FedEx Corporation

Type	Public
Traded as	NYSE: FDX DJTA component S&P 100 component S&P 500 component
ISIN	US31428X1063
Industry	Courier
Founded	1971; 49 years ago (1971) (as Federal Express Corporation) Little Rock, Arkansas
Founder	Frederick W. Smith
Headquarters	Memphis, Tennessee , U.S.
Area served	Worldwide
Key people	Frederick W. Smith (Chairman and CEO) Raj Subramaniam (President and COO)
Products	Post delivery, express mail, freight forwarding, third-party logistics
Revenue	US$65.450 billion (2018)[1]
Operating income	US$4.870 billion (2018)[1]
Net income	US$4.572 billion (2018)[1]
	US$52.330 billion (2018)[1]
	US$19.416 billion (2018)[1]
Number of employees	425,000 (2018)
Subsidiaries	Office, Express, Ground, Freight, Supply Chain, Custom Critical, Trade Networks, Services, FedEx Logistics
Website	www.fedex.com

FedEx Corporation is an American multinational delivery services company headquartered in Memphis, Tennessee.^[2] The name "FedEx" is a syllabic abbreviation of the name of the company's original air division, Federal Express (now FedEx Express), which was used from 1973 until 2000. The company is known for its overnight shipping service and pioneering a system that could track packages and provide real-time updates on package location, a feature that has now been implemented by most other carrier services.^[3] FedEx is also one of the top contractors of the US government.

History

Fedex's first van displayed at the FedEx World Headquarters

The company was founded in 1971 as Federal Express Corporation by Frederick W. Smith, a graduate of Yale Business School. He drew up the company's concept in a term paper at Yale, in which he called for a system specifically designed for urgent deliveries. While his professor didn't think much of the idea, Smith pressed on. He began formal operations in 1973, when he moved operations to Memphis. Besides its location near the center of the country, Memphis International Airport almost always stayed open in inclement weather.^[4]

The company grew rapidly, and by 1983 had a billion dollars in revenues, a rarity for a startup company that had never taken part in mergers or acquisitions in its first decade. It expanded to Europe and Asia in 1984. In 1988, it acquired one of its major competitors, Flying Tiger Line, creating the largest full-service cargo airline in the world. In 1994, Federal Express shortened its name to "FedEx" for marketing purposes, officially adopting a nickname that had been used for years.^[4]

On October 2, 1997, FedEx reorganized as a holding company, FDX Corporation, a Delaware corporation.^[5] The new holding company began operations in January 1998 with the acquisition of Caliber System Inc. by Federal Express. With the purchase of Caliber, FedEx started offering other services besides express shipping. Caliber subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited shipping provider; Viking Freight, a regional, less-than-truckload freight carrier serving the Western United States; Caribbean Transportation Services, a provider of airfreight forwarding between the United States and the Caribbean; and Caliber Logistics and Caliber Technology, providers of logistics and technology services. FDX Corporation was founded to oversee all of the operations of those companies and its original air division, Federal Express.^[4]

In the 1990s, FedEx Ground planned, but later abandoned, a joint service with British Airways to have BA fly a Concorde supersonic jet airliner to Shannon Airport in Ireland with FedEx packages on board, and then FedEx would have flown the packages subsonically to their delivery points in Europe. Ron Ponder, a vice president at the time, was in charge of this proposed venture.

A Federal Express McDonnell Douglas MD-11 in 1995

In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to comprise FedEx Global Logistics. A new subsidiary, called FedEx Corporate Services, was formed to centralize the sales, marketing, and customer service for all of the subsidiaries. In February 2000, FedEx acquired Tower Group International, an international logistics company. FedEx also acquired WorldTariff, a customs duty and tax information company; TowerGroup and WorldTariff were re-branded to form FedEx Trade Networks.^[6]

FedEx Corp. acquired privately held Kinko's, Inc. in February 2004 and re-branded it FedEx Kinko's. The acquisition was made to expand FedEx's retail access to the general public. After the acquisition, all FedEx Kinko's locations offered only FedEx shipping.^[6] In June 2008, FedEx announced that they would be dropping the Kinko's name from their ship centers; FedEx Kinko's would now be called FedEx Office.^[7][8] In September 2004, FedEx acquired Parcel Direct, a parcel consolidator, and re-branded it FedEx SmartPost.^[6]

