FedEx tries to think beyond the pandemic 2 July 2020
YOU WOULD have thought that lockdowns were a bonanza for courier services like FedEx. Not so much, it turns out. On June 30th the American pioneer of express delivery reported that operating profits fell by 64%, year on year, in the three months to May. Although demand from locked-down consumers has ballooned, so have coronavirus-related costs, from extra staff to deeper cleaning of facilities and vehicles. At the same time, a collapse in bulk air cargo pummelled FedEx’s more lucrative line of business.
FedEx is not the only company in its industry to feel the pain. In April UPS, an American rival, also announced lacklustre quarterly results, likewise largely owing to diminished bulk deliveries. Both firms have been forced to suspend guarantees of timely deliveries and to impose surcharges to prevent their networks from becoming overloaded. DHL, a German shipping giant owned by Deutsche Post, Germany’s biggest mail-carrier, has also seen its network and earnings come under pressure.
Aside from crushed profits, thousands of the companies’ delivery workers have become infected with covid-19 in America alone. Dozens have died. Some employees have negotiated extra protections and paid leave. Those who continue to work contend with stress and fatigue over continuing to avoid the virus as they fulfil additional shipments. In…