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Fedex CEO shoots own idea of deliveries by UAVs

Dec. 19, 2013, Minneapolis. Min. - The CEO of FedEx doesn't see drones taking over the package-delivery business any time soon.


December 19, 2013
By The Winnipeg Free Press

Fred Smith said FedEx has several drone studies underway. But the
idea of delivering items by drone is "almost amusing," Smith said on a
conference call Wednesday after the company reported financial results.

 

Smith said FedEx has a drone expert on staff — technology chief Rob Carter.

 

"He actually owns a drone," Smith
said. "He reported that it operates about eight minutes and can carry
four Budweiser beers at his farm."

 

Jeff Bezos, the CEO of Amazon.com, caused a stir
recently when he said Amazon is exploring drone deliveries and sending a
small package via an automated drone could be reality in a few years.
United Parcel Service and German delivery company Deutsche Post DHL have
said they are evaluating drone delivery.

 

There are huge obstacles to residential drone
deliveries. The U.S. Federal Aviation Administration barred their use
for commercial purposes in 2007. No-fly zones abound in places such as
Washington D.C. There are questions about who is liable if a drone
crashes and damages something, or someone, on the ground.

 

Smith, who is also FedEx's
chairman and president, commented in response to an analyst's question
about online sellers getting into the business of delivering goods
themselves.

 

Though FedEx may eventually have to cope with
online retailers making their own local deliveries, right now it is
dealing with customers shifting from overnight delivery service toward
cheaper ground transportation. That shift was a factor in the
smaller-than-expected gain in FedEx's second-quarter profit reported
Wednesday.

 

Revenue and U.S. volume both fell slightly in
FedEx's express unit, which handles overnight shipments and is the
company's largest division. Ground-shipping revenue rose 10 per cent,
and freight revenue was up four per cent.

 

FedEx Corp.'s net income rose 14 per cent to $500 million, or $1.57 per share. Analysts had been expecting $1.64 per share.

 

A year earlier it earned $438 million, or $1.39 per share.