Tuesday, 09 January 2018 09:30

FedEx Set to Deliver Big Returns

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(New York)

While logistics companies have understandably done well alongside the rise of ecommerce, FedEx might be poised to deliver something particularly special in the medium term. There are two big reasons why. The first is that the US postal service looks likely to raise its rates, which would make the margin between USPS and UPS/FedEx smaller, giving an edge to the latter. Additionally, FedEx has been investing heavily into upgraded distribution hubs which will give it a speed advantage over UPS. UPS, on the other hand, is just at the beginning of that process, so the recent status quo of UPS having higher margins looks set to end.

FINSUM: We think we might be entering a few golden years for FedEx, as their upgraded speed of delivery, combined with more competitive pricing, will be an “x” factor given the ever growing demand for quick delivery.

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