June 18, 2014, 5:03 PM

E-commerce shipments spark an increase in FedEx volume

Average daily ground shipping volume grew 8% in the fourth quarter, driven primarily by e-commerce shipments, the company says.

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E-commerce continues to be good for FedEx Corp., where orders shipped for online merchants helped drive up average daily ground shipping volume by 8% in the fourth quarter of its fiscal year, the company said today.

“We are uniquely positioned to ride this wave that e-commerce is generating,” FedEx Ground president and CEO Henry Maier said on an earnings call with stock analysts today, according to a transcript provided by Seeking Alpha. FedEx Ground, one of several operating units of FedEx, handles the ground shipment in North America of packages weighing up to 150 pounds. It is  one of the top delivery services used by Internet retailers.

FedEx also forwards some ground shipments of packages up to 70 pounds to the U.S. Postal Service for local delivery through what FedEx calls its SmartPost service. Although its SmartPost average daily package volume fell by 8.0% year over year in the fourth quarter, that drop was largely due to a single large customer, Maeier said in the conference call. “If you exclude that one customer, SmartPost grew roughly 14.5% over the year,” he said. “That's still a pretty good business.”

FedEx Express and FedEx Freight also handle air shipments and shipments of items weighing more than 150 pounds, respectively, for e-commerce as well as other companies.

For the fourth quarter ended May 31, FedEx reported:

● Average daily package volume for FedEx Ground rose 8% to 4.60 million packages, up from 4.25 million;

● Average daily package volume for FedEx SmartPost fell 8% to 1.92 million packages from 2.08 million;

● Revenue per package for FedEx Ground rose 2%, to $9.41 from $9.19; revenue per package for FedEx SmartPost rose 8%, to $1.88 from $1.74;

● Total revenue for FedEx Ground increased 9%, to $2.78 billion from $2.54 billion, as total revenue for FedEx SmartPost fell 2%, to $231 million from $236 million;

● Total corporate revenue rose 4% to $11,84 billion from $11.44 billion, as net income increased 141% to $730 million from $303 million.

For the 12 months ended May 31, FedEx reported:

● Average daily package volume for FedEx Ground rose 9%, to 4.59 million packages from 4.22 million;

● Average daily package volume for FedEx SmartPost rose 6%, to 2.19 million packages from 2.06 million;

● Revenue per package for FedEx Ground rose 2%, to $9.10 from $8.94; revenue per package for FedEx SmartPost rose 1%, to $1.78 from $1.77;

● Revenue for FedEx Ground rose 10%, to $10.63 billion from $9.65 billion; revenue for FedEx SmartPost rose 6%, to $983 million from $926 million;

● Total corporate revenue rose 3%, to $45.57 billion from $44.28 billion, as net income increased 34%, to $2.10 billion from $1.56 billion.

FedEx is listed as a shipping carrier by 144 retailers in the Internet Retailer Top 500 and 183 in the Second 500. Its main competitor, UPS, is listed by 176 in the Top 500 and 251 in the Second 500. 

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