FedEx Corp. expects to hire 50,000 package handlers, helpers, drivers and other workers to help the shipping carrier get packages from e-retailers to online shoppers this holiday season.
That estimate came today during the company’s conference call with analysts to discuss the fiscal first quarter financial results. FedEx credits e-commerce with driving a 6% year-over-year increase in average daily volume for the company’s ground segment.
The company also repeated that on Jan. 5, 2015, its shipping rates will increase by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services, along with FedEx Ground, FedEx Home Delivery and FedEx Freight.
The approaching 2014 holiday shopping is no doubt refreshing memories of last year’s delivery problems, when weather, timing and aggressive shipping offers from retailers conspired to leave some consumers without their purchases when desired.
FedEx rival United Parcel Service of America Inc., which took the blame for many online orders arriving after Dec. 25 last year, announced yesterday plans to hire 90-95,000 workers to handle the anticipated surge in package deliveries between October and January. “We have initial volume forecasts from our customers and are starting the hiring process for our temporary peak season jobs,” said John McDevitt, UPS senior vice president of human resources and labor relations. UPS last holiday season initially projected hiring 55,000 workers, but hired an additional 30,000 during the season when it began falling behind schedule. Earlier this month, UPS said it will have 10% more doors for loading delivery vans than during the 2013 peak period.
UPS and FedEx are among the leaders in e-commerce technology and services vendors serving Internet Retailer’s Top 1000 merchants as measured by annual web sales.
Also today, retail chain Kohl’s Corp., No. 23 in the Internet Retailer Top 500 Guide, said it expects to hire 67,000 seasonal workers to help holiday shoppers both in stores and via Kohls.com. A projected 9,300 of those workers will staff the chain’s warehouses. In August the chain affirmed its plan to use 800 stores to fulfill e-commerce orders and help it handle peak holiday shopping. In the days before Christmas 2013, some Kohl’s customers complained about the retailer not fulfilling orders quickly enough.
During today’s FedEx conference call, Mike Glen, president and CEO of FedEx Services, expressed confidence that the carrier and its bolstered work force would be able to handle this year’s holiday deliveries.
“We’re expecting another record peak season in terms of delivery volume,” he said, according to a transcript from SeekingAlpha. “Peak will once again be compressed this year with Cyber Monday falling on Dec. 1. We’ve been in active dialogue with our retail and e-tail customers all year to understand their peak shipping needs and plan our operations accordingly.” Cyber Monday is the first workday after Thanksgiving, when marketers encourage shoppers to use work and personal computers and mobile devices to buy holiday gifts.
Part of the delivery problem last year was that the period between Thanksgiving and Christmas was unusually short, only 26 days, concentrating much holiday shopping in a relatively short time span. This year there will be only one more day between the two big holidays, a 27-day period that is likely to be hectic for online retailers and delivery services.
For the first quarter ended Aug. 31, Fed Ex also reported:
•Average daily package volume rose 4% to 3.99 million packages.
Average daily package volume for FedEx SmartPost fell 10% to 1.88 million packages.
Revenue per package for FedEx Ground rose 3.1%, to $9.33 from $9.05; revenue per package for FedEx SmartPost increased 10.2%, to $1.84 from $1.67;
Total revenue for FedEx Ground increased 8.4%, to $2.96 billion from $2.73 billion, as total revenue for FedEx SmartPost fell 1.3%, to $221 million from $224 million;
Total corporate revenue increased 6.0% to $11.68 billion from $11.02 billion, as net income increased 23.9% to $606 million from $489 million.
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