FEDEX BEATS POSTAL SERVICE, UPS TO GET L.L. BEAN PACT

FEDEX BEATS POSTAL SERVICE, UPS TO GET L.L. BEAN PACT

L.L. Bean Inc. is relying on Federal Express Corp. to boost business, hoping express delivery service attracts more stay-at-home shoppers.

Last week, L.L. Bean of Freeport, Maine, signed a multi-year contract with the Memphis express carrier, giving FedEx 80 percent of 10 million packages shipped annually. Both companies declined to divulge contract specifics.Fedex beat out rival United Parcel Service (which was L.L. Bean's primary outbound carrier), and the U.S. Postal Service for the pact, which takes effect this week.

"Over the last couple of years there's been a war for those shippers who can contribute significant volume," said Ted Scherck, president of the Colography Group, an Atlanta aviation consultancy.

"We entertained several carriers, because we wanted faster delivery at no additional charge to our customers," said Scott Bryant, L.L. Bean's vice president of customer satisfaction. "We also wanted precision expected delivery times and better ability to track our shipments."

L.L. Bean in spring 1991 began charging customers for shipping for the first time. Currently, customers pay $3.95 per address for packages, regardless of their size or weight.

Mr. Bryant said with FedEx, delivery times for most L.L. Bean orders will be halved, depending on the customer's location.

"During the last couple of years, express delivery companies have made overtures to catalogers to provide customers with the express delivery option," said Chet Dalzell, a spokesman with the Direct Marketing Association in New York.

By choosing express delivery, instead of previous deferred service in which packages arrive sometimes in a week, catalogers can extend the holiday shopping season because they are able to deliver up until two or three days before the holiday, Mr. Dalzell said.

"Home shopping is really increasing. We knew it would, but frankly, we didn't think it would be this fast," said Dick Metzler, FedEx's vice president of catalog and remail services.

Mr. Metzler said FedEx controls about 75 percent of the express market side of the catalog industry and 10 percent of the overall catalog market. L.L. Bean expects to do $800 million in sales this year.

FedEx also plans to open a $4 million cargo center at Houston's Intercontinental Airport, employing 165 and doubling operations there. The expansion is in anticipation that the North American free-trade agreement will be approved.