FedEx offers discounts to lure online customers|Three News
FedEx offers discounts to lure online customers
FEDEX Corp is seeking to attract online merchants with significant discounts as it looks to adjust its delivery system to cope with the boom in e-commerce demand that more often requires delivery over comparatively shorter distances.
The shipping giant,which is ending an air-shipping contract with Amazon.com Inc that accounts for 1.3 per cent of FedEx's annual revenue,is offering guaranteed two-day air service for the same price as shipping items through its Ground division for some customers of its Express network,according to people familiar with the matter,reported The Wall Street Journal.
The deals aim to win over shippers from FedEx rival United Parcel Service Inc(UPI)and to encourage them to switch from what has traditionally been a lower-price shipping option in FedEx Ground,the sources said.
FedEx is grappling with how the Express air network fits in a shipping economy increasingly dominated by online orders for everything from toothpaste to T-shirts.Founder and chief executive Fred Smith launched the Express unit four decades ago to ferry shipments,such as legal documents and medical supplies,over long distances.
The company predicts growth in online shopping will double the number of packages shipped in the US to 100 million per day by 2026.It is trying to capitalise on that growth after initially balking at handling too much of the lower-margin e-commerce shipments.
A FedEx spokeswoman said the company hasn't changed its pricing strategy and added that the two-day Express service"has been very successful and continues to deliver tremendous value to small and medium businesses competing in the e-commerce market".
The problem for FedEx is that its legacy air network,where shippers pay premiums to have goods delivered by 8 am or 10.30 am,wasn't built for e-commerce.
For customers ordering online,it is more important to deliver shipments by a particular day rather than by a particular time.
The e-commerce revolution also has put distribution centres much closer to where people live,reducing the need for quick,cross-country flights to meet delivery commitments.Some retailers also use neighbourhood shops to pack and ship orders placed online,so their shipments travel dozens,not hundreds,of miles.
FedEx expects that delivery distances will continue to contract."We know the vast majority of growth will be fulfilled and delivered in the same metropolitan area,"FedEx chief marketing officer Brie Carere said in an interview.
The company still needs cargo for its planes,and one way it is luring customers is with the discounts.Its domestic Express business has already seen yields,or the average revenue per package,drop by two per cent to US$17.93 in its third quarter.
That was led by a decline in its deferred shipments,which includes two-and three-day deliveries but excludes the costly overnight deliveries by aircraft.The yield there decreased 5.7 per cent year on year to$14.76 a package.The decline was attributed to a higher number of lighter,smaller e-commerce packages.
Discounting air shipments to close to what FedEx charges in its Ground network would drive yields down further.FedEx Ground's yield was$8.87 in the third quarter.
Containerships deploys 2nd LNG-powered ship on Europe-Baltics route
CONTAINERSHIPS,a subsidiary of French shipping giant CMA CGM,has deployed its second containership powered by liquefied natural gas(LNG),the 1,380-TEU vessel Containerships Polar,alongside sister vessel Containerships Nord on the revamped BALT 2 service that links ports in northern Europe to the Baltic states and St Petersburg,Russia.
The newbuild is fitted with 360 reefer plugs left Guangzhou Wenchong shipyard in China to sail to northern Europe at the beginning of May.The vessel's first LNG bunkering was performed at the port of Rotterdam was fueled with 200 tonnes of LNG via ship-to-ship bunkering,reported The Maritime Executive.
With transit times of three to five days,Containerships says the BALT 2 service offers a fast and highly reliable connection.
The port rotation of the BALT 2 service is:Teesport,Zeebrugge,Rotterdam,Helsinki,St.Petersburg,Riga,Gdynia,returning to Teesport.
Two more sister ships are due to be delivered this year:Containerships Arctic and Containerships Aurora.They are powered by dual-fuel LNG(10,080 KW)and are ice class vessels.
Head of HPH Trust Gerry Lim retires to be succeeded by Patrick Lam
HONG Kong-based container terminal operator Hutchison Port Holdings Management has announced changes in the company's top executive position.
According to the trustee-manager of Hutchison Port Holdings Trust(HPH Trust)CEO Gerry Yim Lui Fai will retire from his present position with effect from July 13,2019.
Succeeding him will be Patrick Lam Hing Man,currently the managing director of Yantian International Container Terminals Limited,Yantian International Container Terminals(Phase III)Limited and Shenzhen Yantian West Port Terminals Limited.
"The Board of the trustee-manager wishes to express its sincere gratitude to Mr Yim for his valuable contribution to HPH Trust during his tenure as the CEO of the Trustee-Manager,"the company concluded.