Top company by employee – 98 – FedEx Corporation – Tennessee US
Ownership: Publicly quoted/held
Previous rank: N.A.
2011 revenue ($ millions): $42,680
What makes it so great?
In a recent effort to cut costs, the shipping behemoth announced it would eliminate several thousand positions, but with voluntary buyouts instead of mass layoffs.
|Traded as||NYSE: FDX
S&P 500 Component
|Founded||Little Rock, Arkansas (1973)
as Federal Express Corporation
|Founder(s)||Frederick W. Smith|
|Headquarters||Memphis, Tennessee, U.S.|
|Key people||Frederick W. Smith
(Chairman, President & CEO)
|Products||Post delivery, express mail,freight forwarding, third-party logistics|
|Revenue||US$ 42.7 billion (2012)|
|Operating income||US$ 3.19 billion (2012)|
|Net income||US$ 2.03 billion (2012)|
|Total assets||US$ 29.9 billion (2012)|
|Total equity||US$ 17.1 billion (2012)|
|Subsidiaries||Office, Express, Ground,Freight, Custom Critical, Supply Chain, Trade Networks, Services|
FedEx Corporation is an American global courier delivery services company headquartered in Memphis, Tennessee. The name “FedEx" is a syllabic abbreviation of the name of the company’s original air division, Federal Express, which was used from 1973 until 2000.
FedEx Corporation is a Delaware corporation, incorporated October 2, 1997. FDX Corporation was founded in January 1998 with the acquisition of Caliber System Inc. by Federal Express. With the purchase of Caliber, FedEx started offering other services besides express shipping. Caliber subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited shipping provider; Viking Freight, a regional, less than truckload freight carrier serving the Western United States; Caribbean Transportation Services, a provider of airfreight forwarding between the United States and the Caribbean; and Caliber Logistics and Caliber Technology, providers of logistics and technology solutions. FDX Corporation was founded to oversee all of the operations of those companies and its original air division, Federal Express. In the 1980s, FedEx planned, but later abandoned, a joint service with British Airways to have BA fly a Concorde to Shannon, Ireland with FedEx packages onboard and then FedEx would have flown the packages subsonically to their delivery points in Europe. Ron Ponder, a vice president at the time, was in charge of this proposed venture. In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. A new subsidiary called FedEx Corporate Services was formed to centralize the sales, marketing, customer service for all of the subsidiaries. In February 2000, FedEx acquiredTower Group International, an international logistics company. FedEx also acquired WorldTariff, a customs duty and tax information company, TowerGroup and WorldTariff were re-branded to form FedEx Trade Networks.
FedEx Corp. acquired privately held Kinko’s Inc. in February 2004 and rebranded it FedEx Kinko’s. The acquisition was made to expand FedEx retail access to the general public. After the acquisition, all FedEx Kinko’s locations exclusively offered only FedEx shipping. In June 2008, FedEx announced that they would be dropping the Kinko’s name from their ship centers, with FedEx Kinko’s changing toFedEx Office.
In December 2007, the Internal Revenue Service of the United States ‘tentatively decided’ that FedEx Ground Division might be facing a tax liability of $319 million for 2002, due to misclassification of its operatives as independent contractors. Reversing a 1994 decision which allowed FedEx to classify its operatives that own their own vehicles, the IRS is auditing the years 2003 to 2006, with a view to assessing whether similar misclassification of operatives has taken place. FedEx denies that any irregularities in classification have taken place, but is facing legal action from operatives claiming benefits that would have accrued had they been classified as employees.
On October 22, 2008, the Internal Revenue Service withdrew its tentative assessment of tax and penalties for the 2002 calendar year ($319 million plus interest) against FedEx Ground Package System, Inc. (“FedEx Ground”) relating to the classification of FedEx Ground’s owner-operators for federal employment tax purposes.
In June 2009, FedEx began a campaign against United Parcel Service (UPS) and the Teamsters union, accusing its competitor of receiving a bailout in an advertising campaign called “brown bailout". FedEx claims that signing the Federal Aviation Administration re-authorization bill, which would let some of its workers unionize more easily (and, according to the Memphis-based company, “could expose [its] customers at any time to local work stoppages that interrupt the flow of their time-sensitive, high-value shipments”), is equivalent to giving UPS a ‘bailout’. Independent observers have heavily criticized FedEx’s wording, claiming that it was “an abuse of the term". FedEx Express employees are regulated under the Railway Labor Act.
As of 2012, FedEx experimented with electric fleet vehicles.
On August 13, 2012, FedEx made an offer to buyouts to cut costs, most likely to come from the express and services unit.
