FedEx detailed efforts to remove more than $6 billion in costs over time as capacity outstripped demand globally, while calling for the largest-ever rate increase of 6.9%, as analysts asked hard questions about operating missteps after a quarter with revenue up 6% but operating income down 18%.
While most markers indicate more than sufficient carrier capacity to meet Q4 demand, that doesn’t mean all is smooth sailing, with chokepoints and a possible dockworker strike. This operations special report on capacity management from Multichannel Merchant taps experts and retailers on the Q4 outlook and what to expect.
Lowe’s may still be Avis to Home Depot’s Hertz atop the home improvement sector, but it has something the orange big-box giant doesn’t: nationwide same-day delivery through an expansion of a trial that began in February with formerly grocery-only service Instacart in select locations.
Following in the footsteps of American Eagle Outfitters, Gap has launched its own fulfillment services platform, making the high-tech, automated network it has invested billions in available for other retailers to take advantage of as the in-house/outsourced services trend continues.
Paris-based major 3PL Geodis is acquiring Need It Now Delivers, adding last-mile delivery principally on the east coast, a capability that was lacking for the contract logistics, freight and fulfillment provider as it looks to ramp up its penetration into ecommerce and omnichannel companies.
Amazon is jumping on the peak surcharge bandwagon for the first time, asking sellers using its Fulfillment By Amazon service to pay 35 cents more per item for goods sold in the U.S. and Canada, running from Oct. 15 to Jan. 14, according to CNBC. This follows peak fee announcements from both FedEx and the U.S. Postal Service.
An activist investor group with control of at least two board seats at FedEx is reaching out to FedEx Ground contractors to see what they think of efforts by a new association of independent service providers to collectively approach management about challenges to their operations.
The U.S. Postal Service plans to hikes rates in January as a hedge against a projected $1 billion inflationary hit on 2022 operating costs. The USPS reported a $459 million third-quarter loss, which excluded a $2.15 billion impact from reform legislation addressing prefunded retiree healthcare. A peak surcharge is also being imposed.
The head of a renegade association of FedEx Ground contractors said those businesses have a strong case to be reclassified as franchisees, which would challenge the very contractor model the unit is built upon. Spencer Patton said many contractors could meet the reclassification test, giving them more legal rights and benefits.
Ten months after joining forces, regional carriers LaserShip and OnTrac have launched a transcontinental home delivery network linking east and west coasts, with plans to expand to Texas in early 2023 and other markets thereafter, offering shippers an alternative to FedEx and UPS.