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FedEx to Amazon: Take your freight and shove it

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Tennessee Gov. Bill Lee addresses reporters at a news conference announcing an investment by shipping giant FedEx Corp. of $450 billion to help modernize its Memphis hub on Friday, August 2 in Memphis, Tennessee. (Associated Press: ADIAN SAINZ)

NEW YORK  — FedEx says it will no longer make ground deliveries for Amazon as the online shopping giant builds its own fleet and becomes more of a threat to delivery companies.

The announcement Wednesday comes two months after FedEx terminated its air delivery contract with Amazon. FedEx said dumping Amazon is part of its plan to go after more e-commerce deliveries from other companies.

Traditional retailers like Walmart and Target want to sell more of their goods online, which in turn allows FedEx to distance itself from Amazon.com without suffering the same competitive damage it might once have.

“This does not come as a surprise to us,” Citi Research analyst Christian Wetherbee said in a note to clients. “The company is clearly trying to move away from its partnership with Amazon and we believe it is using this move as a selling point to win new non-Amazon business.”

Cowen analyst Helane Becker said FedEx’s profit margin on Amazon shipments is probably in the “very low single digits,” and she believes the company can replace those packages with more profitable business from other retailers.

Amazon is growing its own fleet of air and ground transportation, giving it more control of how its packages are delivered while reducing its reliance on FedEx, UPS and the U.S. Postal Service. The Seattle-based company has leased jets, built package-sorting hubs at airports and launched a program to let its contractor drivers start their own businesses delivering packages in vans stamped with the Amazon logo.

Last month, FedEx warned for the first time in a government filing that Amazon’s fledging delivery business could lower prices, hurt its revenue and “negatively impact our financial condition and results of operations.”

It was a departure from previous statements by FedEx officials — and those at UPS — who have long downplayed the idea that Amazon could become a competitor in the delivery business. They noted that it took many years and billions of dollars for their companies to build extensive, worldwide networks of planes and delivery trucks.

“I mean, we look at Amazon as a wonderful company and service, and they’re a good customer of ours,” said FedEx Chairman and CEO Fred Smith during an earnings call in December. “We don’t see them as a peer competitor at this point in time. For many reasons, we think it is doubtful that that will be the case.”

In a regulatory filing in February, Amazon tweaked the description of its business to say that competitors include transportation companies so FedEx “is taking them at their word and dropping them as a client,” Becker said.

“We think (FedEx) is treating Amazon like any other competitor. They wouldn’t carry competitor packages, like UPS, so why would they carry Amazon packages?” she said.

Amazon spent $27.7 billion on sorting and shipping costs last year, up from $16.2 billion two years earlier. Amazon doesn’t say how much of its packages flow through FedEx, but it’s likely a much smaller amount compared to UPS and the U.S. Postal Service.

FedEx said that Amazon made up just 1.3% of its total revenue in 2018, or about $850 million.

“Nothing but respect for FedEx but they were very small piece of our network and vice versa, we wish them nothing but the best (conscious uncoupling at its finest),” tweeted Amazon executive Dave Clark, who oversees the company’s warehouses and delivery business. “We have great strategic partners who are part of our long term plan and we appreciate what they do for customers.”

Besides building its own delivery business, the online retailer wants to drop off packages to its shopper’s doorsteps even faster, which is proving to be a bigger expense than expected. Last month, Amazon admitted it would cost more than the $800 million it had said it would spend to switch its Prime two-day delivery promise to one-day delivery. The higher costs were related to reconfiguring its warehouses and moving products and goods to facilities that were closer to its customers.

Analysts said FedEx would still have a role in moving some Amazon packages, but it would be an even smaller part of its business.

“This will make it not worth mentioning,” said Stifel analyst David Ross, in a note to clients.

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The Nation

CDL Meals offering special promotion for driver appreciation week

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CDL Meals are chef developed using wholesome, organic ingredients and offer a flavorful balanced meal that includes protein, carbs, and vegetables. (Courtesy: CDL MEALS)

ANAHEIM, Calif. — CDL Meals, the division of Fresh n’ Lean that focuses on nutritious offerings for truck drivers, is offering a special promotion to help transportation companies celebrate National Driver Appreciation Week.

For National Truck Driver Appreciation Week (NTDAW), fleet operators can purchase discounted meals and receive free Hot Logic heating bags.

There is a minimum purchase of 50 meals required to receive the free bag. Purchases of 100 meals receive two free bags.

