Introduction
Federal Express Corporation, also known as FedEx, is an American company that offers various services, including transportation, e-commerce, and business services. The company was founded on May 5, 1971, by Frederick Wallace Smith in Little Rock, Arkansas, U.S. Currently based in Memphis, Tennessee, FedEx provides its services worldwide.
The company was formerly known as Federal Express Corporation from 1971 to 1997 and later changed its name to FDX Corporation until 2000 when it was renamed FedEx. It is one of the largest companies in today’s market and is a leading marketplace holder among shipping companies, as it was one of the first companies to provide shipping services. FedEx is widely recognized for its air delivery services.
History
The history of FedEx dates back to 1971 when Frederick Wallace Smith, a Yale University graduate, wrote about delivery services in his term paper. The company began operations in 1973 in Memphis.
On its first night of continuous operation, with 389 employees and 14 Dassault Falcon jets, the company delivered 186 packages to 25 U.S. cities, which was a great start for Federal Express Corporation back then. After the continuous operation of the company, in 1983 Federal Express became the first business to achieve the status of reaching US$ 1 billion in revenue without any mergers and acquisitions.
In this same year, Federal Express acquired Flying Korea Co. Ltd as a General Services Administration of Federal Express in South Korea. So slowly within these years, the company started its operation in Europe and Asia.
In 1985, the company began regular flights to Europe, further paving the way for its journey to more success and growth. In 1989, Federal Express acquired Flying Tigers to expand its international territories and establish its first operation in Dubai.
Second Phase
In the year 1994, Federal Express adopted its nickname “FedEx” and within the same year, the company launched its transportation website named fedex.com.
At the start of the 21st century, parent company FDX was renamed to FedEx Corporation, and Services are divided into companies that operate independently yet compete collectively: FedEx Express, FedEx Ground, FedEx Global Logistics, FedEx Custom Critical, and FedEx Services. FedEx then continued its growth from the early 2000s and at present has become a global brand providing services to the whole world. FedEx acquired many other competitors.
In February 2004, FedEx Corporation purchased Kinko’s, Inc., a privately held company, and transformed it into FedEx Kinko’s intending to enhance its accessibility to the public. Following the acquisition, all FedEx Kinko’s branches exclusively provided FedEx shipping services. However, by June 2008, FedEx opted to rebrand its shipping centers, replacing the Kinko’s name with FedEx Office. Additionally, in September 2004, FedEx acquired Parcel Direct, a company specializing in parcel consolidation, which was then renamed FedEx SmartPost.
In April 2015, FedEx acquired TNT Express, a competitor, for €4.4 billion ($4.8 billion; £3.2 billion) to bolster its operations in Europe.
In February 2016, FedEx introduced FedEx Cares, a global philanthropic initiative, pledging to invest $200 million by 2020 to benefit over 200 communities.
In March 2018, FedEx disclosed the acquisition of P2P Mailing Limited, a last-mile delivery service, for £92 million as part of its strategy to broaden its range of services.
In June 2019, FedEx announced its decision not to renew its $850 million contract with Amazon for U.S. domestic express delivery, accounting for 1.3 percent of its 2018 revenues. Subsequently, in August 2019, FedEx ceased ground deliveries for Amazon as well.
In December 2020, FedEx acquired ShopRunner, an e-commerce platform.
On March 29, 2022, founder Frederick W. Smith announced his retirement as CEO effective June 1, 2022, intending to assume the role of executive chairman. Raj Subramaniam, FedEx’s current president and COO, was appointed as Smith’s successor.
Finance
As of now, FedEx has a market cap of $61.89 billion. For the fiscal year 2023, FedEx reported net income of US $3.97 billion with a revenue of US $90.2 billion. At present context, FedEx employs over 530,000 employees and is actively providing its services worldwide with an operating income of $4.91 billion.
For the fiscal year 2024, FedEx anticipates:
- Revenue growth to remain flat or experience a low-single-digit percentage increase compared to the previous year.
