VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Sunday, January 11, 2026
FedEx Corporation
FDX · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
FedEx Corporation is a global transportation and logistics provider operating a dense, asset-heavy air-ground network through its Federal Express segment and an LTL network through FedEx Freight. The primary moat in parcels/express comes from physical network density and scale-driven unit economics, reinforced by brand and recurring pricing/surcharge mechanisms, though competition from UPS, DHL, Amazon Logistics and others is intense. FedEx Freight benefits from a large terminal network and scale effects but remains cyclical and price-competitive. Smaller portfolio businesses (Logistics, Office, Dataworks) gain scope and data advantages from the core network but operate in competitive service markets.
Primary segment
Federal Express (integrated parcel & express)
Market structure
Oligopoly
Market share
18% (reported)
HHI: 2,464
Coverage
3 segments · 6 tags
Updated 2026-01-10
Segments
Federal Express (integrated parcel & express)
Integrated parcel and express delivery (air-ground integrator model)
Revenue
85.6%
Structure
Oligopoly
Pricing
moderate
Share
18% (reported)
Peers
FedEx Freight (LTL)
North American less-than-truckload (LTL) freight transportation
Revenue
10.1%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Corporate, other, and eliminations (Dataworks, Office, Logistics)
Integrated logistics/3PL, freight forwarding, retail print & ship access, and supply-chain data products
Revenue
4.2%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
Federal Express (integrated parcel & express)
Integrated parcel and express delivery (air-ground integrator model)
FY25 reflects the first year of the 'one FedEx' structure combining Ground and Corporate Services into Federal Express; Network 2.0 and DRIVE are key efficiency initiatives.
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
Dense global air-ground network (220+ countries) with large fleet and pickup/drop-off footprint; decades of capex and know-how make replication difficult.
Erosion risks
- Amazon Logistics share gains in U.S. parcels
- Regional/alternative last-mile carriers grow
- Aviation emissions regulation and SAF costs
Leading indicators
- Cost per package / cost per stop
- On-time performance and service quality metrics
- Network 2.0 rollout progress
Counterarguments
- UPS and DHL also operate large global networks
- High fixed costs can become a disadvantage in volume downturns
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Route density, hub automation, and network optimization programs support unit-cost advantages versus smaller carriers (especially in dense lanes).
Erosion risks
- Automation technologies diffuse to competitors over time
- Volume volatility reduces density and raises unit costs
- Labor and contractor cost inflation
Leading indicators
- Productivity metrics (packages per hour, stops per route)
- Purchased transportation as % of revenue
- Operating margin trend in Federal Express segment
Counterarguments
- Scale does not guarantee lower costs in all geographies/lanes
- Competitors can match automation capex in key hubs
Brand Trust
Demand
Brand Trust
Strength
Durability
Confidence
Evidence
Brand reliability and delivery performance history support enterprise adoption and willingness to pay for time-definite services.
Erosion risks
- Service disruptions can rapidly damage trust
- Price-sensitive e-commerce shipping commoditizes carrier choice
Leading indicators
- Net promoter score / customer satisfaction (if disclosed)
- Claims rate and service refunds
- Share of premium (time-definite) mix
Counterarguments
- Many shippers treat parcel delivery as a commodity and optimize on price
- UPS/DHL/USPS brands are also trusted in core lanes
Benchmark Pricing Power
Financial
Benchmark Pricing Power
Strength
Durability
Confidence
Evidence
Publishes list rates and implements broad list-price increases; uses demand and fuel surcharges as levers. Competition limits realized yield, but mechanisms support periodic repricing.
Erosion risks
- Aggressive competitor discounting compresses net yield
- Regulatory scrutiny or customer pushback on surcharges
Leading indicators
- Revenue per package / yield trend
- Discount rate and contractual renewals
- Surcharge levels and duration
Counterarguments
- List price increases do not necessarily translate to higher net pricing due to discounts
- Large customers can negotiate aggressively and switch lanes/providers
FedEx Freight (LTL)
North American less-than-truckload (LTL) freight transportation
FedEx announced a plan (Dec 2024) to separate FedEx Freight via a tax-free spin-off expected to be completed by June 2026.
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
Large LTL terminal/service-center footprint supports coverage, linehaul efficiency, and service consistency in core lanes.
Erosion risks
- Cyclical demand compresses utilization and margins
- Competitors expand terminals/capacity in overlapping lanes
- Potential changes from planned Freight separation
Leading indicators
- Operating ratio / segment operating margin
- Tonnage and shipment count trends
- Claims ratio and on-time performance
Counterarguments
- LTL is service-differentiated but still price-competitive; networks are replicable over time
- Strong peers (e.g., ODFL, XPO, SAIA) have comparable density in many lanes
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Higher shipment density and terminal throughput can reduce cost per hundredweight versus smaller regional carriers, but advantages vary by lane and cycle.
