FedEx Spending $100 Million in China, Making Moves for the Holiday Season

Andrew Klips |

FedEx Corp. (FDX) said Thursday that it has agreed to spend more than $100 million to construct a new cargo 134,000-square-meter (1,442,364 square feet) center in Shanghai, China for its express delivery business.  FedEx Express, a subsidiary of the U.S.-based global shipping giant, expanded operations this summer at Shaghai’s Pudong International Airport, one of its busiest gateways in China with nearly 70 flights in and out each week.  FedEx Express has a center in Guangzhou in southern China as well.
The new center will be at the Pudong airport and is slated for completion in 2017, according to FedEx.
The Memphis, Tennessee-based company is the largest cargo airline company in the world and looking to take a chunk of business in China from competitor United Parcel Service, Inc. (UPS), the biggest package delivery company, who already has an international center in Shanghai.
Stateside, FedEx recently announced that it will be adding 20,000 new seasonal workers to handle the 280 million shipments it is expected to be made between Thanksgiving and Christmas.  The company also purchased 71-acre parcel north of New Castle, Delaware for future plans of building a new 250,000-square-foot distribution center.
The parcel delivery outfit said this week that it has partnered with online auction behemoth eBay, Inc. (EBAY) to offer sellers that ability to print labels at home and ship products at a discount.  FedEx has been a shipping option at eBay for quite some time, but merchants had to trek to a FedEx store to print the labels, so the service was used infrequently.
According to eBay shipping VP Carl Gish, eBay also is adding tracking and duty estimates to international orders through a pact with Pitney Bowes Inc. (PBI), a Connecticut-based manufacturer of postage meters, amongst other things.   Merchants will ship the packages to Pitney Bowes and Pitney will take care of the rest of the logistics from there.  
With the holiday season nearly upon us, FedEx and eBay are apparently looking to snag a bigger piece of the shopping pie from giants like Amazon.com (AMZN), whom provides free expediting shipping through its Amazon Prime program.
“We’ve been asking sellers to meet buyer expectations of free shipping and tracking,” Gish said in an interview. “It’s something our sellers have been asking for for a while, given that we have USPS [United States Postal Service] and UPS. FedEx, as a major player in that space, is clearly a great partner for both our buyers and sellers.”
Shares of FedEx closed Wednesday trading down by 1.05 percent at $90.83 and up about 8 percent across 2012.  Closing Wednesday at $73.12, shares of UPS are trailing its rival; up about 2 percent this year.  
Pacing the companies mentioned, shares of eBay have rocketed ahead more than 60 percent since January 1, 2012; closing Wednesday at $48.88.  Amazon.com has been nothing to sneeze at either, rising 31 percent in 2012 through Wednesday’s trading to $228.49.  On the flip side, shares of PBI have shed more than 18 percent this year to $14.06 each.

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