- Earnings per diluted share are expected to range between $15.00 and $17.00 before factoring in adjustments related to the MTM retirement plans, and between $16.50 and $18.50 after excluding costs associated with business optimization initiatives.
- Anticipated permanent cost reductions of $1.8 billion stemming from the DRIVE transformation program.
- Effective tax rate (ETR) is estimated to be approximately 25% before considering adjustments related to the MTM retirement plans.
- Capital expenditure is projected to be $5.7 billion, with a focus on investments aimed at enhancing efficiency, such as modernizing fleets and facilities, optimizing networks, and implementing automation.
Division Of FedEx Operation Into Different Units
There are many units of FedEx but only some important units of FedEx are discussed here:
FedEx Express
It mainly handles all the overnight courier services and operates one of the largest civil aircraft fleets. So this unit is responsible for providing services of fast shipping of important documents like passports, legal documents, sensitive products like pharmaceuticals, and expensive items like jewelry.
FedEx Ground
This unit handles delivery services in commercial and residential locations in the US and Canada. It provides home delivery services in Canada. Its main motive is to provide delivery services in the US and Canada.
FedEx Logistics
FedEx Logistics offers a range of services including supply chain management, specialized transportation, cross-border e-commerce support, customs brokerage, and trade management technology. Formerly known as FedEx Trade Networks until January 2019, this division comprises various acquisitions made by FedEx.
FedEx Services
This unit provides the services to the other units of FedEx. All the basic services like marketing, sales, pricing, data analytics, forecasting, finance, customer service, information technology, etc are managed by FedEx services.
Other units include FedEx DATAWORKS(youngest unit) and FedEx OFFICE
Contribution In Sustainability
FedEx has been actively contributing to environmental conservation and sustainability by replacing its old parcel pickup and delivery fleet with zero-emission electric vehicles.
FedEx has committed $100 million to support the creation of the Yale Center for Natural Carbon Capture, which will be dedicated to researching methods for removing and storing the Earth’s surplus carbon. So FedEx has been contributing in alternative fuels which could reduce aircraft and vehicle emissions. Because of the FedEx Fuel Sense Program, approximately 221 million gallons of fuel were saved, and nearly 2 million metric tons of carbon dioxide emissions were avoided by FedEx.
Mission
According to the 2021 ESG(Environment Social Governance) report, FedEx Corporation aims to generate excellent financial results for its shareholders by delivering top-notch logistics, transportation, and associated business solutions through targeted operating entities. It will meet customer needs with the utmost quality tailored to each market segment served.
FedEx is committed to fostering mutually beneficial relationships with its employees, collaborators, and suppliers. Safety will always take precedence in all operational activities. Business activities will strictly adhere to the highest standards of ethics and professionalism.
FedEx Plans
FedEx as a big company has its competitors like United Parcel Service (UPS) and United States Postal Service (USPS), in their home country.
In the long term, FedEx is expected to increase EPS(Earnings Per Share) by 10%-15% per year with improved cash flows, profitable revenue, and more return to the shareowners. FedEx plans to grow more in the coming years by increasing its package business, and growing its business through e-commerce and technology with the introduction of new services and alliances.
Countless individuals have relied on this platform to send their packages worldwide, demonstrating FedEx’s status as a reliable shipping platform. With a focus on reliability, speed, and efficiency, FedEx stands as an important link between businesses and individuals. FedEx is marked as the best choice for time-sensitive shipments and overnight shipments which makes it a bit more expensive than other carrier services.
This article tries to give the context of FedEx for the one who does not know the company. So anyone reading the article can use the services of FedEx and get reliable and satisfactory outcomes. From the term paper of Yale University to being a multi-billionaire company, FedEx has come a long way and continues to provide its services for the easiness of people and all the people believing in them. In the end, FedEx has contributed in many sectors to the betterment of life of people whether it is in the field of environment protection or any other services.
