FedEx Organization

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Abstract: FedEx is a corporation that provides the delivery services worldwide

mainly in North America. The logistic function of FedEx is the most advanced among

the competitors having the best supply chain management structure. The competitive

advantage to FedEx is that it delivers over seas within overnight. It provides services

through its operating fragments including FedEx Express, Ground, Freight and

Services. Also allowing customers to track their orders and can also edit their

addresses on the websites.

Key words: FedEx logistics, FedEx Ground, FedEx Express, FedEx Freight, FedEx

Services, supply chain logistics.

1. Introduction

This essay aims at reflecting the information about the FedEx company which now

becomes FDX corporation. It also elaborates the logistics management functions of

the FedEx, how they are structured and how they are ensuring their supply chain

management. These logistics functions are described on the basis of their daily basis

work schedule. As it is providing supply of products, thus also keeping balance with

their customer satisfaction and delivery method. Different logistics models and the

factors affecting their revenues are important to regulate their services. Logistics

services provided by FedEx are also well-explained. Critical understanding of

logistics management functions are also explained on the basis of positive, negative

and personal opinion about FedEx. This will allow a reader to gain effective idea

about the FedEx and their logistic functions.

2. Company’s Overview:

FedEx is basically a Federal Express Corporation built on a portfolio of

transportation, e-commerce, and business services propagate throughout the world. It

is founded by Frederick W. Smith about 50 years ago on May 5, 1971. It’s

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headquarters are in Memphis, Tennessee and United States. It is a public sector global

industry. They provide Express Delivery, Logistics Services, Business Services and

Freight Services. They are providing employment to more than 650,000 people

according to 2020. They have about 684 total number of aircrafts. They have total

87.3 thousand number of fleets. FedEx provides transport of postal services in

United States through FedEx Smart Post and also assist US government as a

contractor. This company also provides data to SCM. It is now known a s FDX

Corporation.

3. Logistic Functions of FedEx

The leading logistic company FedEx is well-rewarded because of his supply chain

industry. In order to provide reliable and flexible transportation they use international

ocean and air freight forwarding solutions. FedEx uses International Direct Economy

Ocean, International Direct Priority Ocean and International Direct Distribution

Ocean Solutions. FedEx permits cargo services to connect middle East, North

America, Latin America, Asia-Pacific and Europe together. It also provides a through

information about shipment transportation and clearance. In addition to above

mentioned functions, it also includes global order logistics providing business to meet

their objectives and reduction in the cost by better service levels.This is how they

ensure having a clear logistics management function.

4. Logistic Management Function

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Logistic Operation flow is given below:

4.1 Order Management at FedEx

The customers placed the order either on internet or by calls and is processed by the

Order Management system. This management system transport the information to the

concerned distributor channel. If the customer wants to return the parcel than reverse

logistics apply and is given to the concerned distributor centre.

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4.2 Inventory Management system of FedEx

The important task of logistics is inventory management as inventory consist of the

pilled stocks that are waiting to be converted into products or to be delivered. They

maintain the supply chain by combining locations, services and technology. It covers

all the process from order placement to the delivery.

4.3 Optimize Critical Inventory Management Model of FedEx

This includes the whole order processing, optimize sourcing location and

transportation, the whole dispatch operations, booking of shipments, taking to local

couriers, monitoring of parcel delivery and the returns on it with escalation

management.

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4.4 Warehousing Strategy of FedEx

The regional distribution channels are present in USA, Asia-Pacific and Middle East.

There are people to manage the warehouse and their management. Company has

developed a wide range of distribution channel specialized in operations.

4.5 Transport Planning and Management at FedEx

FedEx manages the both inbound and outbound transportation systems of the

businesses.This system ask FedEx to ease their customers. They do work with

customers to provide best shipping.

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4.6 Reports and Business Intelligence At FedEx

These business intelligence manages the software and services to transform it into

insights that display an organization business decisions. They also have developed

reporting to turn data into insights to control.

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4.7 Return Management System

This process deals with the management of returning of dispatched orders of

customers back to the distribution channel. We do reverse logistic to recycle and

disposal.

These are the management functions of logistics of FedEx.

