Federal Express 2001 Annual Report Download - page 6

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The Diversified FedEx Portfolio
Perhaps the most significant difference in our response to this
economic slowdown versus the 1990–91 recession is a simple
fact: FedEx is not the same company we were then. In 1991, we
were a $7.7 billion business focused exclusively on express trans-
portation. Our international network was incomplete. While we
had made significant investments in technology, the Internet as
we know it did not exist.
Today, FedEx has expanded and diversified its portfolio to com-
pete across a wide spectrum of the transportation market. FedEx
offers the broadest range of transportation, logistics and infor-
mation services of any company, anywhere – express, ground,
freight and even expedited delivery. And we’ve leveraged the
strength of that portfolio over the past year.
When U.S. demand for FedEx Express transportation began to
wane in the second half of last year, the FedEx Ground business
continued to grow. In February, we completed the acquisition of
American Freightways and created FedEx Freight, which over-
sees our regional less-than-truckload freight services, including
Viking Freight in the western United States. No competitor can
match the scope and breadth of our transportation services in
general and our freight offering in particular.
Our FY01 performance, even during tough economic times, con-
firms that the FedEx philosophy of operating independently and
competing collectively is working, particularly the adjustments
we made in January 2000, when we rebranded our major operat-
ing companies and reorganized to better meet customer needs.
It’s clear now that our customers are responding positively to
these strategic changes.
Strong Customer Relationships
When the Smithsonian Institution’s National Zoological Park
needed reliable delivery of two pandas from China, FedEx was the
obvious choice. When Ford Motor Company needed around-the-
clock, critical-parts support for its commercial truck customers,
FedEx won the business. Wal-Mart, Compaq, General Motors and
other valued customers have recently honored FedEx companies
as “carrier of the year.”
In January, we announced major new service agreements
between FedEx and the U.S. Postal Service. In one agreement,
FedEx Express agreed to provide air transportation for certain
Postal Service products, beginning in August 2001. The U.S. Postal
Service also agreed to the placement of FedEx Drop Boxes outside
U.S. Post Offices nationwide, beginning in March 2001.
These landmark public-private agreements create a winning busi-
ness alliance. The Postal Service wins with access to reliable,
consolidated air transportation service. FedEx was the only
transportation company with the capacity and expertise to make
that happen. FedEx wins by generating an estimated $7 billion in
revenue over the life of the seven-year contract. And the American
public wins with greater choice, flexibility and convenience for
their shipping needs.
Superior FedEx Technology
One interesting byproduct of the Postal Service business alliance
is the advanced technology that will allow FedEx to scan and
read postal bar codes. It’s in keeping with our customer-focused
technology – helping our customers link seamlessly to the FedEx
system and use information to help manage their business.
The FedEx Web site (fedex.com) is one of the most renowned and
easiest to use, and we have continued to enhance our leading-
edge, Internet technology. This year alone, we relaunched the
site to integrate express and ground functionality, introduced a
powerful suite of international shipping tools called FedEx Global
Trade ManagerSM
, opened the online market to small- and
medium-sized businesses with FedEx eCommerce Builder, and
announced the development of FedEx InSightSM to enhance ship-
ment visibility and control for select customers.
For over two decades, FedEx has been the industry leader in cus-
tomer automation, and now we’re moving from the desktop to the
wireless environment. FedEx was the first transportation com-
pany to be listed on the AT&T Digital PocketNet Service, and in
the coming months we plan to expand our wireless capabilities to
improve service and productivity.
As we’ve been saying since the late 1970s, the information about
a package is just as important as the delivery of the package
itself. That’s why FedEx is dedicated to integrated transportation
and information services – so we can deliver meaningful solu-
tions for customers in today’s complex business environment.
Unsurpassed Global Reach
FedEx entered this economic slowdown as a strong, diversified
company – and we will come out even stronger. After all, we
emerged from the 1998–99 “Asian Flu” as the leader in Hong Kong,
Japan, Taiwan and Malaysia, in addition to our long-standing
No. 1 position in China, where we currently serve 190 cities with
11 weekly flights.
Our two strongest international regions – Asia-Pacific and
Europe – continued their growth trends during FY01. In Europe,