UPS, FedEx Search for an Edge (UPS, FDX, TGT, KSS, WMT, AMZN, EBAY, GOOG)
October 30, 2012 by Paul Ausick
Package delivery giant United Parcel Service Inc. (NYSE: UPS) said yesterday that it plans to hire 55,000 seasonal workers to sort, load, and help deliver packages during the coming holiday season. The total matches the number that UPS hired last year and that the company had been expected to hire again this year.
Competitor FedEx Corp. (NYSE: FDX) aid last week that it would hire 20,000 seasonal workers this year, the same number it hired in 2011.
Among other big retailers Target Corp. (NYSE: TGT) has said it will add 80,000 to 90,000 jobs this holiday season, Kohl’s Corp. (NYSE: KSS) will add more than 52,000 seasonal workers, and Wal-Mart Stores Inc. (NYSE: WMT) will add about 50,000. Amazon.com Inc. (NASDAQ: AMZN) expects to hire more than 50,000 at its 40 distribution centers in the U.S.
FedEx raised its shipping volume estimate by 13% for this year’s holiday season and UPS raised its estimate by about 10%. UPS expects to handle a record 527 million packages this holiday season, while UPS forecasts more than 280 million shipments. Both companies expect shipments from online sales to grow this year.
FedEx is also going to team up with eBay Inc. (NASDAQ: EBAY) in a program the company hopes will beat back the Amazon Prime shipping deal. Amazon is also testing a same-day delivery service in San Francisco, as is Google Inc. (NASDAQ: GOOG) and Walmart, which has also partnered with eBay on the same-day service. Walmart has been testing same-day service in other markets as well.
UPS, still embroiled in its efforts to complete its $6.7 billion takeover of European delivery service TNT Express NV, may be distracted by the planned acquisition, which is why some analysts are boosting their outlook on FedEx.
But there are a lot of wheels within wheels in package delivery services, even if the services are localized in the San Francisco area. The outcome there is probably as important to the medium-term performance of the delivery firms as is the number of holiday packages that are handled.
Paul Ausick
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