RPS to test residential delivery
SOURCE: Business Times Online Singapore - Print Circ 35,118
SUPPLIER: World Wide Web
DATE: 05-27-1999
HEADLINE: FDX unit to test business to residence delivery
FDX Corp's RPS Inc, the No 2 US small-package ground carrier, will test a new service designed for companies that ship to residences as it tries to grab more of the booming market for electronic-commerce orders.
Less than 10 per cent of RPS's orders now go from businesses to residences. Depending on the results of its tests, RPS could expand the service throughout the US as early as March 2000. The market for items ordered on the Internet and delivered to homes is expected to jump sixfold by 2003 to US$108 billion (S$183.5 billion), according to Forrester Research Inc.
FDX's Federal Express, the world's largest express-delivery company currently focuses on business-to-business orders. Deliveries to residential areas generally cost companies more because there are not as many orders to specific areas as with business-to-business, Precision Logistics LLC analyst Joseph Guerrisi said.
"The key's going to be getting the delivery densities that will allow them to make this a cost-effective move," Mr Guerrisi said.
In July and August, Pittsburgh-based RPS will start testing the program in the Pittsburgh area, using different contractors, facilities and customized services than it uses now. Its main competition will be closely held United Parcel Service of America Inc, the world's largest package-delivery company, and the US Postal Service, analysts said.
In January 1998 FDX bought trucking company Caliber System Inc, which owned RPS, for US$2.25 billion as part of an effort to better compete with UPS.
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