DC Velocity - March 2017

26 DC VELOCITY MARCH 2017 www.dcvelocity.com newsworthy

A FedEx unit has launched an online fulfillment service aimed at small to medium-sized enterprises, putting FedEx in competition with UPS and Amazon, among others, for share of the small-business market that uses the Internet to level the competitive landscape with larger retail companies.

The service, called “FedEx Fulfillment,” will be provided by the newly rebranded FedEx Supply Chain, which until January was known as Genco Supply Chain Solutions. The Pittsburgh-based logistics service provider was acquired by FedEx in 2014 for an undisclosed sum. The rebranded unit has historically provided fulfillment services just to large businesses, FedEx Supply Chain said.

The FedEx unit will help smaller businesses fulfill orders from multiple channels, including orders that are placed on Seattle-based Amazon’s website. The unit will also manage customers’ inventories, it said. The tasks will be managed through an integrated online platform for selling and inventory management, according to the company. The platform will track shipment status and provide analytics that include intelligence about shoppers’ spending patterns, FedEx Supply Chain said.

Most shipments will be transported via two-day ground services provided by FedEx Ground, FedEx’s ground-parcel delivery unit, according to Ryan Kelly, senior vice president for FedEx Supply Chain. For an additional charge, the customers can use their own branded packaging rather than the standard FedEx packaging.

The division will target a hot corner of the economy by focusing on businesses trying to handle fast-growing e-commerce volumes while managing inventory for their stores. Many of these companies lack the scale and resources to justify the cost of fulfillment services, and vendors are increasingly stepping in to fill the void. For instance, Atlanta-based UPS has provided fulfillment services for years to smaller businesses. “Fulfillment by Amazon” (FBA), which provides services to third-party merchants, delivered more than 2 billion units worldwide in 2016, while the number of FBA users grew by more than 70 percent, Amazon said last month in releasing its fourth-quarter and full-year 2016 results. The service accounted for more than 55 percent of all units sold in the fourth quarter by third-party merchants on Amazon’s site, the company said.

FedEx enters battle for small-business fulfillment services market

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