5. Models of logistics Management

We all know the market of e-commerce is expanding on daily basis and the

competition is rising between the parties. So, a need of logistics management arose to

survive in market. These models are given below

FedEx Operating Segment Model

FedEx Revenue Insights Model

5.1 FedEx Operating Segment Model

The FedEx operating segment model is given below:

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5.1.1 FedEx Express

This is the fastest air-grounded express that is very reliable and affordable. It also

gives the opportunity of returning money if not delivered on time. Thus we can

simply rely on express because of its flexibility. These are ordered to deliver at certain

time.

5.1.2 FedEx Ground

This FedEx service is basically for North America. Though their customers are

worldwide but they have some limitations as well. These are ordered to deliver at

certain day. Mostly containing 1-5 working days. These only do home deliveries.

5.1.2 FedEx Freight

FedEx freight uses less than truckload to meet the requirements of their customers.

Providing their best services to the customers. Through FedEx Freight customers can

also locate their parcels by using tracking code.

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5.1.3 FedEx Services

These FedEx services uses the technology to meet the needs of their customers.

Mainly uses supply chain techniques to deliver the product to the customers. It also

uses print services as well as technical support. FedEx services further contains FedEx

Office and FedEx logistics.

5.2 FedEx Revenue Insights Model

FedEx serves more than 220 countries worldwide hence contributing in growth. In

addition to the above mention operating segments FedEx logistics and FedEx office

also pay their role in the revenue. In future as e-commerce is raising the growth will

also rise accordingly.

This chart shows the revenue of FedEx Ground, FedEx Express, FedEx Freight and

other elements in percentages for the fiscal year 21. The total revenue for this year

was $84.0B. This total revenue comes from the FedEx Express contributing 50% of

the total that was they earned $42.1B, FedEx Ground contributing 37% of the total

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that was $30.5B, FedEx Freight contributing 9% of the total that was $7.8B and other

eliminations contributing 4% of the total that was $3.5B.

6. Factors affecting the Business and Revenue Models

1. FedEx business mainly depends upon the customer demands and what they are

doing in accordance to earn maximum revenue from the services.

2. This also depends upon the bulk quantity of services they are transferring on daily

basis during one shipment.

3. Depending further on whether the net income measures according to per package

or weight.

4. Cost per package also varies with weight of parcel.

7. Logistics Services of FedEx

Following logistics services are provided by FedEx:

Air and Ocean Cargo Networks

Customs Brokerage and Trade Solutions

Supply Chain Services

Package and Freight Tracking

7.1 Air and Ocean Cargo Networks

FedEx uses planes as well as ships and trucks for the shipment of their orders. As they

are offering overnight deliveries of medical products connecting the world together

by inbound, outbound, intercontinental and inter-regional locations. The coverage is

around the Middle East, North America, the Asia Pacific region, Europe and Latin

America. We can choose the cargo network either by air or by ocean by providing the

cost according to the speed. These cargo products also depends upon their sizes and

weight. Such as for FedEx Freight you can only cargo parcels up to 150lbs;up to 108”

in length and so on for others.

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7.2 Customs Brokerage and Trade Solutions

FedEx also have customs brokers that pay heed to the custom charges such as:

calculation of fees, taxes, duty and many more of these. These brokers also provide

free trade certificate for your business and also custom bonds. The other reason of

custom brokers is to increase the speed of shipment while keeping it at minimum cost.

They also provide trade solutions by providing proper customize training to minimize

any difficulty of exporting and importing. They have quick access to North America

trading documents as they mainly trade in there.

7.3 Supply Chain Services

Supply chain services are managed by the leader in the third party industry being an

expertise of technology, e-commerce, retail, healthcare,etc. They manage their critical

inventory by end-to-end optimization.These services includes maintaining wear-

house, inventory, transportation optimization,fulfillment of orders their shipments and

monitoring their orders. After this they deliver the product to the customer and than

the reverse logistics starts.

7.4 Package and Freight Tracking

FedEx makes it easy to track your packages and freight during busy seasons whether

these are for personal or business. By using the tracking tools u can simply edit the

address, report the missing one and many more. Theses tracking services are applied

even for overseas by easily placing your parcel’s number in the marked field. Hence

in this way parcels are easily located. They have certain soft-wares to ensure the

location of their freight workers.

