FedEx Expects Record Deliveries This Holiday Season
FedEx Is Not Overwhelmed by Demand Ahead of the Holidays
Despite rising inflation and supply-chain difficulties, FedEx (FDX) expects to deliver a record number of packages this holiday season. The delivery company said it will deliver 100 million more packages this holiday season than it did in 2019. It is also forecasting deliveries to be up 10% compared to last year, which was a record year for the company.
The increase in deliveries is not expected to overwhelm FedEx. The company said retailers have been shipping from their stores to avoid the strain they have faced in the past. By having inventory in stores, logistics can be streamlined and shipping costs can be lower.
Consumers Get Their Shopping Done Early
Also reducing the demand on FedEx is the fact that consumers are getting their holiday shopping done early this year. Consumers have heard warnings for months about shipping delays and out-of-stock items. They have responded by hitting the stores and shopping online earlier than in years past. FedEx predicted yesterday will turn out to be its busiest day of the season.
For the 2021 holiday season, forecasts call for the number of ecommerce packages shipped to increase by 13% to 3.4 billion. At the same time, the number of delayed ecommerce shipments per day is expected to fall by 82%. In 2020 the number of delayed packages stood at 7.3 million. This year it’s expected to be 1.3 million.
Amazon to Benefit from Last-Minute Shopping
Consumers’ moves to shop early and in-store have weighed on Amazon (AMZN) so far this holiday season. The pandemic has also given the ecommerce giant’s rivals a chance to catch up. Instead of touting high numbers from the Black Friday weekend, Amazon kept it vague, only saying it was a record-setting period. Meanwhile Shopify (SHOP), which powers ecommerce for small merchants, said sales by its merchants increased 23% during Black Friday weekend to $6.3 billion.
But what Amazon has that its rivals do not is same-day and two-day shipping as well as a massive fulfillment network to support this. That enables it to ship orders right before Christmas, which could save Amazon’s holiday sales. After all, there are still many holiday shoppers out there who have procrastinated and will be turning to Amazon in their time of need.
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