Although October is not yet over, businesses across the world are turning their attention towards the holiday season. And it isn’t only retailers that are gathering their resources. FedEx, one of the global leaders in shipping, announced their end of year forecasts on Monday and are clearly expecting big things. Thanks to the always increasing e-commerce gift-giving market and the steady crop of last-minute shoppers, the company expects a 13% increase in volume. Although analysts looking at this report feel that consumers will choose less expensive shipping options due to the financial limitations of spending in a recession economy, FedEx is betting they will continue to be a large part of shoppers’ plans. So just as in 2011, FedEx will be hiring 20,000 temporary employees to help fulfill the almost 300 million shipping orders it expects to receive from Thanksgiving through the end of the year.
Most industry experts keep a close eye on the projections FedEx releases each year, as an easy way to mark the well-being of the economy and potential consumer demand during the holiday season. The shipping company had already announced they expected their holiday business to increase when their published their earnings outlook for the fiscal year 2013, and these latest comments prove they are maintaining that belief. But the analysts that feel FedEx may be overreaching point to the two times the company slimmed back its forecast for 2013 this year. Some of the reasons FedEx cited, European recessions and elevated energy prices, are issues that all businesses are dealing with. But the other situation, more consumers trying to save money by choosing slower shipping services, may be a core issue for their business for the foreseeable future. Yet FedEx has found a way to combat this as well, with their SmartPost service, which doesn’t offer the same speed and quality as standard FedEx shipping but get the job done cheaper. That should help maintain the company’s profits through the holiday season.
FedEx’s EVP of Market Development and Corporate Communications, T. Michael Glenn addressed these concerns by promising that the company remains fully committed to hiring their normal slate of seasonal workers. The staff they are hiring will be pressed into service in their SmartPost and Ground divisions, which they expect will receive the lion’s share of holiday ordering. And they fully expect ‘Green Monday’, their December 10th event promoted as the official kick off of holiday shipping, to be the busiest day in the company’s history. Their estimations call for a 10% increase from Green Monday of 2011, to the tune of 19 million total shipments. In 2011, Green Monday trailed only Black Friday and Cyber Monday in shopping revenue, and these e-commerce focused events play right into FedEx’s strengths.
FedEx has been building steadily over the past decade, in large part due to smart contracts with internet retailers such as FreeSamples.org and other delivery services that need their assistance. In fact, FedEx delivers to the United States Postal Service through its SmartPost shingle, which delivers the company a solid share of American catalog ordering. That helped lead to an 18% increase in the average amount of daily deliveries over the past year. And according to the latest market reports, all online sales leading up to the holidays could total $54.5 billion dollars this year, a more than 16% increase. With numbers like that on the horizon, it is obvious why FedEx is maintaining its confidence.
