FedEx girds for holiday delivery boost

  • Associated Press
  • Wednesday, October 22, 2014 3:45pm
  • Business

MEMPHIS, Tenn. — FedEx expects another record for holiday-season deliveries.

The company forecast Wednesday that deliveries between Thanksgiving and Christmas Eve will rise 8.8 percent over last year, to 290 million shipments. That’s a more subdued forecast than a year ago, when FedEx predicted 13 percent growth for the season.

Volume is expected to surge on each of the first three Mondays in December.

FedEx Corp. said the peak day is likely to be Dec. 15, when it expects to handle 22.6 million shipments around the world.

FedEx and rival United Parcel Service Inc. struggled last year with severe winter weather in early December, a shorter holiday season, and a surge in late orders that was partly due to retailers promising free delivery even for shipments close to Christmas Day.

FedEx plans to add 50,000 seasonal workers to help carry the load this year. UPS has said it will add up to 95,000 people, and Amazon said it will hire 80,000, a 14 percent jump over last year.

The delivery companies and Internet retailers are benefiting from the trend toward online shopping and are banking on a strengthening economy and optimism about consumer spending. They are boosting hiring to meet consumers’ expectations that easy shopping on their computers and mobile devices can be paired with quick delivery of the goods.

FedEx expects to invest $1.2 billion in its ground-shipping network in its current fiscal year, with most of that going to increase capacity and automation. The company said that the improvements have sped up ground delivery by a day or more in more than two-thirds of the U.S.

UPS has also invested to boost shipping capacity during the holidays, said the company’s chief commercial officer, Alan Gershenhorn. He said that UPS had improved it forecasting and package tracking. UPS has not issued its forecast for holiday deliveries. The company reports third-quarter financial results on Friday.

Memphis-based FedEx said that its holiday-shipping forecast is included in its outlook for the fiscal year ending next May. The company said last month that it expects full-year earnings of $8.50 to $9 per share, assuming moderate economic growth. Analysts expect $8.99 per share, according to a survey by FactSet.

Helane Becker, an analyst with Cowen and Co., said FedEx’s share of the delivery business would increase at UPS’ expense because of the problems that UPS had last year. Some UPS customers didn’t get packages delivered until after Christmas.

Becker said that based on the holiday forecast, better-than-expected earnings in the June-through-September quarter, and a program of buying back shares, FedEx should raise its forecast for earnings through next May.

FedEx shares rose 55 cents to $160.43 in midday trading. Through Tuesday’s close, they were up 11 percent in 2014.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.