In December 2007, the U.S. Internal Revenue Service "tentatively decided" the FedEx Ground Division might be facing a tax liability of $319 million for 2002, due to misclassification of its operatives as independent contractors. Reversing a 1994 decision which allowed FedEx to classify its operatives that own their own vehicles as independent contractors, the IRS audited the years 2003 to 2006, with a view to assessing whether similar misclassification of operatives had taken place. FedEx denied that any irregularities in classification had occurred, but faced legal action from operatives claiming benefits that would have accrued had they been classified as employees.^[9]

In June 2009, FedEx began a campaign against United Parcel Service (UPS) and the Teamsters union, accusing its competitor of receiving a bailout in an advertising campaign called "Brown Bailout". FedEx claimed that signing the Federal Aviation Administration re-authorization bill, which would let some of its workers unionize more easily (and, according to the Memphis-based company, "could expose [its] customers at any time to local work stoppages that interrupted the flow of their time-sensitive, high-value shipments"),^[10] was equivalent to giving UPS a "bailout". Independent observers heavily criticized FedEx's wording,^[10] claiming that it was "an abuse of the term".^[10] FedEx Express employees are regulated under the Railway Labor Act.^[11]

On January 14, 2013, FedEx named Henry Maier CEO and President of FedEx Ground, to take effect after David Rebholz retired on May 31, 2013.^[12] On July 17, 2014, FedEx was indicted for conspiracy to distribute controlled substances in cooperation with the Chhabra-Smoley Organization and Superior Drugs.^[13] According to the U.S. Department of Justice, "FedEx is alleged to have knowingly and intentionally conspired to distribute controlled substances and prescription drugs, including Phendimetrazine (Schedule III); Ambien, Phentermine, Diazepam, and Alprazolam (Schedule IV), to customers who had no legitimate medical need for them based on invalid prescriptions issued by doctors who were acting outside the usual course of professional practice."^[14] A representative for the company contested these claims, stating that it would violate personal rights of customers to deny service and that "We are a transportation company -- we are not law enforcement".^[15] On July 17, 2016 the Department of Justice U.S. Attorney's Office confirmed in a statement that it had asked U.S. District Court Judge Charles Breyer to dismiss the indictment but also did not say why.^[16][17][18]

In April 2015, FedEx acquired their rival firm TNT Express for EUR4.4 billion ($4.8 billion; £3.2 billion) as it looked to expand their operations in Europe.^[19][20]

In February 2016, FedEx announced the launch of FedEx Cares, a global giving platform, and committed to invest $200 million to strengthen more than 200 communities by 2020.^[21][22]

In March 2018, FedEx announced the acquisition of P2P Mailing Limited, a last-mile delivery service, for £92 million to expand their portfolio.^[23]

In September 2018, FedEx expanded FedEx Ground U.S. operations to six days per week due to the rise in demand for e-commerce^[24]

In January 2019, FedEx Trade Networks was re-branded to FedEx Logistics.^[25]

In May 2019, FedEx announced the expansion of FedEx Ground U.S. operations to seven days per week during the holiday peak season. The service will continue year-round beginning in January 2020 for the majority of the U.S. population.^[26]

On June 1, 2019, the authorities in China filed a case against FedEx for allegedly undermining the rights of Chinese clients.^[27] The investigation stemmed from allegations by Huawei that FedEx attempted to divert the shipping route of its packages without the company's prior authorization.^[28][29][30] which in turn have been denied by FedEx.^[28][29] It has been reported that FedEx refused to deliver a used Huawei phone into the US. Writers at PC Magazine tried to ship a Huawei P30 from a UK office to a US one to find it sent back a few days later.^[31][32]

In June 2019, FedEx announced they would not be renewing their $850 million contract with Amazon for the company's U.S. domestic express delivery business. Amazon accounted for 1.3 percent of 2018 revenues.^[33] In August 2019, FedEx announced the termination of ground deliveries for Amazon as well.^[34]

