FedEx forecasts record holiday volume

FedEx forecasts record holiday volume

FedEx Corp. (NYSE: FDX) is forecasting another record holiday. The company expects to move more than 290 million shipments between Black Friday and Christmas Eve, an 8.8 percent increase in overall year-over-year Peak seasonal volume. The season is expected to be bolstered by three volume spikes throughout December, occurring the first three Mondays of the month and each expected to surpass 20 million in volume.

Dec.15 is projected to be the busiest day in company history, with a forecasted 22.6 million shipments moving around the world.  Peak projections are included in FedEx earnings guidance for FY15.

“Our more than 300,000 dedicated team members around the world, combined with our continued investment in our powerful and flexible global networks, position FedEx to once again deliver outstanding customer service this holiday season,” said Frederick W. Smith, CEO of FedEx Corp.

Year-round preparation for the Holiday Season

FedEx has taken several measures to prepare for the busy Peak season.

  • The company has continued its strategic investment in network growth and capacity.
    • In the past five years, the FedEx Ground investment for capacity projects has been close to $2.5 billion—nearly 90 percent of the FedEx Ground total capital expenditure in that five years.
    • In the same time period, FedEx Ground has completed nearly 250 major capacity projects—including new facilities, relocations and major expansions.
    • In FY15, the company plans to invest another $1.2 billion in FedEx Ground, most of which is for capacity and automation, including more than 70 major expansion projects.
    • Network enhancements have accelerated FedEx Ground delivery by one day or more in more than two-thirds of the United States.  FedEx Ground is 27.3 percent faster than the competition.  Eighty-three percent of packages are delivered in three business days or less.
  • For more than five years, the FedEx Ground segment has planned and executed a seven-day Peak season operation, including Black Friday, and plans to do so again in 2014.
    • In 2013, the seven-day operation enabled FedEx Ground to smooth out volume spikes, work volume ahead of schedule and quickly catch up where there was a weather disruption, leading to record service.
  • FedEx Express continues to modernize its global fleet of aircraft for enhanced reliability.
    • The new freighters, including 757, 767 and 777 aircraft, are operationally more efficient, use less fuel and have lower emissions.
  • FedEx Express also has introduced a new technology reporting system to its network called “RADAR”, which enhances delivery operations planning each day for improved service and efficiency.
  • FedEx maintains close collaboration year-round with customers around the world to understand their specific needs and forecast for anticipated volumes during the holiday season.
  • The company is adding more than 50,000 seasonal positions across its operating companies.  This includes package handlers, helpers, drivers and other support positions.  Based on growth expectations and network expansion, the majority of those seasonal workers will have the opportunity to continue working with FedEx after the holiday season.
  • FedEx is using enhanced visibility technology to help customers plan for package deliveries and pickups.
    • At many FedEx Ground facilities, high-speed, six-sided camera tunnels with real-time package tracking updates scan every side of a package, enhancing the readability of a shipping label, enabling sortation from the bar code, and providing visibility to a package’s location at all times.
    • That tracking technology, coupled with network-wide improvements, will offer customers increased visibility this season, including clarification as to exactly when a package is available for pickup at FedEx locations (for customers using the Hold at Location service) and increased visibility into a package’s journey, from the time FedEx takes possession of the package to its estimated delivery date.

FedEx Volume Over the Years

FedEx has experienced steady growth in holiday volumes over the years.  A breakdown of the busiest days since 2007 follows:

  • Dec. 17, 2007 – 11.5 million shipments
  • Dec. 15, 2008 –  12 million shipments
  • Dec. 14, 2009 – 14.2 million shipments
  • Dec. 13, 2010 – 15.6 million shipments
  • Dec. 12, 2011 –17.2 million shipments
  • Dec. 17, 2012 –19.9 million shipments
  • Dec. 16, 2013 – 22 million shipments

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