Following Several Quarters of Outperformance, FedEx's Fiscal First-Quarter Margins Disappoint

Overnight delivery pioneer FedEx is one of three large national carriers that dominate the for-hire small-parcel delivery landscape—FedEx and UPS are the major US incumbents, while DHL Express leads Europe. FedEx is also the largest US less-than-truckload carrier, which helps forge sticky relationships with retail and industrial shippers on the package side. UPS has been around much longer in the US ground market, forging a density advantage and higher margins, but FedEx has gradually enhanced its ground positioning over the past decade, with help from its slight speed advantage over UPS and capacity investment.