One of the largest package delivery companies,
) has won a $171 million contract from the U.S. Department of
Defense for small package delivery services for the military.
This contract expires on Sep 30, 2014.
FedEx also won a second defense contract worth $49.8 million
for overpacking and transportation of perishable products for the
Defense Commissary Agency and Defense Logistics Agency. Under
this contract, FedEx will deliver perishable goods such as fresh
fruits and vegetables from the U.S. West Coast to military
locations in Japan, Korea, Guam and Alaska. This contract will be
brought into effect on Oct. 1, 2013 and unless extended, will
expire on Sep 30, 2014.
Apart from FedEx, the Department of Defense also issued two other
contracts worth $171 million each to
United Parcel Service, Inc.
) and Polar Air Cargo, subsidiary of
Atlas Air Worldwide
) for providing transportation services. Both these contracts
also expire on Sep 30, 2014.
Apart from gaining new military contract, FedEx also extended its
multi-year contract with United States Postal Service (USPS) in
Apr 2013. Effective Oct 2013, this seven-year contract worth
$10.5 billion would require FedEx Express to provide
airport-to-airport transportation for USPS Express Mail and
Priority Mail services within the U.S.
FedEx also aims to spread its services across the U.S., Canada
and Mexico and capitalize on potential business opportunities in
NAFTA (North American Free Trade agreement) markets. The company
is boosting its international presence with its acquisitions of
Opek Sp. z o.o. (Polish courier company), TATEX (French B2B
Express transportation company) and Rapidão Cometa (Brazilian
Recently, the company acquired Supaswift and its subsidiaries
that offer FedEx Express international services in Southern
Africa, gaining direct access to seven markets in Southern
Africa. FedEx is also building a new hub in Guangzhou, China, to
cater to 100 new Chinese cities within the next five years.
ATLAS AIR WORLD (AAWW): 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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We believe that new contracts wins along with investments in
organic growth as well as acquisitions will lead to greater
operational efficiency, significant long-term synergies and
FedEx, which operates with companies such as
Radiant Logistics, Inc.
), has a Zacks Rank #3 (Hold).