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FedEx Corporation, founded in 1971 and formerly Federal Express Corporation and later FDX Corporation, is an American multinational conglomerate holding company focused on transportation, e-commerce, and business services based in Memphis, Tennessee.
FedEx provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions through operating companies competing collectively, operating collaboratively, and innovating digitally as one FedEx.
FedEx’s strategy allows it to manage the business as a portfolio in the long-term best interest of the enterprise. As a result, FedEx bases decisions on capital investment and service additions or enhancements upon achieving the highest overall long-term return on capital for its business as a whole.
FedEx’s business strategy also provides flexibility in structuring its network to align with varying macroeconomic conditions and customer demand for the market segments in which they operate, allowing FedEx to leverage and manage change.
Volatility, uncertainty, and evolution have become the norms in the global transportation market, and FedEx can use its flexibility to accommodate changing conditions in the global economy.
Over the last 50 years, FedEx has built networks that have created a differentiated and unmatched portfolio of services while continuously evolving to meet the changing needs of its customers and the market. In recent years, FedEx made significant investments in its service network to build infrastructure and services to meet increased e-commerce demand.
Through one FedEx and Network 2.0, FedEx is building a simplified experience to better serve its customers with enhanced capabilities and transforming to operate with more flexibility, efficiency, and intelligence.
Additionally, the size and scale of its global network give FedEx key insights into global supply chains and trends. This foundation provides immense data that FedEx can use to build better insights, improve the customer experience, and differentiate its service offerings.
To fully harness the power of this data, FedEx Dataworks is focused on putting its data into context and using it to enhance the efficiency of the FedEx network and its customers’ supply chains, as well as the end-to-end experience of its customers.
Through its global transportation, information technology, and retail networks, FedEx helps to facilitate an ongoing and unprecedented expansion of customer access — to goods, services, and information. FedEx generated approximately $90 bn in revenue in 2023. Let’s now understand how the massive business of FedEx works.
FedEx works in four business segments:
FedEx Express invented express distribution 50 years ago in 1973 and remains the industry leader, providing rapid, reliable, time-definite delivery of packages and freight to more than 220 countries and territories through an integrated global network.
FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight, connecting markets that generate more than 99% of the world’s gross domestic product through door-to-door, customs-cleared service, historically with a money-back guarantee.
As of July 13, 2023, the money-back guarantee remains suspended for certain FedEx Express services to balance its focus on service and safety. FedEx Express’s unmatched air route authorities and extensive transportation infrastructure, combined with leading-edge information technologies, make it the world’s largest express transportation company.
As of May 31, 2023, FedEx Express employed approximately 245,000 employees and had about 70,000 drop-off locations (including FedEx Office stores and FedEx OnSite locations, such as nearly 17,000 Walgreens, Dollar General, and Albertsons stores), 700 aircraft, and more than 82,000 vehicles in its global network.
FedEx Express offers various U.S. domestic and international shipping services to deliver packages and freight. FedEx Express provides three U.S. domestic overnight package delivery services: FedEx First Overnight, FedEx Priority Overnight, and FedEx Standard Overnight.
- FedEx Express’s primary sorting facility in Memphis is the center of the company’s multiple hub-and-spoke system. A second national hub facility is located in Indianapolis.
- Facilities in Anchorage, Paris, Cologne, Guangzhou, and Osaka serve as sorting facilities for express package and freight traffic moving to and from Asia, Europe, and North America.
- Additional primary sorting and freight handling facilities are located at Narita Airport in Tokyo and Stansted Airport outside London. The facilities in Paris, Cologne, Guangzhou, and Osaka are also designed to serve as regional hubs for their respective market areas.
- A facility in Miami — the Miami Gateway Hub — serves South Florida, Latin American, and Caribbean markets. A central air hub near Liege, Belgium, connects specific large European markets.
- In addition to its worldwide air network, FedEx Express operates road networks in North America, Europe, the Middle East, Asia, Australia, and South America. FedEx Express’s unique European road network connects more than 45 countries and territories through 28 transit hubs and more than 700 stations.
FedEx Ground Segment
By leveraging the FedEx brand, maintaining a low-cost structure, and efficiently using information technology and advanced automation systems, FedEx Ground continues to enhance its competitive position as a leading provider of business and residential ground package delivery services.
As of July 13, 2023, the money-back guarantee for all FedEx Ground services remains suspended to balance focus on service and safety. FedEx Ground serves customers in the North American small-package market, focusing on business and residential delivery of packages weighing up to 150 pounds.
