FedEx Absolutely, Positively Embraces E-Commerce Boom, Fueling Its Growth

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FedEx

FedEx is absolutely, positively bent on extending its recent growth in a delivery era that now is being dominated by e-commerce. So the company is upgrading everything from its physical infrastructure to its logo to match its ambitions.

The pioneering package delivery brand was used to growing with the increasing interconnectedness of the US and global economies. But the rise of e-commerce, particularly over the past several years, presented FedEx with an unprecedented growth opportunity—one the Memphis-based company is embracing.

Thus, in fiscal 2016, FedEx invested $1.6 billion in automated hubs in California and Florida to handle the growth in e-commerce shipments as well as 19 additional automated stations, now giving FedEx 68 automated stations and 35 automated hubs.

FedEx

FedEx also acquired TNT Express. And in keeping with its sustainability emphasis, the delivery services brand surpassed its goal of boosting vehicle fuel efficiency by 30 percent by 2020 from a 20015 baseline—five years ahead of schedule.

FedEx reported revenue of more than $50 billion, a notable 6 percent increase over the previous year, indicating its own determination to grow regardless of the current vagaries of domestic and global economies.

“Fiscal year 2016 was a year of significant accomplishments,” long-time FedEx chairman, president and CEO Fred Smith wrote in the letter that accompanied the company’s recently released annual report. “By creating new solutions for our customers, we help them grow and prosper.”

FedEx

For instance, he said, “It’s imperative that we continue investing for profitable growth by expanding our network capacity to match the predicted increase in e-commerce shipments.”

These growth ambitions, of course, bring FedEx increasingly into competition with e-commerce giants as well as continuing to be a beneficiary of their growth. Amazon, for example, recently introduced its own 40-plane delivery fleet and an Amazon-branded fleet of 4,000 trucking trailers to shuttle its wares

FedEx also continues to seek dominance in the remaining brick-and-mortar economy. For example, it recently struck a deal to make its services available at more than 1,500 Office Depot locations—instead of UPS—expanding a deal FedEx already had with the sibling chain OfficeMax.

FedEx Office Depot

To match its position as a fulcrum of the rising e-commerce market, FedEx also has simplified its visual identity and consolidated its look by turning all of its logos purple and orange. Those two colors are one of the most recognized representations of the logo by consumers, the company’s research found.

“For more than 43 years, the logo has built up equity for our brand, on packaging, aircraft and drop boxes,” said Patrick Fitzgerald, Senior Vice President of Marketing at FedEx. “As we grow and expand, we’ve recognized that there’s one FedEx brand in the world, and we want to make sure we maximize its value and simplify it for customers. The time was right to make a change.”

 

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