In July 2019, China accused FedEx of holding back more than 100 packages that Huawei was trying to deliver to China. The Chinese state media said that the company committed "violations" when it diverted Huawei parcels.^[35]

Finances

For the fiscal year 2018, FedEx reported earnings of US$4.572 billion, with an annual revenue of US$65.450 billion, an increase of 8.5% over the previous fiscal cycle. FedEx's shares traded at over $244 per share, and its market capitalization was valued at over US$55.5 billion in October 2018.^[36] FedEx ranked No. 50 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.^[37] In June, 2019, investor Michael Burry of Scion Asset Management (from "The Big Short") reported taking a position in the company.^[38]

Operating units and logos

The FedEx logo is a wordmark designed in 1994 by Lindon Leader of Landor Associates, of San Francisco.^[39] It consists of Fed in purple and Ex in orange. The FedEx wordmark is notable for containing a subliminal right-pointing arrow in the negative space between the "E" and the "X", which was achieved by designing a proprietary font, based on Univers and Futura, to emphasize the arrow shape.^[39] Previously, the Ex was in a different color for each division and platinum for the overall corporation use. However, in August 2016, FedEx announced that all operating units will adopt the purple and orange color logo over the next five years (the same as the original FedEx logo, and later used by FedEx Express).^[40]

FedEx Express McDonnell Douglas MD-11 landing in Hong Kong on August 11, 2010

FedEx Ground delivery van

FedEx Freight semi-trailer truck in Northbrook, Illinois

FedEx Vehicle in Tomaszów Mazowiecki, central Poland

FedEx is divided into the following operating units:

