December 19, 2014

FedEx to acquire third-party logistics company GENCO

As shipping services approach the surge in holiday volume, they focus on delivering the best service to customers who expect parcels to arrive on time and in one piece. However, 'tis the season for returns, as well. With the announcement of its planned acquisition of GENCO, prominent delivery company FedEx will invest resources in the science of reverse logistics, a sector of delivery that has grown in importance in recent years. 

The reason for that new emphasis is the rise in ecommerce. With more people shopping for goods online than ever before, expectations for delivery have mounted. Where consumers once selected items from a print catalog, called a 1-800 number and then waited weeks for a parcel to arrive, the internet has changed the game. Today, customers demand overnight shipping, same-day delivery, step-by-step tracking and free returns, among other perks and incentives to continue doing business with their favorite retailers. 

Headquartered in Pittsburgh, GENCO has worked with company like Sears in the past to fine-tune strategy for re-marketing, repair and resale for returned items. As a leader in reverse logistics, its expertise and market footprint (over 11,000 employees and annual sales of $1.6 billion, according to Bloomberg) to improve customer service and expedite return services. Foremost, the acquisition strategy recognizes the expanding need for transparency, speed and customer support. 

Studies show that consumers in the industry watch the market around the holidays to frame their confidence in the delivery industry for the subsequent year. With this high-profile merger, FedEx could sway some customers to try its beefed-up logistical capabilities when the merger is complete. 

Our expectations for global shipping are changing with the rise in technology, so it's no surprise corporations look to mergers and acquisitions to meet them.