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FedEx Says Retailers Should Be Paying More for Web Delivery - WSJ
By LAURA STEVENS
Updated March 16, 2016

FedEx Corp. executives said retailers should be paying more for shipments to help offset the cost of expanding its network to meet the growing demands of e-commerce.....FedEx CFO Alan Graf said that it is important for the price of shipping an e-commerce package to reflect the effort it takes to deliver it. “We can’t build these networks and spend this kind of capital and not get a return on it,” Mr. Graf said in an interview....Mr. Smith said he thought it was unbelievable that some have suggested that Amazon would be able to build out a network to compete with FedEx and rival United Parcel Service Inc.

Just because Amazon has created a network of warehouses to support its retail operations, doesn’t mean that could translate to something akin to FedEx’s massive network for deliveries, Mr. Smith said. “The key driver of any delivery system is route density and revenue per delivery stop,” he said....One way that FedEx intends to boost its e-commerce returns is by increasing fees attached to the growing number of large shipments such as kayaks and other items that don’t fit into its ground network.

Mr. Smith blamed some of the trend in low-cost e-commerce expectations on the U.S. Postal Service, which it and other delivery companies, including UPS and Amazon, use to deliver packages the most expensive leg of the trip—to resident’s doors....
Fedex  e-commerce  retailers  shippers  package_delivery  couriers  return_on_effort  Amazon  UPS  USPS  last_mile  logistics  distribution_channels  delivery_networks  route_density 
march 2016 by jerryking

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