On January 14, 2013, FedEx named Henry Maier CEO and President of FedEx Ground, to take effect after David Rebholz retired on May 31, 2013.
Operating units and logos
FedEx is organized into operating units, each of which has its own version of the wordmark, designed by Lindon Leader of Landor Associates, of San Francisco, in 1994. TheFed is always purple and the Ex is in a different color for each division and grey for the overall corporation use. The original “FedEx" logo had the Ex in orange; it is now used as the FedEx Express wordmark. The FedEx wordmark is notable for containing a hidden right-pointing arrow in the negative space between the “E" and the “X", which was achieved by designing a proprietary font, based on Univers and Futura, to emphasize the arrow shape.
- FedEx Express (Orange “Ex"): The original overnight courier services, providing next day air service within the United States and time-definite international service. FedEx Express operates one of the largest civil aircraft fleets in the world and the largest fleet of wide bodied civil aircraft; it also carries more freight than any other airline.
- FedEx Ground (Green “Ex"): Guaranteed day-definite delivery within Canada and the United States at a cost savings as compared to time-definite FedEx Express. Uses a large fleet of trucks which are owned by the independent owner/operators and drivers areindependent contractors who control individual delivery routes and territories. Formerly Roadway Package System (RPS).
- FedEx Home Delivery: A division of FedEx Ground, specializing in residential delivery Tuesday through Saturday and offers delivery options to provide more flexibility for residential recipients. The logo includes a drawing of a dog carrying a package . FedEx Home Delivery only operates in the United States. In the US it is not uncommon for Home Delivery packages to be delivered by stander Ground trucks, supplying no additional services for the up charge. To make up the difference, FedEx Groundin Canada performs the business deliveries and residential deliveries.
- FedEx SmartPost (Grey “Ex"): Consolidates parcels from merchants such as e-commerce and catalog companies and uses theUnited States Postal Service for the final delivery. Formerly the independent company Parcel Direct until FedEx acquired them for $120M in 2004.
- FedEx Freight (Red “Ex"): Less than truckload (LTL) and other freight services. The second largest LTL carrier in the United States, with $4.5 billion in revenue for 2008.
- FedEx Freight, Inc: Formerly American Freightways, Viking Freight, and Watkins Motor Lines.
- FedEx Freight Canada: Formerly Watkins Canada Express.
- FedEx Custom Critical: (Blue “Ex") Delivers urgent, valuable, or hazardous items using trucks and chartered aircraft. Freight not accepted for transport includes perishable food, alcohol, livestock, household goods, hazardous waste and money. Drivers are independent contractors who own their vehicles. Service in Mexico uses interline carriers. Formerly Roberts Cartage or Roberts Express.
- FedEx Trade Networks (Yellow “Ex"): Provides services relating to customs, insurance, and transportation advice. Formerly C.J. Tower & Sons, then Tower Group International.
- FedEx Supply Chain Services (Grey “Ex"): Provides logistics services including Critical Inventory Logistics, Transportation Management Services, Fulfillment Services, etc. Formerly Roadway Logistics System, then Caliber Logistics.
- FedEx Corporate Services (Grey “Ex"): Provides global marketing, planning and information technology (IT) services for the other FedEx operating companies.
- FedEx TechConnect: Offering a customer service toll-free telephone line for customer questions. It is operated by an automated operator then will prompt the user to a live agent for uses of tracking, claims, scheduling pick-ups (Express, Ground, Same Day, Custom Critical, Freight Express, and Freight LTL), compliments and complaints, locations (both staffed counter locations and drop-boxes), ordering supplies, setting up FedEx accounts, billing etc. Formerly FCIS orFedEx Customer Information Services.
- FedEx Office (formerly FedEx Kinko’s) (Blue “Ex"): The retail arm of the corporation, offers copying and digital printing, professional finishing, document creation, Internet access, computer rentals, signs and graphics, direct mail, Web-based printing, and FedEx shipping. Formerly an independent company, known as
Kinko’s until it was acquired by FedEx in 2004 and rebranded to FedEx Kinko’s. In June 2008 the company was finally rebranded as FedEx Office.
- FedEx Office and Print Centers: Provides services such as copying, printing, Internet access and FedEx shipping.
- FedEx Ship Centers: Provides a central location for FedEx customers to deposit their packages for shipping, also offering a self-service photocopy and fax machine, office products for packing and shipping, boxes and packaging services. Formerly, these locations were called FedEx World Service Centers.
- Both FedEx Office and Print Centers and Ship Centers now offer Hold at Locations for FedEx Ground & FedEx Expressshipments for easy pick up. Transfer to Office/Ship centers takes 1 to 2 business days (example: calling the customer service line one day prior to pick up. This ensures package is put with proper route of courier that services that area).
