FedEx let go of a reported $900 million annual business package with Amazon last year, eyebrows were raised.
Now finally admitting what most everybody else already knew,
that Amazon is indeed a competitor, Fred Smith is at work rebuilding the
overnight service that he invented.
FedEx CEO Fred Smith, as you read this, appears hot on the
trail of focusing his business model into serving retailers that have
not built out their own delivery network, and are also like FedEx, competing
with Amazon for business.
Companies like Walmart, Kohl’s, Home Depot, Target,
Apple, Best Buy and others are now shipping increasing amounts via FedEx.
Walmart, as example, according to Rakuten Intelligence, is
currently delivering 57% of its packages via FedEx whilst Apple shipments
numbers for 2019 were put at 53%.
U.S. Postal Service is still a big partner with FedEx, but
with nearly 75 billion USD in losses since 2007, Smith told the Wall Street
Journal last year:
“The Postal Service is imploding.
“They need to cut service, reduce compensation for its
unionized employees, and possibly ask the federal government for subsidies
to deliver packages—all unlikely options,” he added.
Build It They Will Come
FedEx has continued to beef up its capacity by more than 36
million square feet during the past five years, increasing sorting and
delivery capabilities for its ground network.
Those moves, for one thing, have allowed the company to rely
less on USPS.
As 2020 begins, FedEx has more than 680 jets and 180,000 delivery
So where is the focus right now for Fred Smith who dreamed
up overnight delivery, while studying at Yale, and then went on to launch
Federal Express June 18,1971 in Little Rock, Arkansas?
Can Mr. Smith, who changed air cargo nearly two generations
ago in 1971 become Mr. Smith, who does it again in 2020?
Fred certainly is not about to let go of the reins of the
company he thought up just yet. He speaks of the need to watch what he
does, not what is said.
Mr. Smith told WSJ, “In sports, business and the military,
the only thing that counts at the end of the day is, what the score is
on the board.
“We’ll let the points be counted up at the end
of the game,” Mr. Smith smiles.