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FedEx Office takes bigger slice of commercial printing market with big Boeing deal
FedEx Office said Tuesday it is accelerating investment in high-end printing equipment to serve customers like Boeing Corp., which has signed a four-year contract for printing services starting March 1.
Eight years after entering the printing and office services business with its purchase of Kinko’s, FedEx Office appears to be moving toward a bigger slice of the commercial printing market.
It has installed nearly 8,000 new, networked printing devices in stores across the U.S. and Canada since May 2010 and recently added automated finishing equipment at an offset printing facility. By spring, it will deploy high-speed, grand-format inkjet printers in centralized production centers.
FedEx Corp. has pumped $943 million in capital dollars since mid-2009 into its FedEx Services segment, which includes FedEx Office, FedEx Services and FedEx TechConnect, according to a regulatory filing.
The investment is helping FedEx Office compete for business pioneered by Xerox and other companies, said Donald Broughton, an analyst with Avondale Partners.
The Boeing agreement sounds like "a Xerox-type document management service that FedEx has been offering and competing with the Xeroxes of the world for quite some time now," Broughton said. "This would just be another large customer in that portfolio of services."
The contract is good business for both companies, he added. Boeing is among FedEx’s largest suppliers and on the receiving end of billions in capital expenditures.
Broughton said FedEx Office has worked with the pharmaceutical giant Pfizer to provide sales representatives with drug brochures and other documentation on a print-on-demand basis.
FedEx Office stores provide the company’s shipping businesses, FedEx Express and FedEx Ground, with a key touchpoint for a valuable customer segment: individual or small shippers who pay full price, Broughton said.
FedEx Office announced plans in April 2010 to install Canon and HP printers at 1,800 locations in the U.S. and Canada and link the devices through HP’s Cloud printing service. Executives suggested the initiative would revolutionize the printing business by putting state-of-the-art equipment in all stores and networking the stores like one big office.
FedEx Office touted the contract with Boeing, a $68 billion global aerospace company, as proof of the printing venture’s progress.
FedEx Office will serve as Boeing’s primary print provider, producing critical operations, sales and large/grand format printed materials.
"We’ve got the depth and breadth to deliver customized solutions for our customers," said Aimee DiCicco, vice president of sales for FedEx Office. "Our corporate print solutions are a perfect fit for Boeing’s needs, and we’re thrilled to have the opportunity to leverage our capabilities for this leading Fortune 100 company."
The company said Agfa Graphics’ Jeti 3020 Titan inkjet printers and Zund G3 M-2500 digital table cutters will be installed at centralized plants to handle high-quality, grand-format production print runs.
A news release added that FedEx Office "will leverage this technology to produce a variety of signage and oversized prints for various customers, from big-box retailers with multiple locations across the country to large corporations and small businesses."
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