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Industry News

FedEx sues the US government over the ‘impossible’ task of policing exports to China – CNBC

  • FedEx sued the U.S. government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies.
  • The move came after FedEx reignited Chinese ire over its business practices when a package containing a Huawei phone sent to the U.S. was returned last week to its sender in Britain, in what FedEx said was an “operational error.”
  • FedEx’s suit and delivery error come against a backdrop of increasing tension between the world’s two biggest economies.
  • The U.S. and China have been engaged in a trade fight for nearly a year on issues such as tariffs, subsidies, technology, regulations, and cybersecurity.
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Industry News

FedEx slashes two-day air prices to match ground rates to fill its planes – Marketwatch

FedEx Corp. is offering big discounts to woo online merchants to its air network as it seeks to refashion a delivery system ill-equipped for the rise of e-commerce.
The shipping giant, which is ending an air-shipping contract with Amazon.com Inc. later this month, is cutting prices for some customers of its Express network, according to people familiar with the matter. That includes offering guaranteed two-day air service for the same price as shipping items through its Ground division, the people said.
The deals are being given to try to win over shippers from FedEx rival United Parcel Service Inc. and to get them to switch from what has historically been a lower-price shipping option in FedEx Ground, these people said.
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Industry News UPS News

Despite talk of budding rivalry, Amazon and UPS may find they’re stuck with each other – Freightwaves

For all its symbolism, FedEx Corp.’s (NYSE:FDX) June 7 announcement that it would not renew its U.S. air delivery contract with Amazon.com, Inc. (NASDAQ:AMZN) was relatively small potatoes. The decision only affects $150 to $200 million in annual revenue for Memphis-based FedEx, whose fiscal year 2019 top-line will approach, if not exceed, $70 billion.

The real story, instead, may percolate some 400 miles to the southeast in Atlanta, home of UPS Inc. (NYSE:UPS). Unlike FedEx, which had little to lose by dumping the domestic flying portion of its Amazon business, UPS has much more at stake. Amazon tendered 397 million parcels to UPS last year, the vast majority of which were delivered by UPS’ ground network, according to data from ShipMatrix, Inc., a consultancy. By some estimates, Amazon accounts for 5 to 8 percent of UPS’ $72 billion in annual revenue, compared with 1.3 percent for FedEx prior to its recent move. UPS is more deeply involved in e-commerce than is its rival, elevating the importance of its arrangement with Seattle-based Amazon, which, depending on the source of the data, has around a 40 to 50 percent share of U.S. e-commerce.
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Industry News UPS News

Is Amazon Air becoming a bigger competitive threat for UPS and FedEx? – Louisville Business First

And so the competitive threat gets bigger.

Seattle-based Amazon.com Inc. announced Tuesday that it would lease an additional 15 Boeing 737-800 cargo aircraft to add to its cargo fleet. That’s in addition to five other 737-800s that it already leases. The new aircraft will fly in the U.S. out of the more than 20 air gateways in the Amazon Air network.

“These new aircraft create additional capacity for Amazon Air, building on the investment in our Prime Free One-Day program,” Dave Clark, senior vice president of worldwide operations at Amazon, said in a news release. “By 2021, Amazon Air will have a portfolio of 70 aircraft flying in our dedicated air network.”

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Industry News

USPS changes parcel pricing strategy; shipper impact unclear – Freightwaves

On June 23, the U.S. Postal Service (USPS) implements a pricing change that subjects more parcels to rates pegged to their dimensions instead of their actual weight. What impact, if any, this has on the USPS shipper universe won’t be known for months.

Under the new policy, USPS will, for the first time, price parcels which measure more than 1 cubic feet – or 1,728 cubic inches in multiplied length, width and girth – and which move less than 600 miles by the higher of either its “dimensional” or actual weight. Currently, all parcels moving less than 600 miles are exempt from dimensional pricing. Also on June 23, each parcel measuring more than 1 cubic foot and moving more than 601 miles will be priced using a new “divisor” that calculates dimensional pricing, better known in the industry as “DIM.” The divisor will be reduced to 166 from 194.

USPS will not apply dimensional on any parcels measuring less than 1 cubic foot.