Dive Brief:
- Nearly half of FedEx's Q2 revenue growth came from business-to-business customers as the carrier sees momentum in priority segments like automotive, healthcare and aerospace, executives said on a December earnings call.
- One example of FedEx's B2B gains is its relationship with BMW Group. The carrier won incremental business from the automaker due to "our global reliability and scale, our strong service for time-critical aftermarket and production deliveries and our collaborative shipping tools," per EVP and Chief Customer Officer Brie Carere.
- FedEx is also flexing its capabilities for healthcare customers, enabling shippers to set their own rules for package intervention and monitoring. The company launched a new program in which it builds a custom standard operating procedure with pharmaceutical shippers' quality teams, Carere said.
Dive Insight:
FedEx continues to expand its B2B shipping ambitions to boost its bottom line. Over the past year, the company established an automotive vertical and onboarded more business in its healthcare segment as part of those efforts.
"That B2B contributed to nearly half our revenue growth this quarter demonstrates this strategy is working," Carere said. "It is helping us sustain and win new business in priority areas like healthcare and automotive."
The carrier is targeting gains in specific industries by deploying dedicated leadership teams and resources. For example, FedEx created a new data center sales vertical to support existing customers and acquire new ones. Carere said there's upside in this segment because technology companies are investing heavily in data center infrastructure.
"In a market that is moving that quickly, there is opportunity," Carere said of the data center industry. "This market expects precision. I don't know anybody who does precision better than we do."
Carere also highlighted FedEx's work with players in the U.S. e-commerce market, another priority area for the carrier. Wayfair is tapping into FedEx's premium integrated visibility tool to reduce "where is my order" calls from customers and decrease tracking data outages. Additionally, FedEx's onboarding of its large-package delivery deal with Amazon is going well, she said.
