What’s Going On Here?US logistics group FedEx really is the full package, reporting better-than-expected quarterly earnings late last week even though it’s been rushed off its feet. What Does This Mean?It’ll surprise no one to hear that FedEx has been delivering a lot more parcels lately, which might be why its revenues and profits both mopped the floor with analysts’ expectations. It reported its highest quarterly sales on record thanks to the millions more parcels than usual it handled – not least because online shoppers kicked off their holiday shopping even earlier this year. Its profit for the quarter doubled, in fact, making FedEx one of this year’s biggest corporate winners. Still, investors are a hard crowd to please: they were put off by the company’s reluctance to say what next year might have in store – both because the future’s still uncertain, and because the pandemic’s pushed up its costs – and they sent its shares lower. Why Should I Care?Zooming in: Supercharged.
This year’s lockdown-driven ecommerce boom has essentially forced FedEx to work like every day is peak season, but the official peak season only started last month. That means it’s finally been able to raise its delivery prices, which it’s now said it’ll extend for as long as it needs to. That might not necessarily translate into its profits, mind you: FedEx will need to hire more people, buy more trucks, and generally up their costs if they’re going to keep operating at such high capacity.
The bigger picture: Special delivery.
If the online shopping craze isn’t enough to send FedEx’s profits higher, the vaccine craze might do the trick. The delivery of billions of doses all around the world has been dubbed one of the most complex logistical exercises ever – and one that only established delivery companies like FedEx and UPS will be able to manage (tweet this). | 