business news in context, analysis with attitude

The Wall Street Journal reports that FedEx CEO Fred Smith blamed "sloppy shipping practices" for at least some of the problems during last year's holiday shopping season that caused some customers not to receive packages on time and FedEx to see its Q3 profit shaved by $125 million.

Retailers, Smith said, "claimed that packages had been tendered to FedEx and rival United Parcel Service Inc. or delivery to their customers before they actually were. In addition, labels were often affixed incorrectly or items weren't properly packaged and subject to damage, the executive added, sounding like the Marine Corps veteran that he is, while speaking on an earnings conference call with analysts."

The Journal writes that "retailers' shortcomings on their side of the delivery equation 'is a big part of the e-commerce business that really didn't get enough publicity last year because they were an integral part of the problem even more than the weather and the carrier performance,' the FedEx chief said.

The story notes that Smith did not name the prime offenders, and major e-commerce companies including Amazon and Walmart did not comment on the accusations.
KC's View:
A couple of thoughts here…

First of all, it is important to remember that Smith is criticizing his customers … which is not always a good way to go. I'm not suggesting that the customer always is right, but taking shots at them isn't always the best way to cement positive relationships.

In fact, I'm sure that there were plenty of cases in which the retailers screwed up. But I'm also reasonably sure that this is precisely why we're hearing a lot of speculation about Amazon wanting to use its own fleet of trucks to service the nation's top 20, 30, even 40 markets … so it has greater control over the process. We'll only have Amazon to blame, and Jeff Bezos no doubt thinks that he can do it better.