under no obligation to remove any third party comments posted on our website. Read our full Terms and Conditions.