Leading freight carrier,
) announced that it is offering flat rate shipping to individual
shippers and small business entities. The company's new flat rate
option is available on Express packages and is backed by the
FedEx Express money back guarantee.
The FedEx One Rate price will be based on the type of
packaging, selected service and distance. Given a predictable
pricing model, the company believes customers can efficiently
manage their shipping cost through a simplified one rate that
offers time-definite delivery and value-added services.
The market reacted positively to the news and stock prices
closed $1.19, up 0.7% from its opening on Monday, Oct 21,
Apart from the flat shipping rate strategy that is aimed at
attracting customers, FedEx remains successful in implementing
higher shipping rates, which are imperative for revenue growth.
Recently, the company provided rate hikes for 2014, including a
3.9% hike in shipping rates at FedEx Express for U.S. export and
import services, with effect from Jan 6, 2014.
The company also indicated that it will provide information on
rate hikes at FedEx Ground and FedEx SmartPost later this year.
We expect these initiatives to substantially better the company's
earnings power over the next several years.
Further, FedEx has spread itsservices across the U.S., Canada
and Mexico to capitalize on business opportunities in NAFTA
(North American Free Trade agreement) markets. The company is
mounting its Priority next-day services in its FedEx Freight
segment by opening a new service centre in Rochester, New York
and has also begun less-than-truckload (LTL) services to and from
Canada. The new service centre will cater to 13 U.S. and Canadian
markets dealing in cross border shipments to and from Toronto and
In Mexico, the company added two new service centers - one
each in Culiacán and Silao. These centers will strengthen its
freight network in northwestern and north central part of Mexico.
In April, the company, through its Trade Networks unit, announced
expansion service capabilities in Latin America through various
strategic operational developments such as the opening of new
offices in Brazil and Mexico.
Further, the company also formed strategic alliances with
Portlink Logística Multimodal Ltda, one of the largest freight
forwarders in southern Brazil to intensify its reach in the
Overall, through its Trade Networks division, FedEx remains
successful in establishing relationships and extending
capabilities to 19 countries across Latin America. These
initiatives enable the company to strengthen its international
business and provide opportunities to offset lower demand trends
in its domestic market.
FedEx, which operates with
United Parcel Service, Inc.
Radiant Logistics, Inc.
Expeditors International of Washington Inc.
) has a Zacks Rank #3 (Hold).
EXPEDITORS INTL (EXPD): Free Stock Analysis
FEDEX CORP (FDX): Free Stock Analysis Report
RADIANT LOGIST (RLGT): Free Stock Analysis
UTD PARCEL SRVC (UPS): Free Stock Analysis
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