Fedex Case Study

History

In 1913, C.J. Tower & Sons, forerunner to FedEx Trade Networks subsidiary FedEx Trade Networks Transport & Brokerage, begins operation as a customs broker in Niagara Falls, N.Y. It was not until 1971 that Federal Express Corporation was founded in Little Rock, Ark. In 1975, FedEx installed the first drop box for the public and since then the company developed and maintained a strategic leadership in managing a broad group of transportation services, e-commerce and other business services. The company offers integrated business solutions through a network of subsidiaries operating independently, including: FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small-package ground delivery service; FedEx Freight, a leading provider of regional less-than-truckload freight services; FedEx Custom Critical, the world's largest provider of expedited time-critical shipments; and FedEx Trade Networks, a provider of customs brokerage, consulting, information technology and trade facilitation solutions. (www.fedex.com)

Financial strength and market share

FedEx has annual revenues of $20 billion and is the leading global provider of transportation, e-commerce and supply chain management services. FedEx accounts for a large market around the world. It is a fact that FedEx reported an average daily express package volume of 3,167,000 for the fiscal year ended May 2004, with U.S. volume of 2,771,000. Of those U.S. shipments, 1,846,000 (66.6%) were overnight shipments, and 667,000 (24.1%) were overnight letters. Total international daily package volume was 396,000, just 12.5% of all shipments, and FedEx does not break out overnight shipments (www.yahoo.com) (Appendix A)

Geographical coverage

The FedEx delivery company, the world's most important courier service, provides a good example of how intermodal transport operates. The FedEx network is built around a single hub airport located on each continent. The American hub is located in Memphis, Tennessee, the Near East one is located in Dubai, and Subic Bay, Philippines acts as the Asian hub and, Roissy, France represent the European hub. These redistribution points act as bridges between international relations. Beside its strategic hub airports web, FedEx is present in more than 325 airports in 212 countries around the world. (www.fedex.com)

Services

Services offered by FedEx companies include worldwide express delivery, ground small-parcel delivery, less-than-truckload freight delivery and global logistics, supply chain management and electronic commerce solutions. Services occurring domestically may take from 1 to 5 days, while its international delivery service could take place, typically in 1 to 7 business days. Also, FedEx Corporation is broken down into a family of smaller companies such as FedEx Express, FedEx Ground, FedEx Custom Critical, and FedEx Global Logistics according to their service.

Technology

Technology plays an important role at FedEx. It is a fact that FedEx uses electronic transactions and delivery for nearly 5 million shipments a day.

The company decided to develop an integrated messaging solution to easily link customers with its subsidiaries and to process the increasing number of business transactions. FedEx chose Global exchange Services’ (GXS) integration technology, Enterprise System, to develop FedEx Net. FedEx Net allows data exchange between computers of any platform at any time and anywhere. It connects trading partners, customers and vendors with near real-time, event-driven and interactive communication capabilities. FedEx Net processes more than 4.5 million business transactions per day and provides extensive professional data services to more than 5,000 global trading partners.(reference) customers can Receive Express and Ground tracking and invoice data, business documents covering shipping, tracking, invoicing and remittance. Since its implementation in 1996, FedEx has been able to save more than US $50 million by bringing in-house functions previously performed by third party VANs. (Reference). FedEx Trade Networks' is another electronic system that the company uses to gain worldwide network and thus solves transportation challenges every day around the world. (www.yahoo.com)

Advertising message

"Relax, its FedEx" Is the advertising message used to promote the company’s services. The main message throughout the campaign is that the portfolio of FedEx services will help small businesses meet their needs in a timely basis.

Corporate Strategy

FedEx