FedEx shared a few words of wisdom today about tech giants who think they can find cheaper or more efficient ways of delivering packages than the global leader.
Earlier this week, it was reported that Amazon was gearing up to release a mobile application that would ask ordinary people to drop off packages on their way to other destinations. The model would be similar to other crowdsourcing companies, like Uber or Postmates, which are also trying to provide fast, low-cost delivery services at the local level.
But during FedEx’s quarterly conference call today, FedEx EVP Mike Glenn disregarded the competition, saying that the “extremely capital intensive” nature of building a shipping network and the “sophisticated information technology” involved are huge barriers to entry, reports USA Today.
Without every naming Amazon or Uber directly, he also questioned whether consumers would accept getting packages from ordinary people, who aren’t in uniform or driving branded trucks.
In response to questions about new tech competitors, he said: “Research has indicated time and time again that a uniformed person with proper identification showing up at your doorstep is an important issue for customers. So when you talk about the challenges of building a network, the scale, the input costs, the technology issues and the customer experience required to deliver what customers expect of companies like FedEx and our primary competitors, it’s a pretty tall hill to climb.”
Clearly, the 42-year-old company has a huge head start. Even though the latest quarterly results missed Wall Street expectations, and it reported a loss of $895 million, or $3.16 per share, revenue totaled $12.1 billion for the quarter.
Glenn concluded his thoughts by saying: “We continue to monitor these situations and opportunities that pop up from time to time. But we feel pretty comfortable in terms of our strategy going forward and our ability to serve the e-commerce market and our customers.”
