I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. To mitigate costs and improve efficiencies, it’s important to understand the market. So twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.
FedEx continues to shrink its network to match market demand while holding tight to its revenue management practices. Will it be enough as we head into the year’s second half, or are more customers turning to other less expensive carriers and providers and last-mile services such as BOPIS and curbside pickups?
FedEx announced Q4 earnings last night, and not surprisingly, revenue and volume declined across the board. Even though FedEx Ground also reported declines in revenue and volume, it was the only division to report positive operating income growth, which increased by 18% due to higher revenue per package and cost-reduction actions.
FedEx also announced that FedEx Ground operations and personnel in Canada will transition to FedEx Express Canada starting in April 2024.
Also during the fourth quarter, FedEx introduced a new returns program – FedEx consolidated returns – available at FedEx office locations. According to Carere, “It’s a low-cost e-commerce solution for lightweight apparel returns with end-to-end visibility. For shoppers, it’s a convenient, no-label, no-box drop-off experience using a QR code.”
Other tidbits from the FedEx earnings call:
Regional parcel carrier GLS has expanded beyond its nine-state western network to serve Texas, Chicago, Atlanta and Columbus, Ohio, with plans to expand its capabilities within those four areas. According to President Steven Bergan, GLS partners with LTL carriers Averitt Express and Custom Companies to handle the first and middle miles itself and inject parcels into partner networks in the added states. Partners include Courier Express in Georgia, LSO in Texas, UDS in Illinois, and Better Trucks in Ohio.
That’s it for now. Comments are always welcome. Let me know what I missed. Stay tuned for the next newsletter on July 12, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.