Absolutely, positively big magazine news: For most of the readers of this weblog, the interesting aspects of the magazine world relate to publishing and editorial. Yet, how magazines get from the printer to ones home is fascinating to magazine geeks (a term coined by the 17-year-old in my household) like me. So, here’s an alert to the folks who don’t follow this “post-press” life of magazines. The following is big news:
Quad/Graphics announced an agreement on Monday, August 9, to sell our Parcel Direct division to FedEx for $120 million, payable in cash. The transaction is expected to close as soon as possible after appropriate regulatory and legal conditions have been met.
“In six years, we have grown Parcel Direct from a tiny upstart into a leading parcel expeditor and now we are pleased that a premier company like FedEx will build on our record of growth,” said Thomas A. Quadracci, President & CEO of Quad/Graphics. “Our companies share similar business values, especially our commitment to customer and employee care. We have full confidence in FedEx as a growth-oriented business and top-level employer.”
Parcel Direct has built a profitable business by specializing in the consolidation and delivery of high volumes of lower-weight, less time-sensitive packages. Its unique business model capitalizes on the efficiencies of automated equipment and processes to expedite packages from businesses to consumers in two to six days using the U.S. Postal Service for in-home delivery. Parcel Direct employs approximately 450 employees from 12 distribution centers coast to coast and generated $250 million in sales in 2003.
In short, Quad has pioneered the means to combine and “co-ship” multiple magazine titles (and catalogs) in order to by-pass the U.S. Postal Service and drop the publications into the mail stream as close to your mailbox as possible. This strategy saves publishers both time and money. In the big picture of shipping and transportation, this may be a small transaction, but in the world of magazine distribution, it will be interesting to follow what can happen if Fed Ex applies its leverage and creativity to this facet of the business.
(Disclosure: Hammock Publishing has been a customer of Parcel Direct for a long time.)