[PEN-L:11805] FED-EX Won't Keep Parcel Post Business

[Michael Eisenscher <meisenscher@xxxxxxxxxxx>]

Dow Jones Newswires -- August 15, 1997
 FedEx - Benefit -2: Co. Sees Parcel Post
 Returning To UPS

 AP-Dow Jones News Service

 While some customers may permanently shift to FedEx's express and
 deferred-delivery services after using them during the strike, the company says
 it doesn't hope to keep the pure parcel post traffic. UPS overwhelmingly
 dominates the parcel post sector and under normal circumstances, FedEx
 doesn't compete for those shipments.

 Chief Financial Officer Graf said that during a visit to a FedEx hub last
 weekend he saw large volumes of 'what looked like normal parcel post' being
 shipped via the company's deferred delivery services.

 'The question is how much of that are we going to retain. that most of the
 low-value, noncritical things, they're going to get right back,' Graf said.

 Graf said the company has also seen only 'a very small pickup' in its
 international priority service, the most premium FedEx overseas delivery
 categories. UPS's international operations have been largely unaffected by the
 Teamsters strike.

 To absorb the flood of packages it has seen since the strike began, Federal
 Express curtailed the number of packages customers can ship, shortened the
 operating hours of its retail outlets and moved all pickups to earlier in
the day.

 Nonetheless, Graf said the volume of packages tendered to FedEx at its drop
 boxes and service counters has increased dramatically, and the company is
 gradually making adjustments to allow even more volume to pass through its
 system.

 'We've seen almost a doubling of the traffic in our convenience network to a
 million pieces a day,' Graf said. 'To the extent that we can handle it, as
 customers bring us traffic to our drop boxes or stations, we'll take that
within
 reason.'

 FedEx has increased its capacity by flying extra segments with its cargo
 aircraft, calling in more workers and asking nonoperations personnel to
 volunteer for duty in its sorting and distribution hubs, Graf said.