Holidays Spell Good News For Fedex (FDX)
November 11, 2009 11:04 AM
Fedex (NYSE: FDX) expects better business during the holiday season. It expects to ship around 13 million packages on Dec.14, the expected busiest day, up more than 8% as compared to last year.
Fedex ships almost 7.5 million packages daily and it has benefited from the decision of DHL USA to withdraw from the US market. UPS too expects to hire 50,000 temp workers in the US from Thanksgiving till year end. In 2008, both Fedex and UPS could not issue busiest day forecasts due to economic uncertainty. The trend this year however, seems to signal a turnaround.
US retailers, being cautious, are however offering free shipping that helps Fedex and UPS. Retail figures seem to be encouraging too as people are actually buying and not just browsing. In another concern, the IRS has determined that Fedex doesn’t owe any taxes or penalties due to using independent contractors in the period 2004-06. This does not stop Fedex from facing many lawsuits due to employment classification of its delivery drivers.
