Academic Master

Business and Finance

Frederick W. Smith Founder of FedEx

Frederick W. Smith, the founder of FedEx, an undergraduate at Yale University, proposed a paper, identifying inefficiency in shipping services. He suggested a solution that was, to carry out the deliveries at night when airports are not crowded. His idea was not well perceived by the professor but Frederick did not give up and found out that the companies used long and inefficient routes to deliver the goods. He worked on his collage idea and figured out a way to get packages and delivered within two days. FedEx was originated in 1971 and officially started operating on 17 April, 1973. The company had 389 employees and distributed 189 parcels in one night to 25 United States cities. In 1983, FedEx was recognized as the first company to earn 1 billion dollar revenue, within 10 years without acquisitions or mergers. They now own the industry and ranked as second largest express delivery company globally.

FedEx is a parent company with its operating divisions; FedEx Ground, FedEx Express, FedEx Services and FedEx Freight. These divisions are managed under the FedEx brand but operate comparatively independent and each division has its own business mission. FedEx Ground is providing residential and commercial customers door-to-door distributions of small parcels in Canada and U.S. FedEx Express is responsible for airline cargo facility. FedEx Services is providing informational technology, sales, marketing and administrative support for linked transportation services. FedEx Freight is delivering LTL (less-than-truckload) freight services. The company now concentrates on their supply chain management and global logistics through e-business. It offers clients with e-commerce, a business service, and a board transportation.  FedEx was amongst the very 1st to foresee how the Internet could turn into a means for carrying shipment information and tracking. In 1994, FedEx propelled its Website that permitted clients to track parcels online and to do business through the Internet. The firm has developed from an $8 billion set-up to an $18 billion today. The core of FedEx Corporation continues growth is due to the shift from a physical package mover to an e-business.

FedEx supply chain provides order fulfillments, freight management, and transportation management for their customers. Some focused and personalized facilities are also delivered, such as, reverse logistics and return management. FedEx implements multi-business models such as B2G (business to government model), B2C (Business to customer model) and B2B (business to business model). This allows the company to provide variety of services to the customers and strengthen its market competency. Three major competitors of FedEx are TNT, UPS and DHL. FedEx cooperate with these logistics companies to achieve better infrastructure and transportation network (business to business model).

The corporation focused on the fundamental business of fast delivery and provided instant carriage services to the customers worldwide. The company’s development depends upon the management performance of the managers to manage the people or teams, working under them effectively. FedEx used balanced scorecard to analyze performance management. Balance scorecard measures company’s performance to attain a balance between financial and non-financial measurements. Another effective way used by the company to control the departments globally, is two-way communication to deliver a strategy. This method motivates employees and help them feel the part of the business. For instance, the director can deliver the strategy to the company’s staff via video conference, all over the world. Effective communication between managing bodies can employees led to effective work environment. FedEx focuses on communication to meet employee’s social needs and self-esteem needs to make the company’s management more efficient and effective. The employee at the company respond positively to the faith put on them and exhibited exemplary commitment towards their work. FedEx have purple pipeline program to train employees become innovation. FedEx labs are the facilities, opened in Oct. 2006, functions as an incubator for ground-breaking ideas. Unlike UPS (FedEx competitor), the company not only focuses on business area to generate maximum profit but also train and develop their employees for future growth. When FedEx was going through a severe economic difficulties, the employees were ready to use their personal credit cards and sell their belongings to buy fuel to distribute the parcels to the clients (Putano, 2018).

FedEx conduct an SFA program online every year to get a complete picture of leadership and managerial skills of its managers.



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