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The growth in online shopping is really boosting profit at FedEx. The company plans to hire more than 50,000 extra workers to handle what is shaping up as another record year for holiday-season package deliveries.
According to the Associated Press (AP.com), that’s up from about 40,000 temporary holiday workers hired in 2013.
The hiring plan from FedEx Corp. came a day after rival UPS said it would hire up to 95,000 seasonal workers. Both companies are trying to avoid the problems that plagued them last year, when they were inundated by more holiday shipments than they expected and some packages didn’t arrive until after Christmas.
FedEx Corp. announced that it earned $606 million in the June-through-August quarter, up 24% from the same period in 2013. The results beat expectations, and the stock rose more than 3% in afternoon trading.
CEO and Chairman Fred Smith said the company was helped by strength in the ground-shipping segment, solid volume and revenue increases at the freight division and growth in U.S. volumes for the core FedEx Express business.
On a conference call with investors, Smith said,
"We expect continued revenue and earnings growth in fiscal year ’15 (which ends next May); assuming moderate global economic growth and stable fuel prices."
The holidays are a crucial part of the year for FedEx, and the company will again be challenged by a compressed peak season. Thanksgiving, the traditional kickoff to the season, falls late again this year, Thursday, November 27th. That will push so-called Cyber Monday, one of the biggest days for online shopping, back to December 1st.
Executive vice president Michael Glenn said FedEx expects another record season for delivery volumes, and that explains the plan to hire more temporary drivers, package handlers and other workers.
Both FedEx and UPS were caught short last holiday season. FedEx had announced it would hire 20,000 temporary workers, but wound up adding twice that number, a spokesman said Wednesday.
United Parcel Service, Inc. planned to add 55,000 seasonal workers but ended up hiring 85,000.
FedEx officials said they are talking with retailers about other steps to avoid a repeat of last year’s delivery problems, but they declined to detail those discussions.
