FedEx reports fourth-quarter results Wednesday morning. It’s enjoyed a stellar year, and the company hopes to keep the streak going.
While international shipping has not been great for FedEx, Richard Armstrong, chairman of supply chain consultants Armstrong & Associates, says FedEx has a plan.
“UPS and FedEx frankly have a duopoly in the U.S. market,” he says. “They’re probably going to build the same kind of thing in the European market.”
Key, Armstrong says, will be FedEx’s acquisition of TNT, a Dutch parcel delivery company. FedEx’s share of the European market is small, but if it’s approved by European regulators, the $4.8 billion deal could change that.
Another game changer came in January, when FedEx bought GENCO, a Pittsburgh-based company that’s strong in warehousing and shipping returns. Arnold Maltz, associate professor of supply chain management at Arizona State University, says before, FedEx only handled the transportation part of that process.
“A returns processing capability in-house would give them a much better, much more complete product offering,” he says.
Maltz says FedEx taking in GENCO, a successful, high-margin operation, should also boost its bottom line.