The Financial Slide for FedEx Begins...

As I mentioned in my post earlier this month on the high-cost of overnight shipping, the players in that market are in trouble. It hasn't taken long for the impact of higher fuel prices to manifest itself at FedEx, the carrier most dependent on its overnight letter business.

When it costs $55 to send a contract from Seattle to New York, even the most frivolous company looks at changing its business model. In uncertain economic times, business managers are looking for ways to save money, and this dramatic increase in overnight shipping cost directly impacts profit margin for many businesses. They are asking themselves “if I am paying a $30 fuel surcharge at $4.00 a gallon, what will it be at $5?” They need a strategy to prevent further margin erosion.

So it's no surprise that FedEx last week announced that it has posted its first quarterly net-income loss in 11 years. As the Wall Street Journal reported, earnings announcements from other big transportation companies are expected to reflect a similar trend.

While it's unlikely that DocuSign has yet had much impact on FedEx's earnings, it's clear that the pressures of high-fuel prices and the need for businesses to operate more efficiently using electronic - rather than physical - systems will mark the beginning of a new era where businesses turn to the Internet rather than the Interstate to get agreements completed. While FedEx is seeing its first loss in 11 years, DocuSign is seeing record-setting growth.