Fedex Corporation

(Part 2)


After being rejected by the government, Smith decided to spend money on an intensive advertising campaign to persuade anyone else who might be interested in such a venture. Smith realized that by using both air and ground transport, package deliveries did not have to take the most direct route, as long as they made it to their destinations within 24 hours.


Federal Express’s first years, however, were less than spectacular. Within the first three months of operation, the company had lost almost a third of its start-up cash. In fact, with the enacting of the Arab Oil Embargo of 1973, things became so grim, it was not uncommon for Federal Express drivers to dig into their own pockets to pay for gas.

There were other complications as well such also outdated federal aviation restrictions and run-ins with the International Brotherhood of Teamsters, all adding up to cause FedEx to lose $29 million in its first two years of operation.


Smith, sensing the need for more express services, introduced such ventures as InterNetShip, BusinessLink, and his most costly concept, ZapMail, a costly concept of a satellite-based fax and document delivery, eventually caused a loss of $300 million.
FedEx was the first to use bar code labeling in ground transportation in 1981. From there it was the inception of COSMOS, the world’s first global shipment tracking network to the PC-based automated shipping system, to the FedEx website, created in 1994. These innovations follow Smith’s philosophies. He is his famous for his statement, “Information about the package is as important as the package itself”.

In 1994 Smith decided to shorten the company’s name to FedEx. A moniker that was already a household name. In 1998 FedEx formed the FDX Company, which served as a holding company that oversaw both domestic and international operations of the organization. In 2000 the company changed names once more to the FedEx Corporation.

Although most people probably couldn’t name all the FedEx subsidiaries (there are currently 8 that operate under the FedEx Corporation) there is one purchase that definitely caught a lot of attention…Kinko’s Inc. In 2003 FedEx purchased Kinko’s, a large office and print store chain, for $2.4 billion. With the purchase of the company, all 1,200 Kinko’s locations worldwide offered FedEx shipping services and increased FedEx’s share of the express document and delivery business, helping FedEx to continue Smith and FedEx’s hold on the express delivery market. Eventually, however, FedEx decided to drop the Kinko’s name altogether and it changed to FedEx Office.

With the upcoming rise of the Internet, Smith saw the possibilities and the growing potential of e-commerce and the benefits for the shipping industry. Toward the end of the 1990s Smith leveraged the company to take advantage of e-commerce opportunities by fostering partnerships with Web based companies. Its Internet sales increased the customer base for FedEx. Today has 20 million unique visitors monthly; more than 5.5 million package tracking requests daily and 19 million packages shipped via FedEx Ship Manager monthly.

Unafraid of new technology, Smith instead saw it as a challenge to be mastered, implemented. By following this philosophy, FedEx continued to shape the very face of global communications. They have continually added to their success by making intelligent management decisions in critical times. Change will always happen, but how you manage change is a whole other matter. It will essentially determine how successful or unsuccessful your business will be.

Throughout the years, FedEx has made enormous strides to provide a more diverse workplace. At present, more than 40 percent of their U.S. workforce and 27 percent of their management team are minorities. They have also made incredible efforts to decrease turnover in their corporations by providing excellent training and benefits. More than 16% of their employees have been with the company for more than 16 years. 30% of their employees have been with them between 6 and 15 years and a whopping 83% of FedEx Express Managers have been promoted from within the company.

After all these inter-corporate changes and acquisitions, some companies may have lost their focus on their original mission statement and may have even started to drift away from their once successful management philosophies. Not so for FedEx Corporation. They have continued to honor their core values and tradition while striving to take the next innovative step towards the future.

And if you’re wondering, what happened to founder Fred Smith, at present, he is still chairman, president and chief executive officer of FedEx Corporation, which is now a $33-billion global transportation, business services and logistics company. Oh, and he is so rich he was once named one of the FOUR wealthiest people in the world.



Fedex Corporation