Better Than Expected Results for FedEx
After a surge in residential deliveries during COVID-19, FedEx reported $17.4 billion in revenue for its fiscal fourth quarter. The company said that they are starting to see signs that the global economy is slowly recovering from the pandemic, as they’ve been experiencing holiday levels of business.
Much of their success was due to the surge in residential deliveries. “The company said that 72% of shipments in the U.S. went to residences in the latest quarter, compared with 56% a year ago”, according to the Wall Street Journal.
Such residential deliveries are consistent with those during the holiday season. FedEx has responded to the surge by delivering seven days a week and implementing new technology to better optimize their routes.
At the same time, residential deliveries have a higher cost of delivery. In order to try to curve higher costs, FedEx has begun to set limits on how many orders some major retailers can ship out from their stores.
What FedEx Earnings Could Mean for UPS
After Fedex reported better than expected quarterly results despite COVID-19 concerns, some are hopeful for UPS.
“UPS shares were up 3.5% while FedEx jumped 12%”, according to The Street. Although UPS experienced some success in such unprecedented times, their success was ultimately buoyed by FedEx.
Such strong ground performance is said to have FedEx capturing share from UPS. It is believed that FedEx did much better than UPS in its fiscal first quarter.