Companies can also purchase gift cards for drivers to buy meals at their convenience. Orders are being taken through August 30.

The annual NTDAW, taking place this year September 8-14 commemorates and honors all professional drivers for their hard work and commitment to one of the country’s most demanding jobs.

“We are proud to support drivers across the country with delicious food that encourages better health,” said Bob Perry, director of CDL Meals. “This special promotion gives fleets a chance to support their drivers with something that’s good for them, too.”

The nature of truck driving can also lend itself to a less than healthy lifestyle, which is why CDL Meals focuses solely on this underserved profession.

CDL Meals are chef developed using wholesome, organic ingredients and offer a flavorful balanced meal that includes protein, carbs, and vegetables. The meals are delivered fresh and can be refrigerated for up to seven days. The vacuum sealed trays can be heated quickly and enjoyed any time. Along with the meals, CDL provides a driver wellness education booklet with tips and suggestions to improve your health with easy lifestyle changes. Meals are $10 each for purchases up to 100 meals, with cost savings when purchasing more than 150 meals.

CDL Meals was launched earlier this year and was a beneficial part of the healthful transformation for Danny Jewell, 2018 Owner/Operator of the Year, who lost more than 25 pounds with the meal plan and coaching from Bob Perry, the Trucker Trainer.

With more than 50 years on the road and 6 million miles without an incident, Jewell was recognized for his professionalism and commitment to the industry.

 

 

 

 

 

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Safety council says motor vehicle deaths in 2019 projected to go below 40,000

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The estimate for 2019 caps a three-year period in which roadway deaths topped 40,000 each year for the first time since the mid-2000s. (©2019 FOTOSEARCH)

ITASCA, Ill. — Preliminary estimates from the National Safety Council indicate the four-year upward trend in motor vehicle deaths that began in 2015 is ebbing with the number of fatalities in the first six months of 2019 dropping 3 percent compared to the same six-month period in 2018.

An estimated 18,580 people died on U.S. roadways between January and June of this year, compared to the council’s revised estimate of 19,060 during the same period last year. An additional 2.1 million people are estimated to have sustained serious crash-related injuries during the first six months of 2018 – a 1 percent drop from 2018 six-month projections.

The estimate caps a three-year period in which roadway deaths topped 40,000 each year for the first time since the mid-2000s.

A total of 118,315 people died on the roadways between 2015 and 2017, and an estimated 40,000 additional people perished last year.

However, drivers still face the same fatality risk this year as they did when fatalities were eclipsing 40,000 annually, because the estimated annual rate of deaths per miles driven has remained stable – NSC estimates 1.2 deaths per every million vehicle miles traveled, unchanged from 2018 rates.

“While the numbers indicate a slight improvement, the rate of deaths remains stagnant, and 18,580 deaths so far this year is unacceptable,” said Lorraine M. Martin, president and CEO of the National Safety Council. “We cannot accept death as the price of mobility. We urge all drivers to slow down, buckle up, pay attention and drive defensively.”

The council’s early estimates indicate significant progress in some states. In the first half of this year, several states have experienced at least a 10% percent drop in motor vehicle deaths, including Colorado, Illinois, Indiana, Louisiana, Missouri, Nevada, Oklahoma and Utah. A sample of states with increases through the first six months include Kentucky (6%), Hawaii (20%), Oregon (6%) and New Mexico (15%).

A complete list of state results is available here.

To help ensure safer roads, NSC urges motorists to:

  • Practice defensive driving. Buckle up, designate a sober driver or arrange alternative transportation, get plenty of sleep to avoid fatigue, and drive attentively, avoiding distractions. Visit nsc.org for defensive driving tips.
  • Recognize the dangers of drugged driving, including impairment from cannabis and opioids. Visit StopEverydayKillers.org to understand the impact of the nation’s opioid crisis.
  • Stay engaged in teens’ driving habits. Visit DriveitHOME.org for resources.
  • Learn about your vehicle’s safety systems and how to use them. Visit MyCarDoesWhat.org for information.
  • Fix recalls immediately. Visit ChecktoProtect.org to ensure your vehicle does not have an open recall.
  • Ask lawmakers and state leaders to protect travelers on state roadways. The NSC State of Safety report shows which states have the strongest and weakest traffic safety laws.
  • Get involved in the Road to Zero Coalition, a group of more than 900 organizations across the country focused on eliminating roadway deaths by 2050. Visit nsc.org/roadtozero to join.

