Who should police FedEx packages?
FedEx is trying to boost its presence in Europe by acquiring TNT, a Dutch parcel delivery company.
The Justice Department is accusing FedEx of shipping packages from illegal online pharmacies in spite of repeated warnings from U.S. drug enforcement officials.
A Justice Department indictment says FedEx knew it was delivering drugs to dealers and addicts, and continued the deliveries in spite of warnings from the government.
In a statement, FedEx says it can't police the more than 10 million packages it delivers per day. So, what are FedEx's responsiblities here?
“What you ideally would go for in this case is whoever is buying or selling these illegal drugs, not who’s carrying them,” says David Ross, a global logistics analyst at Stifel Nicolaus who follows FedEx.
Ross says FedEx would lose money if it spent time going through its packages.
Kent Smith of Ursa Major Associates agrees that FedEx can’t police shipments. Still, he says, FedEx should have a reasonable idea of what it’s transporting.
“If they’re aware that these companies were in trouble with the law, I think they had an obligation to do something about it,” he says.
The indictment says that instead, after some online drug sites were shut down by the government, FedEx started requiring online pharmacy shippers to be approved by its credit department, but continued delivering packages for them.