Yesterday, FedEx Supply Chain (formerly GENCO), the 3PL subsidiary of FedEx Corp. launched a new product, FedEx Fulfillment, which promises to be a direct competitor to Amazon’s popular Fulfillment by Amazon (FBA) program.
Like Fulfillment by Amazon, FedEx Fulfillment offers small and medium-sized businesses the opportunity to outsource order fulfillment across multiple channels, including websites and online marketplaces. Services including warehousing and inventory management, picking, packing, delivery, and reverse logistics have great appeal to companies looking to target larger markets, but that are unable to establish their own distribution and fulfillment centers. Unlike FBA, FedEx Fulfillment offers customers a direct pipeline into FedEx’s transportation networks.
While FedEx’s fulfillment solution may appeal to companies looking to limit their reliance on Amazon and diversify their online operations by selling across multiple platforms, it remains to be seen how the service will compete with Fulfillment by Amazon’s link to the ‘Prime Eligible’ network. Members of Amazon’s popular Prime program receive free two-day shipping on millions of items within the United States, as well as the option to upgrade to next-day or same-day delivery for a small extra charge. Given that convenience and delivery speed are two of the main drivers pushing consumers to make purchases from online channels, Prime subscribers are be among Amazon’s most active and valuable customers.
In early 2015, FedEx bought third-party logistics provider GENCO Distribution Systems for $1.4 billion, and rebranded the company as FedEx Supply Chain. Since 2015, FedEx Supply Chain has been expanding its offering of 3PL services which target the rapidly growing e-commerce market.
Those interested in learning more about the impact of e-commerce on demand for air freight in 2017, should join us at Cargo Facts Asia in Shanghai, 25 – 26 April, where we will present to full sessions devoted to that subject. To register, or for more information, go to CargoFactsAsia.com.