Dan Reed wrote a very good piece in USA Today on the 8th about FedEx’s focus on China. I enjoyed the article (both generally and as a PR guy – their agency must be very happy with it) very much, but Dan was clearly reporting from Memphis. Several key points that could have balanced the piece a bit and made it more credible:
• There was substantial mention of UPS as a competitor, but apart from the matter of international flights, the real competitor that both UPS and FedEx face on the ground is DHL. The European-owned company has been open and in business in China for 18 years and has a far deeper penetration in the ground than FedEx. They leverage cargo space on other airlines, allowing them to focus their China efforts on building their local network, where they far outclass FedEx.
• There was no mention of the fact that FedEx was actually relatively late to China, leaving them few choices for joint-venture partners, which continues to beleaguer the company.
• Dan all but ignored the serious challenges FedEx and its competitors have in a growing battle with ChinaPost, and ongoing problems with customs clearance, security, and speed of delivery. Why is it that the U.S. Mail and Deutche Post get their packages from Amazon to me quicker than FedEx as measured from time-of-dispatch to arrival at destination?
• FedEx Kinkos is my office-away-from-office in the U.S., but I won’t touch them in China. Their few outlets are poorly located and dying of neglect, and the service is abysmal.
FedEx has opportunities in China, to be sure, and the company desperately needs its full scope of services. But they will not make a success of it here until they make substantial investments beyond airplanes and routes and significantly improve their offering on the ground in China.