(Updates with analyst’s comment in final paragraph.)
Oct. 24 (Bloomberg) -- FedEx Corp. plans to hire 20,000 seasonal workers, 18 percent more than last year, to handle a surge in holiday deliveries at the operator of the world’s largest cargo airline.
Shipments from Thanksgiving in the U.S. through Christmas may increase 12 percent to more than 260 million, led by gains in FedEx’s SmartPost, Ground and Home Delivery businesses, the Memphis, Tennessee-based company said today in a statement.
“Retail inventory such as apparel, personal consumer electronics and luxury goods as well as books and other items from large Internet retailers will account for a large portion of FedEx holiday volumes,” the company said.
Rising package demand and seasonal hiring are signals of economic growth, countering indicators of a slowdown in the recovery. United Parcel Service Inc., the world’s largest delivery company, has said it plans to announce peak season hiring early next month.
FedEx climbed 2.7 percent in New York to $81.52, the highest closing price since Aug. 15. The shares were upgraded to “buy” from “neutral” earlier today by Lazard Capital Markets.
“Intra-North American cargo movements were quite firm over September,” Urs Dur, a Lazard analyst in New York, said in a note to clients. “It is now too late to move goods by sea to the U.S. or Europe for the season. We believe retail inventories have been falling and, as such, we believe seasonal air-freight volumes will be supported globally.”
FedEx said it expects to move more than 17 million shipments on Dec. 12, which would make the day its busiest ever. That would be a 10 percent gain from FedEx’s busiest day in 2010.
FedEx cited the National Retail Federation prediction for growth in holiday sales of 2.8 percent in November and December. Holiday hiring last year totaled 17,000 people, said Carla Boyd, a FedEx spokeswoman.
“We’ll continue to see, I think, every year just more and more online and holiday shopping,” said Kevin Sterling, a BB&T Capital Markets analyst in Richmond, Virginia, who has “buy” recommendations on FedEx and UPS. “FedEx and UPS are going to benefit from that.”
UPS announces third-quarter earnings tomorrow. The Atlanta- based company may report profit of $1.05 a share, according to the average of 22 analyst estimates in a Bloomberg survey.
“We would not be surprised if UPS provided a little more cautious optimism,” Jason Seidl, a New York-based analyst with Dahlman Rose & Co., said in a note to clients. He has a “hold” rating on UPS and a “buy” on FedEx. “The freight industry fundamentals appear better than many had feared based on the results we have seen thus far.”
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