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FedEx Sees Shipment Peak on Cyber Monday as E-Commerce Grows

FedEx Corp. (FDX) projects its busiest shipping day this holiday season will be Cyber Monday, Dec. 2, with online retailers driving an 11 percent increase from 2012 to produce the company’s highest volume in history.

FedEx, operator of the biggest cargo airline, forecasts more than 22 million shipments will move through its global network on Cyber Monday, according to a statement today. The Dec. 2 date is the earliest peak day since at least 2007, the company said. For the past six years, the busiest day has fallen in the middle of December.

“What we’re clearly seeing is the effect of e-commerce,” Raj Subramaniam, executive vice president of marketing and communications, said in a telephone interview. Cyber Monday was the second-busiest day last year, Subramaniam said.

For the past two years, Cyber Monday has generated the most sales of any day in the week after Thanksgiving, according to ComScore Inc. (SCOR) The day’s volume totaled $1.5 billion last year, a 15 percent increase from 2011.

More consumers have turned to online venues for holiday shopping, boosting an e-commerce growth rate that’s outstripping brick-and-mortar retail. In the second quarter of 2013, e-commerce spending increased 18.4 percent from a year earlier, while total retail sales rose just 4.7 percent in that period, according to the U.S. Department of Commerce.

Shopping Earlier

FedEx’s predicted peak volume includes pickups on Cyber Monday as well as orders that are entered over the Thanksgiving holiday and are processed that day, Carla Boyd, spokeswoman for the Memphis, Tennessee-based company, said in an e-mail.

Besides the growth in e-commerce, FedEx’s peak shipment date also reflects an earlier start to the holiday shopping season, said Simeon Siegel, a New York-based analyst at Nomura Securities. Over the last few years, competition has driven some stores to open their doors on Thanksgiving, not waiting for Black Friday, Siegel said in a telephone interview.

“People are shopping earlier because they’re seeing deals earlier, because retailers are promoting earlier,” Siegel said.

FedEx estimates more than 85 million shipments for the entire week, Dec. 1-7. That would be a 13 percent increase from last year’s busiest week, according to the statement.

More Seasonal Workers

The company plans to hire more seasonal workers than last year, when it added 20,000, to handle the additional volume, spokeswoman Parul Bajaj said in an e-mail on Oct. 10. The National Retail Federation forecasts holiday sales will increase 3.9 percent this year to $602.1 billion, even with economic uncertainty and customers taking a “conservative approach” to spending.

FedEx beat profit estimates in its most recent quarter after moving lower-priority packages to cheaper transportation methods, such as ocean shipping.

United Parcel Service Inc. (UPS), the world’s largest package-delivery firm, hasn’t issued a holiday forecast yet.

To contact the reporters on this story: Caroline Chen in New York at cchen509@bloomberg.net; Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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