Ground service is provided to 100% of the continental U.S. population, and overnight service of up to 400 miles to nearly 100% of the continental U.S. population. Service is also provided to nearly 100% of the Canadian population. In addition, FedEx Ground offers service to Alaska and Hawaii through a ground and air network operation coordinated with other transportation providers.
The company offers FedEx Home Delivery service, which reaches 100% of U.S. residences. FedEx Home Delivery is dedicated to meeting the delivery needs of residential customers. It provides routine Saturday and evening delivery and premium options such as day-specific, appointment, and signature delivery.
FedEx Ground operates a highly flexible network of over 700 sortation and distribution facilities, including over 160 fully automated stations, in the U.S. and Canada as of May 31, 2023. FedEx Ground operates primarily with more than 100,000 vehicles owned or leased by independent service providers.
Following a network expansion in recent years that substantially increased FedEx Ground’s daily capacity through the addition of new facilities featuring the latest automated sorting technology as well as the development or relocation of existing hubs and other facilities, in 2023, the company rationalized its operations in response to lower volumes by consolidating sorts and canceling several planned network capacity projects, continuing to manage staffing levels effectively, and reducing Sunday delivery operations.
FedEx Ground continues to leverage opportunities to maximize the utilization of existing facilities and deploy new technologies to enhance operational efficiency. Advanced automated unloading and sorting technology is used to streamline handling millions of packages daily.
FedEx Ground yard management systems, which interact with GPS tags on each trailer and create geofences around FedEx Ground facilities, automatically notify the control center when a trailer arrives and departs.
Using overhead laser and six-sided camera-based bar code scan technology, hub conveyors electronically guide packages to their appropriate destination chute, where they are transported to their respective destination stations for local delivery.
FedEx Freight Segment
FedEx Freight is a leading North American provider of LTL freight services, offering choice, simplicity, and reliability to meet the needs of LTL shippers — FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight Economy, when a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-commerce market for delivery of big and bulky products to or through the door for residences and businesses.
FedEx Freight can match customers’ time-critical needs with industry-leading transit times through its many service offerings. With the expansion of FedEx electronic solutions, LTL shippers have the convenience of a single shipping and tracking solution for FedEx Freight, FedEx Express, and FedEx Ground.
These solutions simplify freight shipping and give customers easy access to their account information. The FedEx Freight Advance Notice feature available on FedEx Freight Priority shipments uses the company’s innovative technology systems to proactively notify FedEx Freight customers via the Internet, e-mail, or fax when a shipment may be delayed beyond its estimated delivery date, providing customers with greater visibility and control of their LTL freight shipments.
FedEx Freight also offers LTL Select, a free cloud-based, multi-carrier transportation management system that gives customers visibility into all available carriers, their pricing in one location, and the ability to book service and make payments.
FedEx Freight uses radio frequency identification technology and customized software to improve shipment visibility on its docks and enhance custodial control at the handling unit level. FedEx Freight Direct addresses the growing e-commerce market for big and bulky products.
As of May 31, 2023, the FedEx Freight segment operated nearly 30,000 vehicles from a network of approximately 390 service centers with about 43,000 employees. The company plans to close and consolidate about 30 locations in the first quarter of 2024 and conducted several layoffs to match staffing with volume levels in 2023.
FedEx Services Segment
FedEx Services provides its other companies with sales, marketing, information technology, communications, customer service, technical support, billing and collection services, and additional back-office support.
Through FedEx Services, FedEx provides a convenient single point of access for many customer support functions, enabling it to sell the entire portfolio of transportation services more effectively and to help ensure a consistent and outstanding experience for the customers.
Marketing Strategy of FedEx
The FedEx brand name symbolizes outstanding service, reliability, and speed. Emphasis is continually placed on promoting and protecting the FedEx brand, one of its most important assets. As a result, FedEx is one of the most widely recognized brands in the world.
In addition to television, print, and digital advertising, FedEx promotes the FedEx brand through sponsorships and special events. For example, FedEx sponsors:
- The UEFA Champions League is broadcast in over 200 countries and territories worldwide.
- The season-long FedExCup competition on the PGA Tour and the FedEx St. Jude Championship, a PGA Tour event that has raised millions of dollars for St. Jude Children’s Research Hospital, is one of three annual FedExCup playoff events.
- The #11 Joe Gibbs Racing Toyota Camry was driven by Denny Hamlin in the NASCAR Cup Series.
- Additionally, FedEx is the “Official Delivery Service Sponsor” and “Official Office Services Provider” of the NFL, through which FedEx conducts events and other activities to promote the FedEx brand, such as the “FedEx Air & Ground” NFL Players of the Week and Players of the Year Awards.