taylor: i'm taylor riggs. let's look at how equities performed today. unfortunately, we pretty much undid all the gains we had yesterday after the federal reserve. it was technology and big tech stocks that bore the brunt of the selloff, off 2.5% to 2.6%. we highlight the lack of buyers that are stepping up into the market. you can see the buyers, every time the nasdaq has fallen more than 1%, it has done so. that has been a big losing day where the buyers are not showing up, at least for now. that is a recap of the markets. "what'd you miss?" starts right now.

romaine: here we are. it's a little more than a week away from christmas. a lot of consumers are checking their inboxes, looking to see whether their gifts are going to arrive on time. over the next 30 minutes, we will focus on that. we will focus on delivery companies working to get you your goods. the pandemic has bottled up supply chains and driven prices skyward but also created new business opportunities. we will look at how this reshaped industries going forward. we have to start with the behemoth, fedex. >> reported just after the close here in the u.s. granted, fedex is dealing with other challenges talking about supply chain issues, labor shortages which contributed $470 million to cuts. the good news is they are raising prices to offset that. they beat on profits for the quarter and actually raised

their full year eps forecasts. another thing to know, 5 billion dollars share backs. after hours trading, up more than 6% after the bell. taylor: let's analyze the fundamentals with our senior logistics analyst lee cresco. the after i was trading certainly seems to be positive, but if you read through the press release, there are still hints of labor shortages. they have pricing power but they are still highlighting transportation costs. how are you weighing this on the margins? >> you look at the net-net, it's a positive quarter for a company that hasn't had a lot of great things to say over the last couple of quarters. sentiment has been pretty low and stocks are down 8%. it is flat and that is around 20 32 -- 23% on the s&p. it has been a lag or.

looking at the numbers, the fedex freigh, it is strong u.s. yields or revenue per shipment, up around 14%. that is i'm sure great pricing and -- i'm sure. express also had pricing. you can see they really beat on the express side on the yield. you mentioned pricing power. all freight companies right now have pricing power whether you are a boat, plane, truck, or bus , you have pricing power because there are capacity issues across the supply and people need stuff move from point a to point b and they are willing to pay for it. romaine: talk about what we learned about the labor side. from point a to point b requires people. they have not automated everything just yet. how are they doing with regards to that end do you see any

additional wage pressures going forward? >> fedex, ups, amazon, trucking companies, railroad companies are all facing higher labor costs and all fighting for the same people. there is a small pool of people out there available to work and everyone is fighting for them. fedex had $450 million last quarter. this year it moved up to $470 million. not only are they paying up higher wages, but they are increasingly getting efficiencies put into their network because they don't have the right people or resources and the places they needed -- in the places they need it. if they don't have people in one hub, that means freight needs to be diverted or it might take more time for it to get processed, so the costs are driving that $470 million. we think that they will continue to face labor shortages.

the good news is that for them, their peak season is almost over and some of the seasonal employees might become full-time employees, which is usually the case. they can have a good pool of people they can turn to therese taft some of their networks where they need people. >> fedex says expected costs will subside in the second half of the fiscal year, at the same time, their comps will get tougher in terms of volume growth. how do you think of those forces that might be flipping the other direction? >> we are looking over the next 12 months. obviously they are on a different fiscal calendar than the normal calendar. this is their second quarter. if we look over the next month, the reality is that you will have volumes of really low single-digit growth on the ground and express side and good pricing. but you are also going to have better mix.

let's hope the economy continues to recover and continues to grow, and that will mean more business to business signs. that tends to have better profitability than the packages they delivered to your home because of the density that is involved and lower costs that are involved delivery 50 envelopes to a lawyers office, versus one amazon package with a stick of gum in it. they are just making so much more money on that business and you will see that. you will see need to be -- b to b grow at a higher rate than c to c. romaine: this show we are focused on the future of deliveries. fedex was the early pandemic winner as people were shuttered in their homes. if you look at the stock performance since the beginning of the year, it has been lagging to say the least. look at that.

