WSJ has an article on FedEx needing to make changes to its fleets as customers want their deliveries slower and cheaper.
Things that absolutely positively have to be there overnight don't absolutely positively have to be there overnight anymore.
Nowhere was that more evident than when FedEx Corp. FDX +0.56% on Wednesday reported that its quarterly profit plunged 31% as its international customers and shippers flocked to slower, cheaper delivery options instead of its premium-priced express service.
Now the company whose name is synonymous with overnight delivery—and has built the world's largest air express fleet—must make even deeper changes that take it farther away from its roots. It has already tweaked capacity and deferred plane purchases. Now it will shrink its global network, possibly its air fleet and direct more business via third-party alternatives like ships, commercial airlines and third-party shippers.
Besides the shift in next day big packages, I wonder how much of the next day document delivery which I would guess is a much higher margin business than shipping iPhones around the world is impacted.
We have all suffered through 5MB document limits through e-mail delivery. Using Gmail you would be able to send a big document, but the receiver couldn't receive it in their e-mail system. With the growth of DropBox, Box, Google Drive, Micorsoft Skydrive you can now send GB documents to users in a text or e-mail for little cost and delivery in seconds.
In the WSJ article FedEx discloses the shift in delayed shipments from Asia.
Though you would think this "was a good problem to have," Dave Bronczek, CEO of FedEx Express, told analysts in an earnings call, the latest gain was driven by a 12% growth in deferred international export traffic, mainly led out of Asia and Europe. So while the company had "a lot of freight on our planes; our high load factors, quite frankly, were driven by the deferred traffic. So we had lower yields. We had more traffic, higher pounds—all in deferred traffic," Mr. Bronczek said. International export priority volume inched up only 2%.
Somewhere buried in those next day deliveries are probably documents which don't weigh that much and push the revenue up.
2 - 5 GB isn't enough. I have 27 GB with Skydrive and pushing up 1 GB of photos is something I don't even think about.
FedEx could have created a DropBox type of product, but there is no way they could charge the kind of money they make for a next day delivery. FedEx tried a fax service in 1984 that didn't work.
A new facsimile delivery service, known as ZapMail, made its debut in 1984. It guaranteed delivery of five pages or less in less than two hours for $35. That year, the firm made its first acquisition, package courier Gelco Express. Other acquisitions soon followed, including businesses in Europe and the Middle East. International expansion continued in 1985 when Federal Express established a European headquarters in Brussels, Belgium. Sales grew to $2 billion.
The company's ZapMail service proved unprofitable. As a result, Federal Express discontinued it in 1986.
Read more: Fedex Corp - Early History - Express, Federal, Firm, and Delivery http://ecommerce.hostip.info/pages/443/Fedex-Corp-EARLY-HISTORY.html#ixzz2Ox0CO1zw