Dive Brief:
- FedEx has gained momentum in its healthcare segment, securing over $500 million in quality agreements in fiscal year 2024, EVP and Chief Customer Officer Brie Carere said on an earnings call last week.
- Quality agreements involve creating "a customized standard operating procedure for critical healthcare shipments," Carere said, helping reliability in shipping sensitive and high-value goods.
- FedEx's healthcare customers are also tapping into FedEx Surround, a platform that offers real-time shipping visibility and alerts about potential delays. "We have over $1 billion of healthcare-related revenue that comes from customers who utilize FedEx Surround," Carere said.
Dive Insight:
FedEx has seen strong results since increasing its focus on healthcare customers last year, Carere said.
While these shippers are often demanding in terms of speed and handling requirements, they'll usually bring in more revenue on a per-package basis than retail and e-commerce shippers. That type of sector is appealing to carriers in an environment where volume growth is hard to come by.
"Our unmatched value proposition has enabled recent high-value wins in the semiconductor, healthcare and aerospace industries," Carere said in a March earnings call. "We will continue to execute our commercial strategy to compete and grow further in the high-margin areas of the market."
FedEx has strengthened its healthcare capabilities in multiple ways this year. In March, it gave customers the ability to select service options such as temperature requirements at the individual package level, Carere said. The company also rolled out specific healthcare identifiers for each Express shipment so it can intervene with more speed and precision, she added.
And in June, FedEx opened its first European Life Science Center in the Netherlands, Carere said on last week's call. This facility provides temperature-controlled shipping and storage services and connects to most European Union countries within 24 hours.
FedEx faces steep competition in the healthcare logistics space. Rival UPS aims to double its annual healthcare revenue by 2026 after boosting its capabilities in the sector through acquisitions like MNX Global Logistics and an expanded network. DHL rolled out a new cold chain service last year used by Siemens and Eli Lilly that allows perishables to be transported with less packaging.
