Alpha Resource Partners – Steady growth in e-commerce have sent profits at US delivery giant FedEx, sharply higher.

Alpha Resource Partnershas reported that Federal Express (FedEx), the US package delivery giant, says that 4^th quarter profits have risen sharply thanks, in no small part, to the inexorable growth in e-commerce that has provided a boost to its ground-shipping business.

The performance of FedEx’s core express-delivery business stream has remained largely flat in line with sluggish economic growth in the US economy but rapid-growing demand for logistics and same-day shipping offered by the likes of Amazon and other e-retailers has taken up the slack.

"E-commerce has been something of a godsend for FedEx," said an Alpha Resource Partners researcher. “Companies like Amazon, eBay and others rely heavily on logistics companies like FedEx to deliver goods and merchandise and this has largely made up for the flat demand for express delivery of packages between businesses who continue to try to cut costs by using cheaper services offered by the USPS, (US Postal Service)“ he added.

The Memphis, Tennessee- based company earned $703 million in the 4^th quarter; more than double the $303 million it managed in the same period last year. The company’s revenues rose 3.4% to $11.84 billion beating analysts’ expectations while the ground-shipping business grew by an impressive 8%.

E-commerce has been credited with reversing the fortunes of many logistics companies including FedEx’s rivals, UPS and DHL while even boosting revenue for state-owned postal services like the USPS.

“This is yet another example of how important e-commerce has become not just to those wanting to sell their goods and merchandise online but also to the indirect beneficiaries like logistics companies,” said the Alpha Resource Partners researcher.

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