Analysis: is FedEx planning to put its stamp on a vulnerable Royal Mail?

[TrueBlueTerrier]

https://theloadstar.co.uk/analysis-fede ... oyal-mail/" onclick="window.open(this.href);return false;

When the news hit the wires last week that e-commerce behemoth Amazon was trialling a delivery service to consumers that would also be offered to third-party retailers, I received a couple of calls from banking sources, one of whom asked: “Do you remember our chat this summer?”

“Of course,” I replied.

“FedEx could be readying to up the ante, to show Amazon who is in charge in delivery services worldwide,” he said.

This, in typical banking jargon, means that FedEx could be preparing a move to grow again via acquisitions rather than organically, in order to give another boost to its already sky-rocketing valuation, two and a half years after its €4.4bn takeover of TNT Express was announced.

“If so, the UK could be the next battleground,” I replied.

Opportunity

For Amazon, Royal Mail is a precious ally in the UK, while for FedEx, according to another London-based banker ready to feed the rumour mill, “it could be a matter of pride” as well as other priorities, such as scale and better services to European and US shippers.

About two-thirds of FedEx’s revenues were generated in the US last year, and it looks very well balanced already, a senior analyst countered. However, I think it could also be a matter of opportunity, as the chart below suggests…



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[HarryPoorer]

I really hope USPS or FEDEX would take over then , after the cull, we'd have better employers !

[Dorset Plodder]

Yeah we're such a "Precious Ally" for Amazon. That's why they pulled God knows how much business from us and set up there own delivery service to compete with us! Oh apart from the odd small packets that they can't be bothered to deliver to far flung rural areas.... then the USO is good enough and they'll throw us a few crumbs.

I only wish Royal Mail had the balls to tell them to stick their business at Christmas when they come back to us to help deliver all the orders their system can't handle. We know that's not going to happen though.

[redneck]

How it can be said that Amazon is 'an ally' of ours is beyond me. Who writes this stuff?!

[britwrit]

Fortune Magazine - which is actually a real magazine - named FedEx as one of the 100 Best Global Companies to Work for back in March. (Though at number 99.)

When I lived in the states, I had a friend who worked for them. I also watched them at work when they came to pick up stuff for the offices I was in. The impression I got was that they were really efficient but that they dealt with businesses and more up-scale customers.

I'm sure someone will correct me but they used a set number of differently sized parcel boxes. So, everything could be run through machines, which they did every chance they got along the line. That's a huge difference from what we do. I'm not sure if they'd see a lot of economies of scale if they bought us up. Or maybe just on the delivery side with GLS in Europe.

[POSTMAN]

Thanks for that Brit.

Info on Fed staff like RMC here...
https://www.browncafe.com/community/for ... ssions.50/" onclick="window.open(this.href);return false;

[toomuchcoke]

Yeah we're such a "Precious Ally" for Amazon.

I think "precarious ally" would be a better description? They do generate an awful lot of traffic, which we obviously get a piece of, but they'd clearly prefer to cut us out of the loop when it comes to high density delivery areas.

[meercat]

How it can be said that Amazon is 'an ally' of ours is beyond me. Who writes this stuff?!

The exact opposite was stated.

We are their ally (not visa-versa) in that we do any and all work for them which they can't manage in their pipeline. We save them a fortune in the pipline capability which they don't need to maintain for peak periods.

[Gummage]

Unless I've been told incorrect information from TNT employees: a FedEx takeover will result in wages being frozen until they drop to the level of the Minimum Wage.

Are FedEx really going to want Letters which don't make a profit, well if Wages were cut 40% then they might turn a nice profit and get market share.

Just remember it was Vince Cable and Michael Fallon who privatised Royal Mail and exposed you to all this.

[mr hil.]

I do not think FedEx want the whole of Royal Mail just the profitable bits, they would buy out RM and then split off GLS for themselves and sell on the remainder to claw back as much of their initial outlay as possible.