>> it's pretty incredible because when you talk about the substitutes and pricing power of these companies, they really had it and it was that big pandemic winner, but something did change. romaine: let's keep the conversation moving. we are talking a little more about this. we do want to talk a little more about the logistics side of it. a few years ago, everyone woke up to the reality about amazon that they were not a retailer, they were a gigantic logistics company that was the appeal not only for investors but consumers as well we are. . starting to see a lot of other companies down the food chain figured this out and start to embrace it. how do you do it when you don't necessarily have the type of cash flow and the weight that amazon does? >> absolutely. we've seen interesting things including a retailer buying a logistics company in the past couple months. it is interesting to see new business models emerging, coming

out of covid and investments like that being made. the three pl business in the u.s. for example is highly fragmented. there are over 13,003 pl businesses and we expect to see opportunities for other investments and consolidation in that space. the key thing to remember as well are some comments about fedex and ups that these providers will be taking control of their own future through advanced technology. covid really destroyed many of the forecast models that they were running their business against. the big opportunities in the space with emerging businesses will be really data centric enterprises that will look to the data, look to new technologies like machine learning and the cloud, and sense what the new patterns are and really understand how the capacity needs to be reallocated, either within a business or via other consolidation and acquisitions.

i think that's what we will see over the next eight to 12 months. taylor: are you confident those may be an improved models and will do a better job of forecasting, and are the companies making appropriate investments in those? >> yes, they absolutely are making those investments. as technology leader at infosys, i spent all my days talking about optimizing technology and the great advancements available. helping get the best value from that is part of our job. . we are seeing that outcome with our clients. the question is, how fast can you go? and coming out of covid were all the patterns were disrupted, it's a matter of rebuilding that as quickly as possible through data scientists and all the great tools that are now available to us. sonali: is it also a matter -- kailey: is it also a matter of re-shortening supply chains? >> the thing that is consistent across supply chains and the

comments coming out of the fedex report, the workforce shortages are really dramatic. whether we talk about final delivery or warehouse staff, or the staff to unload tankers, working through the ports, the key issue will be the workforce. what we see in some of those nodes of the supply chain is automation. in warehouses, for example, autonomous trucks, things like that will be emerging in the next three to five years. the common theme across the inefficiencies and the challenges in the supply chain is the workforce. the increased wages will be attracting to some of these jobs but i think we've also heard some of these jobs are really challenging. amazon has certainly had their challenges with quality-of-life. there's no work from home in supply chain. we are working from home, driving vehicles. so to look through how we are

optimizing those assets including the workforce is a very important part of the conversation. romaine: that is certainly a side a lot of consumers don't see. i'm curious about your thoughts of the middlemen in the process and the idea that the companies find a way to go to the upside. we saw some companies take this approach and now we are seeing major corporations like nike with a bit of a traditional distribution channel are now doing well, selling directly off their own website. does it behoove these companies to move further into that space where they just cut out the reseller altogether? is there some beneficial relationship from the reseller that these companies can get? >> through this career, these conversations have come and gone. as we have new products and ways to engage with customers, it has become more easy for companies to go direct to consumer.

just challenges in the model, manufacturers often don't know how to price for a customer. they are typically focused on the b to b channel. they are used to sending out pallets of product to retail locations, not individually to customers. it does take a rethinking of the supply chain for a manufacturer to go direct to consumer. what we have seen is social media platforms like facebook and instagram creating that channel that has allowed many of these companies to go direct to customers and we are certainly seeing successes which is really impressive. still, the kinks remain. while it's easy to perhaps ship, nike for example is redeploying retailers in new ways, you have to consider the pretty significant level of returns that happens in e-commerce transactions. you have to be thinking in the

forward shipment and reverse for those and some of that supply chain has been evolving as we speak. taylor: we spoke early with -- earlier with the labor secretary marty walsh. . he spoke a lot about trucking. take a listen to what he had to say. >> the issue of trucking obviously started long before the pandemic. this issue is not just a supply chain issue. this is an industry issue, the issue of the pandemic magnified issue but as we looked at the trucking issue, myself, secretary buttigieg, and other departments realized it was a long-term problem here so we would need a better solution than simply putting a band-aid on the situation. taylor: elizabeth, is it a bigger issue than just the pandemic related issue? >> it is so many forces at play. it is the workforce. you've seen all the advertisements.

