FedEx has announced it will add a two-day air shipping service. The new service also comes at the same price it would usually charge for ground shipping. The company will soon be ending an air shipping contract, and this move may attempt to fill the void.
E-commerce continues to result in distribution centers being placed closer to highly populated areas. As a result, the demand for cross-country flights for packages has reduced. In the E-commerce industry, packages usually have set delivery dates as opposed to strict delivery times. As a result, FedEx has made a move to reduce the cost of its two-day air shipping service. Currently, the company has reduced prices to within 10% of its ground shipping service.
Image Credit: David W. Cerny/ Reuters
Key Themes Behind This Trend
- Reduced-cost Two-day Air Shipping
- By reducing the price of two-day air shipping to within 10% of ground shipping, there is an opportunity to disrupt the package delivery market and capture more customers.
- Closer Distribution Centers
- As E-commerce continues to grow, there is an opportunity to disrupt the logistics industry by optimizing distribution center placement for faster and cheaper shipping options.
- Flexible Delivery Dates
- An opportunity exists in the package delivery market to disrupt traditional delivery methods by offering flexibility in scheduled delivery dates instead of strict delivery times.
Where This Applies
- Package Delivery
- Disruptive innovation opportunities in the package delivery industry include implementing new delivery options and exploring more efficient distribution centers.
- Logistics
- Opportunities for disrupting the logistics industry lie in finding ways to optimize package delivery and distribution center placement to reduce costs and increase efficiency.
- E-commerce
- Disruptive innovation in E-commerce involves optimizing shipping and delivery options to meet customer demands and stay competitive in the market.
