FedEx Rises Most Since November on E-Commerce Efficiency Plan
- Overnight unit to hand off some packages to ground business
- Move is part of CEO Smith’s strategy to compete for e-commerce
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FedEx Corp. rose the most in three months after saying it plans to hand off some deliveries from its overnight division to its separately-run ground business, attempting to wring more profit from surging e-commerce.
The arrangement is part of Chief Executive Officer Fred Smith’s strategy to tackle the flood of residential packages from online shopping, which can be more expensive to handle than commercial goods because fewer items are left at each stop. By having Express hand off less time-sensitive parcels to its Ground unit for final delivery, the company will reduce cases in which a driver from both units visit the same customer.