Erosion risks
- Lane imbalance and empty miles reduce density benefits
- Wage and equipment inflation
Leading indicators
- Weight per shipment and length of haul
- Cost per shipment / cost per hundredweight
Counterarguments
- Best-in-class operators can outperform on cost despite smaller scale
- Technology-enabled brokerage can divert some demand
Benchmark Pricing Power
Financial
Benchmark Pricing Power
Strength
Durability
Confidence
Evidence
Publishes tariff rates and executes list-price increases and surcharges; realized pricing remains cycle- and capacity-dependent.
Erosion risks
- Downcycle pricing pressure and capacity oversupply
- Customer pushback on surcharges
Leading indicators
- Yield per hundredweight
- Contract renewal win/loss
- Fuel surcharge tables and index changes
Counterarguments
- List increases may be offset by discounting
- Large shippers can re-bid lanes frequently
Corporate, other, and eliminations (Dataworks, Office, Logistics)
Integrated logistics/3PL, freight forwarding, retail print & ship access, and supply-chain data products
Includes FedEx Dataworks, FedEx Office, and FedEx Logistics (including FedEx Supply Chain) reported within Corporate, other, and eliminations.
Scope Economies
Supply
Scope Economies
Strength
Durability
Confidence
Evidence
Logistics and trade services can bundle with the core transportation network (customs clearance at hubs, forwarding, supply-chain services), improving win rates and lowering customer acquisition costs.
Erosion risks
- 3PL and forwarding markets are highly competitive with low switching costs
- Customers split providers to avoid concentration risk
Leading indicators
- Attach rate of logistics services to shipping accounts
- Growth in customs brokerage / forwarding volumes
Counterarguments
- Best-of-breed forwarders/3PLs can match service breadth without owning parcel networks
- Shippers may prefer neutral 3PLs that are not also a carrier
Data Network Effects
Network
Data Network Effects
Strength
Durability
Confidence
Evidence
Large shipment flows generate operational and trade data; Dataworks aims to turn this into reusable models and customer-facing insights that can improve network performance and customer experience.
Erosion risks
- Comparable analytics tools available from independent software vendors
- Data privacy and security incidents
Leading indicators
- Adoption of FedEx digital platforms/products (where disclosed)
- Measured network efficiency improvements attributable to data/ML
Counterarguments
- Data alone is not a moat without differentiated products and distribution
- Customers may not share enough upstream/downstream data for end-to-end optimization
Brand Trust
Demand
Brand Trust
Strength
Durability
Confidence
Evidence
FedEx brand recognition helps sell adjacent services (print, trade, logistics), but these markets remain competitive and price-sensitive.
Erosion risks
- Brand is less differentiating in commoditized service categories
- Reputation spillover from delivery/service issues
Leading indicators
- Cross-sell penetration across customer base
- Customer satisfaction for Office/Logistics offerings (where disclosed)
Counterarguments
- In 3PL/forwarding, relationships and execution often outweigh consumer brand recognition
Evidence
Paraphrase: Federal Express serves 220+ countries via an integrated air-ground network with ~63k drop-off locations, ~700 aircraft, and ~175k vehicles (FY25).
Supports the physical density/coverage claim and the asset intensity behind it.
Paraphrase: The filing states the global network is difficult/costly/time-consuming to replicate and references an all-cargo air fleet and global GDP coverage.
Direct company framing of replication difficulty (barrier to entry).
Paraphrase: The filing describes a large U.S. surface facility footprint and automated unloading/sorting that handles millions of packages daily.
Supports scale + automation translating into lower handling cost per package at scale.
Paraphrase: FedEx describes operating a unified air-ground express network under the FedEx brand after consolidating operating companies.
Supports the brand as a shared enterprise asset leveraged across services.
Paraphrase: Federal Express implemented an average ~5.9% U.S. list price increase effective Jan 6, 2025 and uses demand/fuel surcharges that are adjusted over time.
Evidence of recurring pricing actions and surcharge tools.
Showing 5 of 13 sources.
Risks & Indicators
Erosion risks
- Amazon Logistics share gains in U.S. parcels
- Regional/alternative last-mile carriers grow
- Aviation emissions regulation and SAF costs
- Service mix shifts toward lower-margin deferred services
- Automation technologies diffuse to competitors over time
- Volume volatility reduces density and raises unit costs
Leading indicators
- Cost per package / cost per stop
- On-time performance and service quality metrics
- Network 2.0 rollout progress
- Aircraft utilization and load factor
- Productivity metrics (packages per hour, stops per route)
- Purchased transportation as % of revenue
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.