- FedEx Office counts with its own FedEx Couriers for Center to Center and local customer deliveries.
- FedEx SameDay City (Grey “Ex") a division of FedEx office offers a delivery service between select ZIP codes in as little as two hours
FedEx SameDay City allows a between: Standard, providing pickup by noon and delivery by the end of the day, or Priority, providing delivery within 2 hours.FedEx SameDay City is currently is expanding in all major cities across the country and is planning on becoming its own operating unit in the next five years.
The Standard Carrier Alpha Code (SCAC) is a unique code used to identify transportation companies. It is typically two to four alphabetic letters long. It was developed by theNational Motor Freight Traffic Association in the 1960s to help the transportation industry for computerizing data and records. FedEx’s codes include:
- FDE – FedEx Express
- FDEG – FedEx Ground
- FXFE – FedEx Freight
- FDCC – FedEx Custom Critical
- FXO – FedEx Office
- FSDC- FedEx Same Day City
Political donations and lobbying
According to the Center for Responsive Politics, FedEx Corp is the 21st largest campaign contributor in the United States. The company has donated over $21 million since 1990, 45% of which went to Democrats and 55% to Republicans. Strong ties to the White House and members of Congress allow access to international trade and tax cut rebates as well as the rules of the business practices of the United States Postal Service. In 2001, FedEx sealed a $9 billion deal with the USPS to transport all of the post office’s overnight and express deliveries.
During the first three months of 2010, FedEx spent nearly $4.9 million lobbying the federal government (UPS, FedEx’s main competitor, spent $1.6 million on lobbying over the same period), a 4% increase from the $4.7 million spent during the last quarter of 2009, but more than twice what it spent on lobbying during the first quarter of 2009.
Awards and Honors
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Some of FedEx’s ad campaigns:
- “When it Absolutely, Positively has to be there overnight" – 1978–1983
- “It’s not Just a Package, It’s Your Business" – 1987–1988
- “Our Most Important Package is Yours" – 1991–1994
- “Absolutely, Positively Anytime" – 1995
- “The Way the World Works," 1996–1998
- “Be Absolutely Sure," 1998–2000
- “This is a Job for FedEx," 2001–2002
- “Don’t worry, there’s a FedEx for that,” 2002–2003
- “Relax, it’s FedEx," 2004–2008
- “We Understand," 2009–present
- “WeLiveToDeliver" 2009–present
- “Brown Bailout" 2009–present
- “The World On Time" 2009–present
John Moschitta ad
In 1981, their advertising firm Ally & Gargano hired performer John Moschitta, Jr., known for his fast speech delivery, to do an ad for Federal Express titled “Fast Paced World". This single commercial would be cited years later by New York as one of the most memorable ads ever.
- From 1997 to 2002, FedEx was the title sponsor of Champ Car World Series when it was known as CART. The series was known as the “CART FedEx Championship Series", which led to the official “Champ Car" designation in reference to the fact they were the FedEx Championship.
- FedEx became the sponsor of the No.11 NASCAR Sprint Cup Toyota owned by Joe Gibbs Racing in 2005. FedEx uses four (predominantly black) paint schemes to showcase its different products (Express, Freight, Ground, and Office), and in 2005 also ran a special scheme to promote a charity event at the FedEx St. Jude Classic golf tournament. The 11 car is driven by Denny Hamlin.
- FedEx previously sponsored the Formula One team McLaren. Prior to that FedEx had sponsored Ferrari, Benetton (now Renault) and Williams F1.
- FedEx does not currently sponsor any F1 team.
- FedEx currently sponsors the Chinese National Badminton Team. FedEx has sponsored the Chinese team since 2006.
- From 1989 to 2010, FedEx was the title sponsor of the Orange Bowl, played in Miami, Florida.
- FedExField, home of the National Football League’s Washington Redskins in the Maryland suburbs of Washington, D.C.
- FedEx sponsors FedExForum, home of the NBA‘s Memphis Grizzlies and the University of Memphis men’s basketball team.
- Beginning in 2007, FedEx became the title sponsor of the FedEx Cup, a championship trophy for the PGA Tour.
- ARAMEX (competitor)
- BAX Global (competitor)
- Cast Away (movie)
- Choice Logistics (competitor)
- DHL Express (competitor)
- Freight company
- Package delivery
- Point-to-point transit (shipping model)
- Purolator Courier (competitor)
- Spoke-hub distribution paradigm (shipping model)
- TNT N.V. (competitor)
- Top 100 US Federal Contractors
- United Parcel Service (competitor)
- Volumetric weight