Tags: FedEx | MailService | PostOffice

FedEx Is Rapidly Overtaking the Post Office

a fedex box next to a post office mailbox
(Getty Images)

By Thursday, 08 October 2020 12:27 PM Current | Bio | Archive

There was a time when nearly everyone used the post office to mail letters and packages, and using services like FedEx was seen as a luxury. However, times have changed and the tables have been turned. Today, FedEx is gaining traction and is quickly becoming the preferred way to send mail.

The United States Postal Service (USPS) has been experiencing financial loss for more than a decade thanks to a decrease in mail volume and costly benefits obligations. This downturn has led to consumers reporting a substandard level of service, which has only caused more people to turn to alternate services, including FedEx.

Wall Street says FedEx is doing great

As reported by Barron's, FedEx reported sales that were above expectations for the first fiscal quarter of 2021. Sales were reported at $19 billion and shares went up by 9.2% in mid-September, which made shareholders happy. 

Although the value of FedEx stocks has been increasing since July 2020, this recent surge was created when President Trump rejected funding for the USPS. Trump rejected additional funding for the USPS to counter the high potential for voter fraud that could come from the push for mail-in voting.

Business owners are selling their FedEx routes

In light of FedEx stock value rising and an uncertain economy, many business owners are selling their FedEx routes. The majority of these people were already considering selling and are jumping on a positive financial opportunity before it disappears.

Business owners interested in selling are working hard to increase the value of their FedEx routes as much as possible. Sales will be profitable for those who have been taking good care of their employees, keeping documents organized, and taking care of equipment.

FedEx is reaching record sales

When FedEx parted with Amazon, massive amounts of revenue were lost. Further revenue was lost when the company had to spend $100 million on coronavirus-related expenses.

Thanks to a massive increase in ecommerce sales, FedEx ground delivery sales rose by 36% to $7 billion, the highest jump in a single year. Thanks to this surge, operating margins rose to 11.8% and large corporate customers are making FedEx highly profitable.

Thousands of FedEx jobs are being created

Even though the world is in the middle of a pandemic, mail services will be hit hard by the holiday season. People across the U.S. will be sending packages, cards and letters as usual and perhaps even more now that some travel has been banned.

FedEx plans to hire around 70,000 seasonal employees to handle the holiday load.

FedEx is also expanding Sunday delivery options to 95% of the U.S., building additional sorting centers, and is working hard to make sure they can handle oversized packages.

Business owners who run their own delivery routes will need to make sure their drivers and equipment are ready to handle the increase in the holiday load. This holiday season will be exceptionally heavy, and mail services need to be prepared. FedEx Chief Operating Officer Raj Subramaniam called this coming holiday season "unprecedented."

There's one drawback they can't carry ballots

While more consumers are turning to FedEx for guaranteed delivery times, better service and even better prices, they won't be able to use FedEx to mail in their ballots.

While people could technically use any mail service to mail in a ballot, there are two problems. With few exceptions, it's mostly illegal for private carriers to carry mail-in and absentee ballots, and only the USPS can postmark mail.

According to the U.S. Constitution, ballots are only valid when postmarked by the date of the election. Without a postmark, lost ballots would be thrown out even if they were mailed before the election date because there would be no postmark to prove when the ballot was mailed.

The future of FedEx looks bright

With FedEx growing rapidly, the future looks bright. The company may not be able to carry ballots anytime soon, but FedEx is working on something many see as urgent.

There is a plan under way for FedEx to distribute coronavirus vaccines worldwide through their refrigerated distribution centers. This is great news and could create an even bigger surge in value for the company when that time comes.

Larry Alton is a professional blogger, writer, and researcher. A graduate of Iowa State University, he's now a full-time freelance writer and business consultant. Currently, Larry writes for Entrepreneur.com, Inc.com, and Forbes.com, among others. In addition to journalism, technical writing and in-depth research, he's also active in his community and spends weekends volunteering with a local non-profit literacy organization and rock climbing. Follow him on Twitter (@LarryAlton3), at LinkedIn.com/in/larryalton, and on his website, LarryAlton.com. Read Larry Alton's Reports — More Here.

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FedEx is gaining traction and is quickly becoming the preferred way to send mail.
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2020-27-08
Thursday, 08 October 2020 12:27 PM
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