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FedEx Idea Proposal (FDX)

FedEx Idea Proposal (FDX)
 

Will FedEx’s new fulfillment service be successful enough to take market share from Fulfillment by Amazon?

Report Available:March 16, 2017

 

Blueshift’s initial research finds FedEx aggressively entering the fast growing ecommerce fulfillment-as-a-service (FaaS) business for small and midsize companies with FedEx Fulfillment.  This new service will compete directly with its partner, Amazon, which offers the popular and rapidly expanding Fulfillment by Amazon (FBA) solution.

 

Observations

  1. Ecommerce sales continue to grow at a rapid pace requiring retailers of all sizes to provide robust ecommerce shopping and fulfillment services to its customers. FedEx’s Feb. 7 announcement that it is expending its FedEx Supply Chain services to include an ecommerce solution, called FedEx Fulfillment, which will help small and medium-sized businesses fulfill orders from multiple channels including websites and online marketplaces, and manage inventory for their retail stores. This is an effort by FedEx to further penetrate this growing market which has be dominated by it shipping partner Amazon.
  2. Fulfillment by Amazon is the market leader in FaaS and is the fastest growing segment of the company’s business. In January, Amazon announced that it delivered more than 2 billion items for third-party sellers worldwide in 2016 through its Fulfillment by Amazon (FBA) service. FBA’s shipments grew 50% over the holidays and sellers taking advantage of the store, pick, pack, and ship grew by 70% in 2016. Part of FBA’s incredible growth is the 80% increase in units shipped outside the U.S. in 2016.
  3. A review of top fulfillment companies for small business included Fulfillment by Amazon as one of the top service providers along with ShipBob, RedStag and Fulfillmentcompanies.net. Fullmentcompanies.net is a fulfillment company matchmaker that has over 500 different affiliate companies to suggest for a small business looking for growth through ecommerce, suggesting that fulfillment is a highly specialized and competitive market.
  4. The growth of the tech-enabled logistics provider and mastering ecommerce logistics are two of the top four trends that will shape the industry in 2017.Technology plays an integral role in the supply chain as shippers and carriers continue to rely on providers for tech leadership. As a result, smart logistics providers are increasingly valuable in tying transportation management systems with tracking platforms and inventory management. With the U.S. experiencing the highest ecommerce penetration in history, consumer expectations are now focused on next-day or same-day delivery as the norm, changing retailers’ delivery policies and deadlines. Both these trends are potential growth drivers for FedEx Fulfillment.

 

How quickly will FedEx be able to ramp FedEx Fulfillment? Will FedEx have a significant effect on the fulfillment industry? Will FedEx Fulfillment challenge Fulfillment by Amazon? How will FedEx’s entry into the fulfillment market affect its shipping relationship with Amazon? Is there room enough for both fulfillment companies to thrive? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Small and Midsize business using FedEx Supply Chain services, Fulfillment by Amazon customers, 3PL Competitors and their clients, and Logistics experts.

 

Companies: Amazon.com Inc. (AMZN),FedEx Corporation (FDX)

 

Research Begins: Feb. 27, 2017