specialreport
E-commerce spurs
air express
demand
W
hen Fedex declared its
first quarter earnings
earlier this month, one
thing was certain - the rise
of e-commerce, particularly over the past
several years, has presented the air express
industry with an unparalleled growth opportunity.
As the e-commerce and online marketplaces continue to take centre-stage, the
e-commerce industry has been and will
continue to be a major growth driver for
the air express industry in the future.
In e-commerce, since vendors have
to ship orders fast, the demand for air
cargo services has gone up considerably.
18
| OCTOBER 2016
It is no secret the e-commerce
industry is growing at an unbelievable
rate -and the air express market is at
the very core of it all.
As geographic borders do not restrict
online retailers, shipping products by air
will result in quicker deliveries. The ability
of this mode of transportation to move
goods from one location to another
within a short span of time will result in its
increased popularity among end users.
According to Forrester Research, with
estimations of total online sales growing at
an average annual rate of 9.3 percent over
the next five years, surging to $523 billion by
2020 from $335 billion in 2015, the growth
in e-commerce in various other economies
including China, India and Europe present
a level playing field for international players
such as FedEx, DHL and UPS.
www.stattimes.com
Surya Kannoth
In fiscal 2016 alone, FedEx invested $1.6
billion in automated hubs in California
and Florida to handle the growth in ecommerce shipments. With 19 additional
automated stations, the company now has
68 automated stations and 35 automated
hubs.
“It’s imperative that we continue investing for profitable growth by expanding our network capacity to match the
predicted increase in e-commerce shipments,” wrote FedEx chairman, president
and CEO Fred Smith in a letter that accompanied the company’s recently released
annual report.
FedEx also continues to seek dominance