The National Safety Council has tracked fatality trends and issued estimates for nearly 100 years. All estimates are subject to slight increases and decreases as the data mature. NSC collects fatality data every month from all 50 states and the District of Columbia and uses data from the National Center for Health Statistics, so that deaths occurring within one year of the crash and on both public and private roadways – such as parking lots and driveways – are included in the estimates.

Supplemental estimate information can be found here.

The NSC defines “serious” injuries as those requiring medical attention.

The National Safety Council uses data from the National Center for Health Statistics – an arm of the CDC – when calculating its estimates, because these data are the most comprehensive and inclusive numbers available.

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TTI report: Travel demand growing faster than system’s ability to absorb that demand

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COLLEGE STATION, Texas — If more Americans are working, a new report confirms, more of us are also tied up in traffic.

The picture is painted clearly in the 2019 Urban Mobility Report, published by the Texas A&M Transportation Institute (TTI).

Along with illustrating the problem, researchers also stress the same straightforward solutions they’ve long advocated: more of everything — roads, transit, squeezing as much efficiency out of the existing system as possible, reducing demand through telework, better balancing demand, and roadway capacity by adjusting work hours, and smarter land use.

“No single approach will ever solve this complex problem,” said Tim Lomax, a report author, and Regents Fellow at TTI. “We know what works. What the country needs is a robust, information-powered conversation at the local, state and national levels about what steps should be taken. We have many strategies; we have to figure out the right solution for each problem and a way to pay for them.”

The United States added 1.9 million jobs from 2016 to 2017 — slower growth than the 2.3 million-plus growth in four of the five previous years, but more than enough to exacerbate the nation’s traffic woes. TTI’s gridlock data extends back to 1982, when Ronald Reagan was in his first term, a postage stamp cost 20 cents, and gas was about $1.25 a gallon. Since that time, the number of jobs in the nation has grown almost nonstop by just over 50 percent to the current total of 153 million.

Furthermore, since 1982:

  • The number of hours per commuter lost to traffic delay has nearly tripled, climbing to 54 hours a year.
  • The annual cost of that delay per commuter has nearly doubled, to $1,010.
  • The nationwide cost of gridlock has grown more than tenfold, to $166 billion a year.
  • The amount of fuel wasted in stalled traffic has more than tripled, to 3.3 billion gallons a year.

“The value of investing in our nation’s transportation infrastructure in a strategic and effective manner cannot be overstated as these added costs impact our national productivity, quality of life, economic efficiency and global competitiveness,” said Marc Williams, deputy executive director of the Texas Department of Transportation, which funded the TTI research. The 2008–2009 recession produced only a brief pause in traffic congestion growth, which bounced back at an even quicker pace than associated job recovery.

The result of today’s urban congestion is that the average freeway traveler has to allow almost twice the expected trip duration to ensure dependable arrival for time-sensitive things like medical appointments, day-care pickup, and airline flights compared to what would be required without congestion. Instead of the 20 minutes needed in light traffic, it’s best to plan a 34-minute trip.

“Those minutes don’t sound like much, but they add up quickly over a year,” says David Schrank, a TTI senior research scientist, and report author. “Eventually, we’re talking billions of wasted hours, and the cost of delay at that scale is just enormous.” Simply put, travel demand is growing faster than the system’s ability to absorb that demand. Once considered a problem exclusive to big cities, roadway gridlock now afflicts urban areas of all sizes and consumes far more of each day, making “rush hour” a long-outdated reference.

“The problem affects not only commuters, but also manufacturers and shippers whose travel delay costs are passed on to consumers,” said Bill Eisele, a report author, and TTI senior research engineer. “While trucks constitute only 7 percent of road traffic, they account for 12 percent of congestion cost.”

Researchers emphasize that it’s urgent for the nation to develop consensus on specific strategies for each urban travel corridor now, since major projects, programs, and funding strategies take a decade or more to develop and bear fruit.

Almost every strategy works somewhere and in some situations, they say, and almost every strategy is the wrong idea in certain places at certain times. Using a balanced and diversified approach that focuses on more of everything — tempered by realistic expectations — is the best way forward.

The 2019 Urban Mobility Report examines conditions in 494 urban areas across all states and Puerto Rico. The research was supported by INRIX, a leading provider of transportation data and analytics.

For a nationwide interactive map of congestion conditions visit https://mobility.tamu.edu/umr/

 

 

 

 

 

 

 

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