The FedEx and ecommerce relationship is changing
In a reminder that digital sales can face real world obstacles, FedEx is attempting to strong-arm some ecommerce shippers as the surge of holiday shopping packages becomes increasingly difficult to manage.
Executives at the package delivery giant, with quarterly profits squeezed by its spending on new facilities and staffing to handle peak holiday volumes, said they are intent on forcing some customers to pay higher prices, and even dropped some retailers who would not comply, according to The Wall Street Journal.
You can get a lot of volume that is completely non-compensatory and just not make any money, said Fred Smith, chief executive at FedEx, to the WSJ.
The expenses of FedEx outpaced revenue in both the FedEx Ground and FedEx Freight businesses in the quarter ended Nov. 30.
As a result, the company's operating profit margin shifted down to 7.8%, as compared to the 9.1% in the same period a year earlier.