By Mary Jane Credeur
Nov. 10 (Bloomberg) -- FedEx Corp., the second-largest U.S. package-delivery company, projected handling about 8 percent more shipments on its busiest day before the Christmas holiday amid “positive signs” for the economy.
More than 13 million shipments will move on Dec. 14, up from 12 million on 2008’s peak on Dec. 15, FedEx said today in an e-mailed statement. That would be a daily record, and the gain would exceed last year’s increase of about 6 percent.
The forecast is an “encouraging” holiday-season signal, said Mike Glenn, executive vice president of market development. Laptops, mobile phones and e-mail devices will be popular gifts, as will staples such as clothing, he said, citing conversations with retailers.
“The levels of expectation are a bit higher” for shipments around Christmas, Glenn said in a telephone interview. “Positive signs” for the economy include recent growth in U.S. gross domestic product and industrial output, he said.
FedEx’s volume projection of more than 50 million packages for the week of Dec. 14 would be an 11 percent increase over 2008, based on figures from Carla Boyd, a spokeswoman for the Memphis, Tennessee-based company.
Forecasts Resume
The forecast resumed FedEx’s tradition of estimating the date and size of its busiest day, after suspending the practice in 2008 as the U.S. recession deepened. United Parcel Service Inc., the biggest package shipper, plans to issue a holiday projection this month.
Revenue for FedEx’s fiscal third quarter, which includes December, may be little changed at $8.1 billion, according to the average of 13 analyst estimates compiled by Bloomberg. That would end four straight quarters of declining sales, based on FedEx’s recent results and analysts’ projections.
FedEx rose 91 cents, or 1.1 percent, to $82.13 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 28 percent this year, outpacing the 21 percent increase for the Standard & Poor’s 500 Index.
FedEx expects to hire 14,000 seasonal workers, Boyd said in an e-mail. She didn’t immediately have a comparable 2008 figure. The company hadn’t identified last year’s peak shipping day until today.
UPS plans to hire about 50,000 seasonal workers for the holidays, which is “a little below what we normally do,” Chief Financial Officer Kurt Kuehn told investors on an Oct. 22 conference call. Two years ago, the Atlanta-based company brought in 60,000 seasonal employees and handled 22 million packages on its busiest day.
UPS’s Outlook
Discussions with companies including Wal-Mart Stores Inc. and Costco Wholesale Corp. suggest that they’re more “bullish” on their Christmas business than are high-end retailers, UPS Chief Executive Officer Scott Davis said in a Nov. 6 interview.
“We’ve talked to a lot of customers over the last couple months and have got a mixed bag,” Davis said. “We certainly don’t think it’s going to be a robust season. We feel OK about what we’re seeing for the holiday season.”
Procrastination among consumers sending gifts and a shrinking window for peak shipping demand are making it harder to forecast when deliveries will crest, Davis said.
“Peak used to be four or five weeks and now it’s seven or eight days because it’s getting more compressed,” Davis said.
To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.
Last Updated: November 10, 2009 16:25 EST
HOME
