Tomahawk, WI 9/19/2013 (BasicsMedia) – FedEx Corporation (NYSE:FDX) operates primarily as a holding company. It is well known for the transportation services it currently provides all over the world, not only in the U.S. The FedEx brand is also well known as a provider of e-commerce and solutions and business services. Its services are designed to ensure it delivers what customers ask it to transport within a day and three at the most. The company has announced that it intends to raise its rates as a measure aimed at increasing its revenues. How effective will this strategy be to FedEx?

 FDX Reasons for Raising Rates is Justified

 When FDX announced its first quarter results, one notable development from this was that it had succeeded in improving its earnings by an impressive 7.5%. Its domestic express shipping business remains the largest within the company. It now intends to raise fees for this division by an average of 3.9%. This is set to be applicable from January 6, 2014. This comes soon after the company implemented a 4.4% increase in its freight business which took effect from July 2013. This measure, together with increase in demand for its goods, is designed to boost its revenue.

 However, if these measures are to be effective in helping make FedEx a more profitable venture than it already is, they must be accompanies with cost cutting measures. The company faces a lot of challenges presented through economic conditions which are highly unfavorable. One thing which continues to work in its favor is the increased demand for its products and services all over the world. FDX still enjoys a special place in this industry since it is listed as the largest air-cargo shipper in the world, based on nothing else other than revenue.

 FDX Rivals Facing a Bleak Future

 Some of the competitors which FDX has to contend with are already facing a bleak future. They have been forced to adjust their business models and restructure their services and products to fit the emerging trends within this industry. Clients appear to be moving towards delivery services which are both slower and cheaper, mainly found in ocean freights. This is what FDX’s rivals have been forced to contend with. This has led many of the rivals to carry out changes in terms of how they do business if they intend to survive this onslaught.

 The changes which are taking place in this industry appear to be effective in regard to consumer electronics. The other area where the changes have been felt by FDX’s rivals is with regard to high tech commodities. FDX appears to have envisaged such a scenario thus its decision to effect a few changes within with a view to making its services more attractive to customers globally. It decided to upgrade and modernize its fleet of airplanes, while reorganizing all its businesses which include freight, ground and express. Benefits will start being felt from 2015.

 Lastly, I believe that FDX will see an increase in its revenue even as it announces new rates. This will be hastened if the company reassures its customers that its services are still top notch and won’t be compromised.

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