FedEx Corp. (NASDAQ:FDX) Posts Forecasts for the Holiday Season

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By Joseph Carducci on October 22, 2014 Company

Package delivery companies are flooded with shipments over the holidays. Needless to say, Christmas means presents, which are not only exchanged by hand but also delivered by mail. Online shoppers order thousands of items as the seasonal sales and offers are introduced.

FedEx Corp. (NASDAQ:FDX), a renowned package delivery provider, forecast the number of shipments that they will receive in the holiday season, on Wednesday. The company estimated that this year, they will receive a record-breaking 22.6 million shipments on 15 December, which is the peak day of the season. The day after the Thanksgiving holiday in America marks the start of the shopping season for Christmas. FedEx Corp. (NASDAQ:FDX) have estimated that they will be shipping at least 290 million packages from Black Friday to the beginning of the holiday season.

The company’s annual peak has increased by 50% compared to the peak value in 2007. On 17^th December, 2007, the company had shipped 11.5 million parcels. This can be due to the advancement in e-commerce and online shopping. A fiasco occurred in the holiday season last year when 2 million packages did not find homes on Christmas Eve. This problem arose because a surge occurred unexpectedly in the later days of the holiday season. United Parcel Service (NASDAQ:UPS) took a greater impact from this incident than FedEx Corp. (NASDAQ:FDX) did.

The vice president of integrated communications and marketing at FedEx Corp. (NASDAQ:FDX) expressed his pride over the performance of the company in the last year despite the challenging weather conditions. FedEx Corp. (NASDAQ:FDX) collaborates with its retail partners to determine what they would need in the holiday season and prepares for the coming challenges.

The capital investments of FedEx Corp. (NASDAQ:FDX) are $1.2 billion this year. The company will be spending 90% of these investments in increasing their capacity in preparations for the peak days of the holiday season. FedEx Corp. (NASDAQ:FDX) and several other shipment companies are now working hard so as to deal with the millions of seasonal shipments effectively and efficiently, and avoid any problems of stranded packages. FedEx Corp. (NASDAQ:FDX) hired 40,000 seasonal workers in the last year. This year, however, the company has increased the number to 50,000.

United Parcel Service (NASDAQ:UPS) did not provide their estimate for the number of shipments that they will receive during the peak days in this year. Typically, the company gives its forecasts after it reports its earnings for the third quarter of the year. The company is due to post its earnings on 24^th October. United Parcel Service (NASDAQ:UPS) have also proclaimed their plans of hiring 95,000 seasonal workers especially to deal with the holiday packages. Last year, the company had hired 55,000 for this purpose. None of the shipping companies want a repetition of the events of last year, and so, are taking measured precautions to face the challenges brought by the holiday season shipments. This shows their commitment to delivering quality services and good performance.