Wednesday, January 11, 2012

Strange Fedex pricing and opportunity

I had to ship a set of important documents to India. I opted to go with Fedex due to its brand. First thing that surprised me was how expensive it is still to ship a few pages of documentation to India from the US. I had to shell out close to 70 USD just to ship a few pages.

What as even more surprising is the quote that i got for 2 options. These are shown in the screenshot above. Did you notice ? The price for faster delivery is lower than the slower alternative.

It is hard to understand the rationale. One possibility is that fedex incurs inventory cost associated with all the packages in transit. I'd have to assume that if that is the logic the it should apply to larger packages which actually take up significant physical space.

Most likely it is a bug in the software.