Federal Express 2001 Annual Report Download - page 5

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Feb 6
FedEx Ground extends FedEx
Home Delivery coverage to
70% of the U.S. population.
In the second half of this fiscal year, the U.S. economy fell harder
than we expected, and the domestic downturn had a ripple
effect on select international markets, particularly Asia, which
is heavily integrated into U.S. high-tech manufacturing.
It was a wild ride on the economic pendulum, swinging from the
promise of the new Digital Economy back to an Industrial Economy
in a cyclical correction. Now, we find that pendulum moving back
toward the center as excess is wrung out of the inventory buildup
of last year and as manufacturers begin to come back into balance.
The shakeout in the “dot-com” sector and the rationalization of
a number of overbuilt sectors seem largely behind us now.
When the economy picks up – hopefully sooner rather than later –
FedEx customers can take advantage of the upturn by selecting
the right mode of transportation with the right level of informa-
tion intensity. By better managing both the supply chain and the
demand cycle, we can all manage our way back to growth in a
healthy economy.
A Fiscally Responsible FedEx
How did FedEx continue to increase revenue and yields in this
difficult economy? With prudent financial management through
pricing as well as customer and product mix. In addition, we
deferred or cut capital spending and imposed very diligent inter-
nal cost controls on travel, entertainment, outside services, new
hires and other discretionary spending. Given the slowdown in
volume, we began to “right-size” our transportation networks,
making sure that we don’t carry excess capacity any more than
our customers carry obsolete inventory.
All the while, we remained focused on the five growth strategies
that we presented to employees beginning in September 2000:
• Grow our core transportation business.
• Grow internationally.
• Grow our logistics and supply chain offerings.
• Grow through e-commerce.
• Grow through new services or alliances.
It may sound incongruous to be focused on growth during an eco-
nomic decline, but our real challenge is to respond to temporary
market corrections without sacrificing long-term opportunity. One
year of soft results will not change our commitment to growth or
deter us from our goals – improving EPS by 10% to 15% per year,
increasing cash flow, improving margins and increasing our return
on capital. In this regard, we will continue to manage our revenue
based not just on volume but on yield as well.
Apr 18
FedEx Ground, American
Freightways and Viking
Freight win NASSTRAC’s
Carrier of the Year Award for
their respective markets.
2001
Jan 10
FedEx Express enters into two
landmark service agreements
with the U.S. Postal Service.
Feb 26
FedEx Express extends
shipping times for customers
in many major markets with
its FedEx Extra HoursSM service.
Jan 16
FedEx Express announces plan
to become a launch customer for
Airbus A380-800F.
Apr 2
FedEx Express initiates an
additional China frequency, for
a total of 11 weekly flights.
Mar 23
FedEx Ground awarded ISO
9002 registration, joining FedEx
Express and FedEx Services as
a bearer of the worldwide ISO
quality standard.