FedEx bullish on holiday shopping season
NEW YORK (AP) -- FedEx expects to ship a record number of packages during the holidays, thanks to shoppers’ growing fondness for buying online.
The world’s second-largest package delivery company expects to handle 280 million shipments between Thanksgiving and Christmas, up 13 percent from the same stretch last year.
The forecast, released Monday, comes against a background of lackluster growth in the global economy. FedEx has warned the economy is stalling and expects conditions to get worse next year. It’s making big cuts in the businesses that have been the hardest hit, including its Express unit that moves top-priority shipments by air.
But the number of shipments FedEx handles at the holidays has climbed steadily along with the growth of internet purchases. The volume of packages it handles on its busiest day, which varies according to Christmas shipping deadlines, has nearly doubled since 2005.
On FedEx’s busiest day this year, projected to be Dec. 10, it forecasts 19 million packages will move through its network, up 10 percent from 2011. That’s in line with the increase FedEx has seen in years with normal growth rates, noted Deutsche Bank analyst Justin Yagerman. FedEx’s holiday shipment growth has ranged from 4.3 percent to 18.3 percent since 2006.
Holiday shipments this year will be driven by sales of personal electronics, apparel, luxury goods and items from large internet retailers, FedEx said.
Overall holiday sales are projected to rise 4.1 percent, according to The National Retail Federation. That would be the smallest increase since 2009, but still higher than the 10-year average of 3.5 percent.
Online holiday sales will grow 16.8 percent, excluding travel purchases, according to research firm eMarketer. Online shopping accounts for about $1 in every $10 spent over the holidays.
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