Dive Brief:

• FedEx reported earnings of $3.75 per diluted share for Q4 2017, compared to a loss of $0.26 per diluted share a year ago, and also a $2.7 billion increase in revenue for FY 2017 compared to FY 2016.
• FedEx saw an increase in operating income, which the company's press release attributed to "higher base rates, increased package volume and the inclusion of TNT Express results."
• On the earnings call, FedEx CFO Alan Graf identified the higher volume of packages circulating through FedEx Freight, the increase of heavy freight and the acquisition of TNT Express as major reasons why FedEx's operating income and earnings increased.

Dive Insight:

As indicated in FedEx's earnings call with investors, consumers are relying on e-commerce to satisfy more of their shopping needs, which means business is booming for FedEx and other logistics providers. Consumers aren't just buying kitchen knives and rugs off Amazon and online retail stores — as Executive Vice President and Chief Marketing and Communications Officer Rajesh Subramaniam said, the "accelerating trend" is consumers buying furniture, mattresses and heavy-duty sports equipment.

This opens up a whole new market for FedEx, so it's no wonder the company reported such strong quarterly and annual earnings. Graf told investors that this quarter, FedEx will implement new tech to improve its SmartPost feature, which allows individuals or businesses to track packages, deliver to remote locations and make fast and easy returns.

While FedEx may not be innovating as rapidly as DHL, FedEx is certainly handling the e-commerce trend with aplomb. Other logistics providers should remember FedEx's identification of the "heavy freight trend" — as online shopping becomes increasingly popular among consumers, logistics companies aim to prepare for a future commercial environment where not just most, but all goods and products are bought online and expected to be delivered within 48 hours.