Global Package Business Lures Expansion Opportunity

Global package business

For businesses that seek to grow and flourish, there’s no better way to accomplish the task than to reach new customers. That’s the concept behind a recent move by a package shipping business to build a new facility in a foreign country.

To better serve its customers in Canada and reach a wider audience, FedEx has constructed a new 27,000 square-foot facility in Saskatoon to provide shipping services to local businesses. The move is part of a continuing expansion effort into Canadian territories to lure new customers away from the competition. FedEx has also trained its Canadian Express staff with a specific focus on small to medium sized businesses to capitalize on the lucrative export market.

Besides adding to its infrastructure in other countries, FedEx is also acquiring foreign businesses to expand its operations. In 2011, the company acquired Servicios Nacionales Mupa, a Mexican domestic express package business, for $128 million. In that same year, it also purchased AFL Pvt, Ltd, an Indian logistics, distribution and express company, for $96 million. FedEx also recently acquired other shipping companies in Poland, France, and Brazil.

With international priority and domestic package revenue exceeding $9.56 billion in 2012, FedEx is likely to continue its efforts toward increasing globalization.

Do you think USPS should expand its package operations into other countries to take advantage of the robust trend in global shipping?

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Online Purchases a Winter Wonderland for Shippers

With December just around the corner, early shoppers have already begun looking for great sales, hard-to-find items, and decorative holiday gear to get ready for the big day. Taking to streets to battle crowded stores is becoming less of an issue these days as more people search for items on their shopping list online.

Modern technology, such as smart phones and tablet PCs, have made the process of gift-buying easier and more accessible than ever. It’s expected that online shoppers will spend nearly $55 billion on purchases made on their Internet-accessible devices this season. That’s almost a quarter of all sales in the United States during the holiday crunch time, and close to $8 billion more than the same period last year.

The Postal Service expects to ship 15.2 billion cards, letters and packages between Thanksgiving and Christmas Eve. A good portion of that volume consists of Internet purchases. With a sustained climb in Internet sales predicted for the foreseeable future, the resulting increase in demand for package delivery services will continue to be a great growth opportunity for shippers. That increase in demand will entice new competitors to enter the market and stake a claim for their own share of the lucrative business.

We’ve already seen companies such as Amazon.com, Wal-Mart, and eBay looking to take advantage of this trend by starting their own package services. It may not be long before other companies seek to enter this growing industry as well.

What other businesses to you think will attempt to enter the shipping industry?

  • Hello, I'm Benny the Blogger: I'm the world's most famous postal employee. My hobbies are snappy quotes, kite flying and publishing. I was born Jan. 17, 1706, but don't call me old.

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