FedEx to acquire Parcel Direct to expand e-retail delivery services

FedEx Corp. plans to acquire Parcel Direct, a parcel consolidator company that will pick up and transfer retailers’ shipments to the U.S. Postal Service for final home deliveries, FedEx said. The Postal Service already offers a similar service with DHL.

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Operating as a subsidiary of FedEx Ground, Parcel Direct will serve the needs of high-volume online and catalog retailers to ship low-weight, less time-sensitive goods to residential customers over a 2- to 6-day period, FedEx said. "This acquisition is consistent with our long-standing strategy to acquire leading businesses that meet emerging market needs," said Daniel J. Sullivan, president and CEO of FedEx Ground. "We are confident we can aggressively grow this new business by combining Parcel Direct’s cost-effective and scalable network with FedEx sales, marketing and financial resources."

FedEx said it will pay $120 million in cash for New Berlin, WI-based Parcel Direct, a company with 450 employees and 2003 revenue of $250 million. Parcel Direct will work with the U.S. Parcel Services’ Parcel Select service, delivering shipments from retailers to one of 12 Postal Service facilities for final delivery to consumers.

The Parcel Select service is also available through DHL’s DHL@Home service. The Parcel Service had operated the @Home service with Airborne Express before DHL acquired Airborne last year.