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FedEx Plans Fall Launch of Revamped Delivery Platform

FedEx

What’s better than a delivery fleet spanning hundreds of aircraft, tens of thousands of vehicles and hundreds of service centers?

It depends on who you ask, but FedEx — which boasts the operational footprint just described — seems to think it might be the creation of an end-to-end commerce platform that helps businesses optimize their supply chains, sell to customers and manage deliveries. If that sounds like a setup designed to compete with Amazon, well, that is kind of the point. 

This, as during Thursday’s (March 21) Q3 fiscal year 2024 earnings call, FedEx executives teased the upcoming launch of its “fdx” platform this fall, the latest progression of its merchant logistics play following the company’s 2020 acquisition of eCommerce platform ShopRunner. 

“The fdx platform will enable us to enhance our longstanding relationships with merchants of all sizes. We’ve opened a private preview, and based on their feedback we are incredibly excited for the full launch this Fall,” executives told investors on Thursday’s call, highlighting their strategy of “democratizing” eCommerce.

The platform will offer businesses “digital capabilities and insights” to create a custom post-purchase experience, while merchants will remain in control of their customer experience. The platform will also include tools to integrate real-time FedEx network insights into order management systems, a capability that is new to FedEx.

“We are building the network of the future with digital and data-driven solutions, leveraging our scale and insights from moving 15 million packages per day,” said FedEx President and CEO Raj Subramaniam.

The new platform comes as the company increasingly looks to compete in logistics with Amazon amidst growing competition in the landscape. 

As PYMNTS has reported, FedEx ended its delivery pact with Amazon in 2019, which has, for years, been crafting its own logistics network and has led FedEx in package delivery numbers to consumers in the U.S. since 2020 and last year surpassed UPS to become America’s largest delivery business. 

Read moreFedEx’s eCommerce Battle Hinges on ShopRunner and a ‘Critical Mass’ of Retailers

Optimism Despite ‘Challenging Demand Environment’

FedEx noted in its financial materials that the most recent quarter’s results were negatively affected by continued demand weakness and cost inflation, partially offset by cost-reduction actions and U.S. domestic package yield improvement. 

“We are focused on improving profitability in what remains a challenging demand environment,” executives told investors. 

Executives noted that the company’s FedEx Freight verticals remains focused on cost discipline, which was supported by a fourth round of furloughs to match staffing with demand and network optimization from the planned permanent closure of 29 facilities. 

Per the company’s materials, FedEx Express continued to implement volume-related and structural cost-reduction actions, including further reductions in flight hours and the early retirement of certain aircraft and related assets to mitigate the negative effect of ongoing demand weakness. 

Still, the logistics company stressed that it would continue to cut costs and trim spending looking forward and raised its 2024 guidance as a result — news that, along with a $5 billion share buyback, sent FedEx’s stock rallying more than 12% in the after-hours session on Thursday as of reporting.

“The solid close to the fiscal year demonstrates the significant progress Team FedEx has made in advancing our global transformation while adapting to the dynamic demand environment,” said Subramaniam. “FedEx is becoming a more flexible, efficient and data-driven organization as we significantly lower our cost structure, drive enhanced profitability, and deliver outstanding service for our customers.”

See alsoFedEx Reorg Puts Amazon in Crosshairs in Battle Over eCommerce Deliveries

FedEx also announced optimization plans to streamline pickup-and-delivery operations across its networks in 20 markets, and executives explained that both its employee courier and the contracted service provider models will continue to play critical roles within its U.S. operations network and for the overall success of the company’s Network 2.0 strategy. 

The company’s fdx launch this fall is a big part of its go-forward strategy. As reported here, by combining eCommerce and delivery, the existing ShopRunner app offers a streamlined alternative to visiting several online shopping sites and juggling different brand choices, return policies and tracking numbers. The fdx platform will look to further build on and streamline those capabilities and benefits to further differentiate FedEx’s commerce offerings.

“We are going to be the only provider that not only has the physical capabilities but also a very comprehensive digital capability,” said company executives on Thursday’s call responding to a question about the fdx platform. “We are enthusiastic about this.”

For further reading, the PYMNTS Intelligence report, “The Online Features Driving Consumers To Shop With Brands, Retailers or Marketplaces,” a collaboration with Adobe, unpacks the ecommerce benefits and features that have an outsize impact on driving consumer behavior.