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Non-Tech : FedEx (FDX)

FDX 256.64

-2.1%

11:20 AM EST

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To: alex pierson who wrote (256)	12/7/1998 6:05:00 PM
From: Darryl Olson	of 524

I agree that the barrier to entry is high. However, if someone wanted in, I don't believe they would do it by buying trucks and building terminals from scratch. If the opportunity and returns were there, I think potential competitors would get in by acquiring LTL companies (which are struggling for the most part) and developing a network. This presents a number of issues: Many LTL companies are unionized, eliminating overlap would be costly in the short-term, changing/implementing/merging the technologies (systems) would be difficult, air capacity would be required, etc.. Overall, this would be a monumental endeavor but it could be done. Some companies might try to get in on a regional basis, then expand - something akin to Southwest Airlines in the airline industry. While truck capacity is a legitimate barrier to entry, I believe it is one of many. On the other hand, I've learned to "never say never."

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