BY MARK B. SOLOMON, EXECUTIVE EDITOR – NEWS
PARCEL EXPRESS
Transportation
SATISH JINDEL, THE PRESIDENT OF TRANSPORT CONSULTANCY SJ CONSULTING,
had a conversation recently with one of his clients, a large retailer. According to Jindel, the
retailer, which spends millions of dollars a year with FedEx Corp., complained that its rep
wasn’t keen on handling more of its parcel volumes.
Jindel, whose street cred frees him to administer tough love when deemed appropriate, told
the retailer he wasn’t surprised by the rep’s reaction. “It’s to be expected when retailers want
So far, retailers have been about as creative as a sledgehammer. Caught between offering a
volumes given their growing relevance (see Exhibit 1). Realizing that e-commerce—and
B2C—is the wave of the future, they are reconfiguring their networks to handle the
business more cost-effectively. At the same time, however, the giants are sending
signals to retailers that they should be prepared to accept compensatory rates or
find another carrier.
MANY PACKAGES, NO PROFITS
Frederick W. Smith, FedEx’s founder, chairman, and
CEO, spoke bluntly about the profitability problem last
UPS and FedEx
have faced major
challenges in B2C
shipping, not least
of which are
shippers who
expect something
for nothing. Now,
they’re sending
clear signals that
things are about
to change.
The empires strike back