the number of nights home, the work quality, it is challenging, so people will tend to have very high turnover. the numbers i've seen from the truckee -- trucking industry turnover are shocking. part of it is the changing models and deploying. assets in different ways the workforce shortages, all of it is coming together and i think as marty's comments are spot on and will continue to be challenging. that is why we are seeing continued interest in the autonomous vehicles and it is taking root from a trucking standpoint. that would seem to be an important resolution for the workforce. romaine: one of theromaine: biggest issues. a wealth of insight here, we appreciate your time. elizabeth ebert, partner at infosys consulting. coming up, we will look at a

shorter distance view of what has been going on. delivery in 15 minutes? you have to have it. we will discuss the area of rapid delivery. before we go to that, take a listen to what some executives have said about what is going on. >> uber's traditional foray into delivery has been in the restaurant space, but it is a business that through the course of the pandemic has transformed to delivery of anything, and being able to do that how consumers and merchants want it. what i mean by that is grocery, alcohol, convenience. some folks want that in a scheduled way and some folks want it in an hour, some folks want it in 20 minutes. >> once we get the order in and we get it ready for three to five minutes for the driver to pick it up, it gets into the hands of the consumer in 20 to 25 minutes so it's about quality and keeping that restaurant like

experience and getting it even closer by having this. >> we are happy about the markets and i think what we have seen is the potential for infrastructure. now we are around 550 million. this is already infrastructure cap. ♪

taylor: today, we are focused on the future of delivery. today, bloomberg learned a start up is in discussions to go public as early as the second half of 2022. we spoke to the ceo earlier this

week about the company's growth and expansion plans. >> we launched all over the u.s. we are now in new york city, los angeles, and pressing the accelerator in the u.k. and france as well where we have seen tremendous growth in the last couple weeks. . this week alone, we brought 100% growth over -- week over week. taylor: let's bring in jackie who covers these delivery companies for bloomberg news. is this a sign of confirmation the business model is working, or irrational exuberance? reporter: it's probably a little bit of both, but is certainly a proof point for gopuff, which just came on the scene in 2013. it's one of the more mature companies doing it out there, but for them especially, this funding is only assigned they are ready to take it to the next level. for the startups that have also sprouted around them, a lot of them coming from overseas, all

really starting to want to take more of that instant boom commerce space, more of the market share as it grows. romaine: help look at the distinction in business models. when we look at doordash, seamless, grubhub, they are just middlemen, they don't take on anything. these companies keep inventory in stock. they have physical locations. i'm told to a certain extent, they have actual employees, not just gig workers. reporter: that's right. that's how they are able to make this 15 to 10 minute delivery model worked. these densely populated cities, limited selection in terms of stock, and they don't rely on gig workers working on multiple apps. they are full-time employees. because the radius is so much smaller to the liver, they can do that quickly.

kailey: it's a small radius yet it seems there are and astronomically growing number of companies operating in the same space. i would have to imagine some companies will not be able to survive or at least they have to consolidate. >> and you are already seeing some of the newer companies that don't have a lot of funding, but were trying to hop on the bandwagon. they started to struggle to fund raise. you have a gorilla raising one tier, another -- it goes on and on. they are everywhere. romaine: disrupting refrigerators? >> absolutely. in terms of consolidation, doordash has already taken a stink -- stake. you might see these larger delivery trance moving towards that as well. taylor: can you comment about the talent pool for this? seems like the companies are all competing for the same talent. are they subsidizing each other out of the market? reporter: customer acquisition

cost is the biggest they have. they are trying to get more people to their apps with free delivery, deals. this is not something that's going to be sustainable longer-term. . investors have certainly started to ask more questions around how long are you going to spend this kind of money and burn through cash to get these customers? at some point, there does need to be a sign that it's paying off. kailey: especially if they have full-time employees and they are paying benefits and a sizable minimum wage, what is the realistic margin opportunity? reporter: with food delivery, you have more mature economics. there isn't the cost of real estate. there isn't a cost of middlemen putting food in the bag or checking out. you do have a more streamlined cost model here because there are not people disrupting at the

checkout line. you are not facing these slowdowns that would up the price once you see on the app like instacart. the margin still have a ways to go. there's money to be made. romaine: taylor, you are our chief gen z correspondent. [laughter] taylor: i honestly don't know, but 15 minutes is a really short amount of time. >> and it's not as expensive as you would think. zero dollars delivery and you get it in 5 -- really, i get mine in seven minutes. taylor: thank you. we will be back with our final thoughts next. i'm the gen z correspondent, apparently. ♪

romaine: we took a look today what's going on in the delivery space. taylor: we talked about not only the last miles, now 50 minutes and now like seven minutes. kailey: and the last five minutes of the show.

>> from the heart of where innovation, money and power collide in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i'm emily chang in san francisco and this is luber technology. coming up, covid cases arise and return to office plans fall. how wall street andco