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History of FedEx

History of FedEx. 1973 – Began operations as first integrated air/ground express carrier Delivered 186 packages to 25 U.S. cities using 14 Falcon jets. Today, FedEx connects more than 211 countries in less than 24-48 hours, & delivers 3.3 million packages daily

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History of FedEx

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  1. History of FedEx • 1973 – Began operations as first • integrated air/ground express carrier • Delivered 186 packages to 25 U.S. cities using 14 Falcon jets. • Today, FedEx connects more than 211 • countries in less than 24-48 hours, & • delivers 3.3 million packages daily • using 667 dedicated aircraft • (the world’s largest all-cargo fleet)

  2. Growth of the Express Delivery Industry • Increase in high-tech & high-value • added products as a % of all economic • activity • Rapid globalization in the marketplace • Fast-cycle logistics • Emergence of the Internet & • e-commerce

  3. Express Delivery • Express delivery services consist of: • The expedited collection, transport, & • delivery, • Of documents, printed matter, parcels, • and/or other goods, • While tracking the location of, & • maintaining control over, such items • throughout the supply of the service

  4. Life Before FedEx • Have you ever used express delivery? • What was it like to get a letter, • document or goods delivered rapidly, • securely and on-time?

  5. Express Delivery Industry • Express Delivery • Industry has become • the leading facilitator • of trans-continental • trade • International air cargo • accounts for about 2 • percent of the tonnage • moved, but over 40 • percent of the total • value of those goods • For every $1 spent on • express transportation, • companies can save • $1.50 in warehousing • & inventory costs

  6. U.S. Experience – Memphis • Approx. 53,000 direct and indirect • jobs • Since early 1980s, over 130 foreign- • owned firms from 22 countries • employing 17,250 workers • Companies such as Nike, Apple • Computer and Disney established • based on proximity to FedEx

  7. U.S. Experience – Memphis • From 1995-2000, company relocations • and expansions generated • - 10,000 new jobs • - Over 12 million square feet of new space • - Over USD 710 million in new investment • Economic impact on the surrounding • region from 1995 - 2004 is estimated • at USD 90 billion

  8. What Does a Modern Economy Need? • Philips Semiconductors, Inc. • business need - Consolidate & • centralize international supply chain - Customers frustrated due to consistently late shipments - No visibility of goods in transit due to multi-carrier network - Growing pipeline of inventory due to extended transit time

  9. Philips Semiconductors, Inc • Source plants spread over 17 countries • Each plant had different shipping • operation requiring Philips to • manage a network of 30 airlines, 6 • customs brokers & 8 freight carriers • Fragmented supply chain meant a 2 • week total transit time

  10. Philips Semiconductors, Inc • Information about product in transit • incomplete & delivery schedules • unpredictable • Customers demanded more speed & • reliability • Began stocking buffer supplies in • additional depots near customers • adding inventory

  11. Philips Semiconductors, Inc • What other industry could respond to this??? • The FedEx Solution: • One-stop transportation, warehousing & distribution network with extensive international capability

  12. Philips Order Management System

  13. Today’s Marketplace – Global • SMEs want to reach • new markets • Multinationals want to • ensure efficiency • Explosion of • e-commerce • - Internet-enabled • commerce in US to • reach USD 3 trillion in • 2004 (both B2B and • B2C)

  14. FedEx Hub-and-Spoke System • FedEx collects & transports shipments • from the door of the shipper to sorting • hubs located in the U.S., Europe& Asia • Shipments are unloaded, sorted & • transloaded w/in 4 hours onto outbound • planes for a time definite, customs- • cleared, delivery to the door of the • recipient as early as 8:am the next • business day

  15. Benefits of the Express Delivery Industry in ASEAN • In 1999, approx. $50 billion in • economic benefits generated from • exports, imports, transportation and • employment • 30 billion in export benefits • 20 billion in import benefits • Approx. 350,000 jobs created

  16. Creating the Express Delivery Infrastructure • GATS commitments in express delivery • services • - Remove barriers and limit new barriers • - Certainty of existing market conditions • Trade facilitation • - Partnership in infrastructure development

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