FedEx Is Not Dead Yet

By Douglas A. McIntyre Updated Jan 13, 3:29AM EST · Published Sep 16, 9:20AM EDT

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Amazon.com Inc. (NASDAQ: AMZN) was supposed to steal some of FedEx Corp.’s (NYSE: FDX) business by launching a fleet of its own planes. Drones will replace FedEx trucks, but in the air, not on the streets. Emissions limitations also will make the delivery company cut down its truck fleets. It is only a matter of time.

The market has not bought any of the speculation about FedEx’s future. Its shares are up over 7% this year, and at $160 they trade just shy of their 52-week high of $169.

FedEx already has its share of competition, and still, the market likes it. The U.S. Postal System continues to fight for its life, at least as it is now, and it has armies of trucks and tens of thousands of offices. Post offices in many other countries have the same problem, and the same aggression as they fight back.

In addition, United Parcel Service Inc. (NYSE: UPS) matches FedEx across much of its network, and it will continue to do so.

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FedEx still holds a number of advantages over almost any other means of distribution. For the most part, it is the least expensive alternative. It has the huge moat of the cost to create its infrastructure and logistics. Amazon’s chess move represents little more than a dream.

FedEx earnings come out next week. They will demonstrate, once again, how little FedEx has to fear from competition. The only real enemy it has is the world’s economy.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.