8. Organizational Success

Company needs a best Human Resources Management to be successful in market. In

short there must be a way of employee satisfaction by dealing with them in an healthy

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way. As we know behaviors are main factor behind organization’s success, we must

keep it on our priority list.

9. Merits of logistics management functions of FedEx

The main reason behind FedEx’s success is that it provides satisfaction level to both

of it’s customers and employees. When a customer choose FedEx he already knows

that there will be a overnight delivery of product. As FedEx provides a professional

environment and hence they are loyal and dedicated towards the company’s mission.

They are also considering what their customers are getting from their services as they

are more dedicated towards the quality. The reasons behind the success pattern of

FedEx are as follow:

9.1 Job Satisfaction

As we already knew that an employee having satisfaction regarding job gives positive

vibes regarding the organization. The organizations also provides employees with

things so that they can do best performance. FedEx have such employees that are

warm-welcoming to ensure their customers loyalty only by greeting well. When

employees have job satisfaction they do their best to satisfy their customer’s need,

leaving a remarkable impact about company.

9.2 Focus on their customers

FedEx focus mainly on their customers by offering incentives to ask their customers

where they are lacking. They are also providing deliveries overnight having the

competitive advantage over other service companies. They never compromise over

the quality of service provided by them. They are now also giving package tracking

facilities to customers to locate the passage of their product. They can easily change

the address on the website and can report the missing parcel. In these ways they are

providing best services to their customers.

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9.3 Know how to deliver

The most reliable competitive advantage to FedEx is that they have great vision in

transportation business. FedEx introduced their management system by introducing

computers to the shipping industry.

10. Demerits of Logistics management functions of FedEx

Though they have competitive advantage over other service centers, still they are

lacking behind in some perspectives as follow:

10.1 Limited to its International market

limitation to its main market that is US. While other marketers such as UPS ensuring

their services beyond the US. Hence FedEx should penetrate in Asian countries those

are struggling for economy betterment. Hence will increase its market volume.

10.2 Increasing Operating Cost

The operating cost of FedEx has been increasing from the past years such as it was

$55.3B in 2017 and it rises to $60.6B in 2018. As increase in operating cost shows

that there is decline in the profitable income which can further be use in other

projects.

11. Opinion

According to my opinion FedEx should consider following points:

11.1 Strike Partnerships

FedEx should strike low level companies to make partners, in order to increase their

efficiency. The name of FedEx is already popular among marketers and they will

willingly do this partnership. Hence this will help to increase their market potential.

11.2 Use of Al and Digital Technology

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FedEx should use Al and digital technology to increase the efficiency of their

business and to attract more customers for better experience

11.3 Operational Efficiency

FedEx should work on increasing their operational efficiency by decreasing their

operational expenses and increases their revenue. They should also take into accounts

that how should they use their assets in an effective way.

12. Logistic Capability of FedEx

FedEx is considered one of the largest and well-defined logistic company. It operates

on the portfolio of FedEx Express, Ground, Services and Freight. It uses over seas as

well as airplane cargo services worldwide mainly in North America. They consider

their customers opinion over anything by providing best services and packaging.

FedEx have competitive advantage over others by providing overnight deliveries. As

logistics helps in the efficiency and reduction in the cost. Logistics software reduces

the manual labor and hence reduces the operating cost.

13. Core Concept of Last mile logistics

Last mile logistics of FedEx is basically the very last step in the supply chain

management in which the distribution centre helps in sustaining and safe delivery to

the end user. FedEx uses the same distributor in the same residential area and hence

increasing their functionality.

14.Conclusion

Keeping the above mentioned points in mind FedEx must eradicate its limitation of

services to gain more net income. As they take feedback from their customers, it will

also end some queries regarding the customers. Supply chain helps us to understand

the overview of company’s logistics function. This simply says that organization’s

success depends upon the job satisfaction of employees and customer satisfaction.

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Explaining how they delivers over-seas and by planes removing all the queries. Also

explains the customer tracking procedure to provide reader with knowledge. Different

kinds of logistics models are available; FedEx Business model explaining the delivery

services and their revenue insights to attain the maximum revenue. This topic helps

the learner in understanding the logistic supply chain function of FedEx in detail that

would be beneficial in the assessment.

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