Fox Business reports that FedEx "is spending big on improvements to its ground delivery segment to keep pace with increased demand from leading retailers, including Amazon Inc. and Walmart. The story says that FedEx "forecasts capital spending of $5.1 billion in 2017, with $2 billion dedicated to further expansion of ground shipment facilities," this after spending "$4.8 billion in its 2016 fiscal year."
The story notes that FedEx's expenditures have proven to be something of a drag on overall results, "FedEx’s continued emphasis on ground expansion has begun to pay off. FedEx Ground revenue grew 20% to $4.29 billion in the 2016 fiscal year. Alan Graf, FedEx’s executive vice president and CFO, said the company is 'expanding Ground as rapidly as we can' to meet increased shipping demand."
The story notes that FedEx's expenditures have proven to be something of a drag on overall results, "FedEx’s continued emphasis on ground expansion has begun to pay off. FedEx Ground revenue grew 20% to $4.29 billion in the 2016 fiscal year. Alan Graf, FedEx’s executive vice president and CFO, said the company is 'expanding Ground as rapidly as we can' to meet increased shipping demand."
- KC's View:
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FedEx is facing a world in which Amazon has declared its intention to take greater control of the shipping function, and we all know that Walmart will do anything it can to save money in the supply chain. For FedEx to continue to get their business, it has to continue investing in being faster, better and stronger.