• FedEx Express (Orange "Ex"): The original overnight courier services, providing next day air service within the United States and time-definite international service. FedEx Express operates one of the largest civil aircraft fleets in the world and the largest fleet of wide bodied civil aircraft; it also carries more freight than any other airline.^[41]
  • Caribbean Transport Services: Until 2008, a part of FedEx Freight. Provides airfreight forwarding services between the US mainland, Puerto Rico, the Dominican Republic, and other Caribbean islands.
  • TNT Express: An international courier delivery services company, now a subsidiary of FedEx, with its headquarters in Hoofddorp, Netherlands. The firm has fully owned operations in 61 countries, and delivers documents, parcels and pieces of freight to over two hundred countries.
• FedEx Ground (Orange "Ex", formerly Green): Guaranteed day-definite delivery within Canada and the United States at a cost savings as compared to time-definite FedEx Express. Uses a large fleet of trucks which are owned by the independent owner/operators and drivers are independent contractors who control individual delivery routes and territories. Formerly Roadway Package System (RPS).^[42]
  • FedEx Home Delivery: Specializes in residential delivery Tuesday through Saturday and offers delivery options to provide more flexibility for residential recipients. The logo includes a drawing of a dog carrying a package . FedEx Home Delivery only operates in the United States. In the US it is not uncommon for Home Delivery packages to be delivered by standard Ground trucks. To make up the difference, FedEx Ground in Canada performs the business deliveries and residential deliveries.^[43]
  • FedEx SmartPost: Consolidates parcels from merchants such as e-commerce and catalog companies and uses the United States Postal Service for the final delivery. Formerly the independent company Parcel Direct until FedEx acquired it for $120 million in 2004.^[44]
• FedEx Freight (Orange "Ex", formerly Red): LTL and other freight services. The largest LTL carrier in the United States, with $4.5 billion in revenue for 2008.^[45] Formerly American Freightways, Viking Freight, and Watkins Motor Lines.
  • FedEx Freight Canada: Formerly Watkins Canada Express.
• FedEx Logistics (Orange "Ex", formerly Platinum): Known as FedEx Trade Networks until 2019, FedEx Logistics provides supply chain solutions, specialty transportation, cross border e-commerce technology services, customs brokerage, and trade management tools and data. Formerly Caliber Logistics and Caliber Technology.
  • FedEx Air & Ocean Cargo Networks: International air and ocean freight forwarding. Formerly C.J. Tower & Sons, TowerGroup International Inc., and FedEx Trade Networks Transport & Brokerage, Inc.
  • FedEx Cross Border: Provides cross border enablement technologies and solutions that help retailers and e-tailers reach international e-commerce consumers. Its capabilities include duty and tax calculations, export compliance management, HS classification, currency conversions, shopping cart management, and protection against credit card fraud. Formerly Bongo International.
  • FedEx Custom Critical (Orange "Ex", formerly Blue and then Red): Delivers urgent, valuable, or hazardous items using trucks and chartered aircraft. Freight not accepted for transport includes perishable food, alcohol, medication, livestock, household goods, hazardous waste, and money.^[46] Drivers are independent contractors who own their vehicles. Service in Mexico uses interline carriers. Formerly Roberts Express.
  • FedEx Customs Brokerage: Services related to customs and international trade compliance. Formerly World Tariff, Ltd., and FedEx Trade Networks Trade Services, Inc.
  • FedEx Forward Depots: Critical inventory and service parts logistics, TechConnect repair and refurbishment of business technology equipment, 3-D printing and the FedEx Packaging Lab.
  • FedEx Supply Chain: Third-party logistics including transportation management, warehousing, fulfillment, and returns. Formerly GENCO.
• FedEx Services (Orange "Ex", formerly Platinum): Provides global marketing, planning, and information technology (IT) services for the other FedEx operating companies.
  • FedEx Customer Relations: Offering a customer service toll-free telephone line for customer questions. It is operated by an automated operator then will prompt the user to a live agent for uses of tracking, claims, scheduling pick-ups (Express, Ground, Same Day, Custom Critical, Freight Express, and Freight LTL), compliments and complaints, locations (both staffed counter locations and drop-boxes), ordering supplies, setting up FedEx accounts, billing etc. Formerly FCIS or FedEx Customer Information Services.
  • FedEx Delivery Manager: Provides U.S. customers with options to schedule dates, locations, and times of delivery. Customers can also track and manage deliveries en route to or from their home, without a tracking number or FedEx account.
• FedEx Office (Orange "Ex", formerly Blue): The retail arm of the corporation, offers copying and digital printing, professional finishing, document creation, Internet access, computer rentals, signs and graphics, direct mail, Web-based printing, and FedEx shipping. Formerly an independent company, known as Kinko's until it was acquired by FedEx in 2004 and rebranded to FedEx Kinko's. In June 2008 the company was finally rebranded as FedEx Office.^[47]
  • FedEx Office Print and Ship Centers: Provides services such as copying, printing, Internet access, and shipping. They are a central location for FedEx customers to deposit their packages for shipping, offering self-service photocopy and fax machines, office products for packing and shipping, boxes, and packaging services. They also offer "Hold at Locations" for FedEx Ground & FedEx Express shipments for easy pick up. Transfer to Office/Ship centers takes 1 to 2 business days (example: calling the customer service line one day prior to pick up. This ensures package is put with proper route of courier that services that area). FedEx Office counts with its own FedEx Couriers for Center to Center and local customer deliveries. Formerly, these locations were called FedEx World Service Centers.
  • FedEx SameDay City (Orange "Ex", formerly Platinum): Offers a delivery service between select ZIP codes in as little as two hours. Services include Standard, providing pickup by noon and delivery by the end of the day, or Priority, providing delivery within two hours. FedEx SameDay City is currently expanding in all major cities across the country and is planning on becoming its own operating unit in the next five years.

SCAC codes

The Standard Carrier Alpha Code (SCAC) is a unique code used to identify transportation companies. It is typically two to four alphabetic letters long. It was developed by the National Motor Freight Traffic Association in the 1960s to help the transportation industry for computerizing data and records. FedEx's codes include:

• FXE - FedEx Express
• FXSP - FedEx SmartPost
• FXG - FedEx Ground
• FXFE - FedEx Freight
• FDCC - FedEx Custom Critical
• FXO - FedEx Office
• FSDC - FedEx Same Day City

Political donations and lobbying

According to the Center for Responsive Politics, FedEx Corp is the 79th largest campaign contributor in the United States, having donated over $29.8 million to federal candidates and committees since 1989, 37% of which went to Democrats and 63% to Republicans.^[48] Strong ties to the White House and members of Congress allow access to international trade and tax cut rebates as well as the rules of the business practices of the United States Postal Service. In 2001, FedEx sealed a $9 billion deal with the USPS to transport all of the post office's overnight and express deliveries.

