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Meet FedEx’s Technological Arm: FedEx Office

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FedEx Office

Memphis-based FedEx (FDX) bought Kinko’s printing chain for $2.4 billion in 2004 to compete with United Parcel Services’ (UPS) Mail Boxes. FedEx planned to integrate Kinko’s 1,200 stores into its own service offerings. FDX’s strategy was to create a digitally connected network that would act as a one-stop shop for customers to create, print, pack, and send virtually anything. FedEx later reorganized Kinko’s into FedEx Office.

Meet FedEx's Technological Arm: FedEx Office

As of May 31, 2015, FedEx Office operated approximately 1,800 customer facing centers including 25 locations in Canada. The network of digitally connected locations offers access to:

  • copying and digital printing through retail and web-based platforms
  • signs and graphics
  • professional finishing
  • computer rentals and the complete range of FedEx day-definite ground shipping and time-definite global express shipping services.

With the retail industry’s increasing focus on e-commerce, FDX expects FedEx Office to grow to keep pace with retail returns and shipping merchandise across the US.

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Other services

FedEx Office’s location provides access points to FedEx Express and FedEx Ground services for higher margin retail customers. In addition, FedEx Office offers packing services and sells packing supplies and boxes. Thus, customers can opt to have merchandise professionally packed by a specialized team at FedEx Office. It is then shipped using FedEx Ground day-specific shipping and time-specific global FedEx Express shipping services.

In November 2014, FedEx Office rolled out a new packing feature, Pack Plus. Its offerings include new custom box building capabilities and techniques, a more robust assortment of specialty boxes, and additional packing supplies, equipment, and tools that cater to customers’ requirements.

Most of the FedEx Office locations provide local pickup and delivery service for print jobs completed by FedEx Office. A FedEx courier picks up a customer’s print job at the customer’s location and then returns the finished product to the customer. Plus, customers can also upload files from popular cloud websites including Box, Dropbox, and Google Drive through cloud printing with FedEx Office Print Online.

Investing in ETFs

FDX is a regular dividend-paying company. Other regular dividend-paying companies in the transportation and logistics space are Norfolk Southern (NSC), Union Pacific (UNP), Werner Enterprises (WERN), Knight Transportation (KNX), J.B. Hunt Transport (JBHT), and Landstar Systems (LSTR). With equity markets on shaky grounds, dividends have assumed more importance. The Vanguard Dividend Appreciation ETF (VIG) invests in major transportation companies. This ETF holds 1.1% in FDX.

In the next part of the series, we will analyze how FedEx makes money.

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