Transportation News

FedEx CEO Fred Smith: Uber Is Terrific But Unlikely To Be ‘Major Player’ In Logistics

There’s just an urban mythology out there that the app somehow changes the basic cost input of the logistics business or changes the patterns or the underlying business situation and that’s just not–that’s just incorrect.

Milder winter weather around Christmas helped FedEx Corp. have a happier holiday season than it did a year ago.

But despite beating analysts’ predictions for the third quarter, the Memphis shipping giant’s projections for its full fiscal year results were below Wall Street’s expectations.

That helped send company shares down about 1 percent Wednesday, closing at $173.30.

Meanwhile, CEO Frederick Smith shrugged off the potential competitive threat of ride-sharing services such as Uber, which is dipping a toe into the logistics business, albeit on a limited basis.

FedEx reported third-quarter earnings of $580 million, or $2.01 per share, compared to $378 million, or $1.23 per share, in the year-ago quarter. Analysts had expected earnings of $1.87 per share for the quarter ended Feb. 28, according to Thomson Reuters.

“We had a very successful peak season as volumes grew across all transportation segments,” CEO Smith said in a statement.

“I just don’t think they’re likely to be a major player in the logistics business”

The third quarter a year ago included a holiday shipping season beleaguered by snow delays that bogged down FedEx as well as rival shippers UPS and the U.S. Postal Service. For the 2014 holiday season, all three shippers took steps to prevent gift deliveries from being delayed again, with FedEx announcing in September it would hire some 50,000 holiday workers.

FedEx CEO Fred Smith

“Well, we, FedEx, were Uber before Uber was there”Frederick Smith, CEO, FedEx

The company’s FedEx Ground division, based in Moon, reported revenue of $3.39 billion in the third quarter, a 12 percent increase from $3.03 billion in the year-ago quarter. That represented the largest year-over-year percentage increase of any FedEx division.

The Ground division’s average daily package volume was up by 7 percent. The company attributed the increase in part to higher revenue per package - it raised shipping prices in January - as well as to the milder weather.

For the fiscal year that ends in May, FedEx is predicting earnings per share between $8.80 and $8.95, but Thomson Reuters said an average of analysts were expecting $8.97.

During a conference call with analysts to discuss the earnings results, Mr. Smith was asked whether FedEx saw ride-sharing company Uber as a potential threat to its business model.

“There’s a great country and western song called, ‘I Was Country Before Country Was Cool,’ ” Mr. Smith said in response. “Well, we were Uber before Uber was there.”

Uber launched a pilot program called Uber Rush in New York City last year, which provides couriers to deliver packages in several boroughs. It has not announced any plans to expand that, but CEO Travis Kalanick told Bloomberg Businessweek shortly after the service’s launch that it was going well.

FedEx’s own same-day city service has largely met the demand for moving things the same day, and represents a small portion of the company’s business, Mr, Smith said. “It’s a much smaller market than the business of moving things that are processed on the circadian pattern we all live by. You know, go to work at 8, come home at 5,” he said, noting that most e-commerce orders are processed between 8 p.m. and midnight.

He added that Uber is a “great company” and that he uses the service himself.

But just having an effective app doesn’t mean a company like Uber could change the costs or disrupt the patterns of a major logistics operation, Mr. Smith said. “I just don’t think they’re likely to be a major player in the logistics business.”

Source: Pittsburgh Post-Gazette

More on Uber


Article Topics
News   Transportation   Transportation Management   Uber   All topics


Comments
1 Comments (displaying chronologically) Post a comment
You must be logged in to post a comment. Login.

 
Latest Transportation News
Trucking Ambassadors of Safety
As Landstar’s “ambassadors of safety,” Landstar Safety Officers (LSOs) are the representatives from each independent agency at the forefront of Landstar’s Mutual Understanding of Safety Together…

2019 Transportation Management Systems Market Update
The transportation management systems market is growing right along with the number of challenges that shippers face in today’s hectic freight transportation environment.

Transportation & Supply Chain Predictions for 2019
For 2019, we believe the U.S. transportation industry and supply chain professionals will place more emphasis on digitization within the supply chain to help them address future complex challenges.

Holiday Season Heightens Challenges of Online Returns for Retail Supply Chains
Although online retailers are coming to terms with the high return volume that comes with online shopping, reducing the cost associated with those returns remains a top priority.


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles