NEW YORK (AP) - FedEx expects to ship a
record number of packages during the holidays, thanks to shoppers'
growing fondness for buying online.
The world's second-largest
package delivery company expects to handle 280 million shipments between
Thanksgiving and Christmas, up 13 percent from the same stretch last
year.
The forecast, released
Monday, comes against a background of lackluster growth in the global
economy. FedEx has warned the economy is stalling and expects conditions
to get worse next year. It's making big cuts in the businesses that
have been the hardest hit, including its Express unit that moves
top-priority shipments by air.
But the number of shipments
FedEx handles at the holidays has climbed steadily along with the
growth of Internet purchases. The volume of packages it handles on its
busiest day, which varies according to Christmas shipping deadlines, has
nearly doubled since 2005.
On FedEx's busiest day this
year, projected to be Dec. 10, it forecasts 19 million packages will
move through its network, up 10 percent from 2011. That's in line with
the increase FedEx has seen in years with normal growth rates, noted
Deutsche Bank analyst Justin Yagerman. FedEx's holiday shipment growth
has ranged from 4.3 percent to 18.3 percent since 2006.
Holiday shipments this year
will be driven by sales of personal electronics, apparel, luxury goods
and items from large Internet retailers, FedEx said.
Overall holiday sales are
projected to rise 4.1 percent, according to The National Retail
Federation. That would be the smallest increase since 2009, but still
higher than the 10-year average of 3.5 percent.
Online holiday sales will
grow 16.8 percent, excluding travel purchases, according to research
firm eMarketer. Online shopping accounts for about $1 in every $10 spent
over the holidays.
FedEx and larger rival UPS
Inc. can benefit twice when consumers shop online: They ship the gift to
the receiver, and they also ship the unwanted presents that are later
returned. UPS, which is based in Atlanta, hasn't yet released its
holiday forecast.
FedEx moves the bulk of its
cheaper, lighter weight shipments from online and catalog retailers
through its SmartPost service, a partnership with the U.S. Postal
Service.
FedEx SmartPost has been a
huge driver of growth for the company since it was formed. Average daily
package volume grew 18 percent in the fiscal first quarter ended in
August, more than three times the growth rate of FedEx's overall ground
shipments in the U.S.
The ground segment, which
moves mostly non-priority shipments by truck, has held up despite slower
growth around the globe as consumers and businesses opt for slower
methods of shipping to save money.
FedEx, which is based in Memphis, Tenn., plans to hire 20,000 seasonal workers to help handle the surge - the same as last year.
File photo (MGN)