In 2005, FedEx was among 53 entities that contributed the maximum of $250,000 to sponsor the second inauguration of President George W. Bush.^[49][50][51]

During the 2018 calendar year, FedEx spent nearly $10.2 million lobbying the federal government,^[52] its lowest total since 2008 but more than any other company in the air transport industry.^[53]

Tax avoidance

In December 2019, CNBC listed FedEx along with 378 additional Fortune 500 companies that "paid an effective federal tax rate of 0% or less" as a result of the Tax Cuts and Jobs Act of 2017.^[54]The New York Times reported that FedEx paid $1.5 billion in taxes after the 2017 fiscal year (effective tax rate of 34%) and then $0 after the 2018 fiscal year (effective tax rate of 0%) as a result of lobbying done by the company.^[55]

Awards and honors

The firm was named by Fortune magazine as one of the top 100 companies to work for in 2013, citing the company's choice to downsize with voluntary buyouts rather than involuntary layoffs.^[56]

Advertising

Some of FedEx's ad campaigns:^[57]

• "When it Absolutely, Positively has to be there overnight" - 1978-1983
• "It's not Just a Package, It's Your Business" - 1987-1988
• "Our Most Important Package is Yours" - 1991-1994
• "Absolutely, Positively Anytime" - 1995
• "The Way the World Works," 1996-1998
• "Be Absolutely Sure," 1998-2000
• "This is a Job for FedEx," 2001-2002
• "Don't worry, there's a FedEx for that," 2002-2003
• "Relax, it's FedEx," 2004-2008
• "The World On Time" 2001-present
• "We Understand," 2009-present
• "We Live To Deliver" 2009-present

John Moschitta ad

FedExForum in Memphis, Tennessee

In 1981, their advertising firm Ally & Gargano hired performer John Moschitta, Jr., known for his fast speech delivery, to do an ad for Federal Express titled "Fast Paced World". This single commercial would be cited years later by New York as one of the most memorable ads ever.^[58]

Motorsports

The FedEx-sponsored No. 11 car at the 2012 Kobalt Tools 400, driven by Denny Hamlin

• From 1997 to 2002, FedEx was the title sponsor of Champ Car World Series when it was known as CART. The series was known as the "CART FedEx Championship Series", which led to the official "Champ Car" designation in reference to the fact they were the FedEx Championship.
• FedEx is the sponsor of the No. 11 NASCAR Sprint Cup Toyota, owned by Joe Gibbs Racing since 2005. The car has been driven by Denny Hamlin since 2006.
• FedEx previously sponsored the Formula One teams Benetton (1996-1999), Ferrari (1999-2001), Williams F1 (2002-2006), and McLaren (2007-2008).

Football

• From 1989 to 2010, FedEx was the title sponsor of the Orange Bowl, played in Miami, Florida.^[59]
• FedEx Field, home of the National Football League's Washington Redskins in Landover, Maryland^[60]

Other sports

• FedEx sponsors FedExForum, home of the NBA's Memphis Grizzlies and the University of Memphis men's basketball team.^[61]
• FedEx sponsors the Heineken Cup in Rugby.^[62]
• Beginning in 2007, FedEx became the title sponsor of the FedEx Cup, a championship trophy for the PGA Tour.^[63]
• The St. Jude Classic, a PGA Tour golf tournament held in Memphis, has been sponsored by FedEx from 1986 to 2006, in 2009, and currently since 2011.
• FedEx is the Main Sponsor of the UEFA Europa League since 2015.

See also

• Cast Away
• Federal Express Flight 705 (attempted hijacking)
• Federal Express Flight 14 and Federal Express Flight 80
• Freight company
• Package delivery
• Top 100 US Federal Contractors

References

External links

• FedEx - Index of national homepages
• Business data for FedEx:
  • Google Finance
  • Yahoo! Finance
  • SEC filings