FedEx Corporation (FDX) has launched a new business tool to aid e-commerce customers in their shipping process. The new system, fedex.com Integration Manager is a Web-based tool that connects with platforms like eBay Inc. (EBAY), Amazon.com Inc. (AMZN), and Google Inc. (GOOG). The seamless connection allows enterprises running multiple online stores to simplify their selling and shipment process.
With improvements in the market scenario driving more product offerings, we expect FedEx to register strong earnings momentum and leverage its long-term expansion opportunities. For calendar year 2013, the U.S. GDP and industrial production growth is expected to be 1.9% and 3%, respectively, a positive market scenario for the company. Further, the new additions to the product portfolio will likely improve the company’s earning power over the next several years.
FedEx also aims to spread its services across the U.S., Canada and Mexico and capitalize on potential business opportunities in NAFTA (North American Free Trade agreement) markets. The company is mounting its Priority next-day services in its FedEx Freight segment by opening a new service centre in Rochester, New York.
The new service centre will cater to 13 U.S. and Canadian markets dealing in cross border shipments to and from Toronto and Montreal. In Mexico, the company added two new service centers – one each in Culiacán and Silao.
These centers will strengthen its freight network in the northwestern and north central parts of Mexico. Management’s other improvement plans include productivity enhancement with automation of planning and execution of free load plus pickup and delivery processes in the Ground segment.
Further, FedEx is boosting its international business with huge investments to enhance the existing routes and make strategic acquisitions. The company has allocated 46% of its fiscal 2013 capital expenditure budget of $3.9 billion for growth initiatives and 54% for the existing operations.
Currently, FedEx retains a Zacks Rank #3 (Hold).Read the Full Research Report on GOOG
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