The news that Amazon might be getting into the delivery service industry — by way of consumers over carriers — didn’t seem to phase the top execs at FedEx.
At least that’s the perspective of Mike Glenn, Executive VP of FedEx, who spoke in a conference call following the company’s fourth quarter earnings report — a report that showed the company posted a net loss of $895 million on a revenue of $12.1 billion. During a time when FedEx is already struggling, it must now face the rising tech giants like Amazon and Uber who are looking to see how they can cut out traditional package carriers.
Amazon is reportedly working on a mobile app called “On My Way” that would enable regular people to deliver packages, instead of relying on a carrier service. Uber has also talked about similar services.
So, what’s going to stop their success? The “extremely capital intensive nature” and “sophisticated information technology” won’t be easy to overcome from any company looking to join the shipping networks, Glenn said, according to a USA Today report on the call. He didn’t mention Amazon or Uber by name, but he did allude to the competition looking to join the space.
“Research has indicated time and time again that a uniformed person with proper identification showing up at your doorstep is an important issue for customers,” Glenn said, according to the report. “Consistency of customer experience is very critical in that regard. So when you talk about the challenges of building a network, the scale, the input costs, the technology issues and the customer experience required to deliver what customers expect of companies like FedEx and our primary competitors, it’s a pretty tall hill to climb.”
He indicated that FedEx will monitor the possible competitors, but he said the company is “comfortable in terms of our strategy going forward and our ability to serve the eCommerce market and our customers.”
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