FedEx has balanced shipping costs by land and by air

FedEx delivery service has equalized the rates for land and air delivery reports The Wall Street Journal. Previously, shipping by plane cost significantly more than a truck. The company decided to abandon part of its margin in order to attract the attention of online stores to its express delivery by air.
The division of air delivery FedEx Express appeared forty years ago. At that moment it was intended for the transport of legal documents and drugs for long distances. Now similar services are used mostly for the transportation of online orders.
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Strong competition in the supply of goods prompted FedEx to take urgent action. The company is trying to adapt its delivery system to the current conditions in which online purchases dominate.
FedEx has already felt the shortcomings of express business. In the third quarter, the average revenue per package in the United States decreased by 2%.
One of the downsides to the FedEx air delivery system in its current state is delivery on time. Consignors pay additional amounts so that their customers receive the goods by 8 or 10-30 am. This system is not suitable for trading via the Internet, where it is more important for customers to receive a package on a certain day, not an hour.
In addition, now warehouses are usually located much closer to the place of residence of customers. This reduces the need for flights across the country for quick delivery.
In particular, Amazon in the United States has 400 points of issue, sorting centers and transit hubs. And many smaller retailers use nearby warehouses to pack and ship orders.
Ass result, experts of BMO Capital Markets and Refinitiv predict that in the next 12 months FedEx shares will rise in price over 16% to $190 for share.

The information above cannot be considered as an investment advice and past results do not indicate future performance.
**Investors should have experience and understand the risks of losing all the initial investment.
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