FedEx - Current Market Trends and Conditions

During the 1980s, the air express industry was a medium to attractive industry to already be a major player in, but not a very attractive industry to try and break into. The industry can be characterized by high rivalry from competitors who compete on the same services with very little differentiation, medium power from suppliers who supply the resources necessary to run the business, high buyer power because customers can basically find an equal service from any firm in the industry, low substitution threat from other means of shipping transportation, and low threat of new entrants due to the high initial capital outlay and need of management

Yes, FedEx has a right to impose a reasonable grooming policy based on customer reactions to personnel appearance, but they must take into consideration Title VII of the Civil Rights Act of 1964, which explains what an ethical dress policy is for employers with up to 15 employees. Although FedEx has the right to impose a grooming policy, they must remember not to cross the line when it comes to religious beliefs as stated in Title VII of the Civil Rights Act.

The government affects FedEx’s operations by providing security regulations. A regulation that affects them is increased security regulations that were just recently enforced by the federal government. These regulations protect FedEx from any external threats that can be within the goods they deliver. This protection can also negatively affect FedEx’s operation by adding additional time to the delivery

In this report we focus on the two main competitors in the package delivery industry: Federal Express Corporation (FedEx) and United Parcel Service of America, Inc.

Federal Express main products are delivering packages to widespread locations within a short time. In this case study, we would focus our discussion on its most profitable services, i.e. Priority One, Standard Air Service, and Courier Pak (Table 1).

Furthermore, FedEx flights were not even loaded to maximum capacity. Using just 85 percent of capacity, FedEx delivered a combined 20,726 packages and reaped about 376,000 in revenue. Of this amount, Courier Pak deliveries accounted for just 6 percent of daily flight volume, and 4 percent of daily revenue. Ideally, FedEx should focus on maximizing this unused capacity with increased Courier Pak deliveries, which would result from a direct marketing campaign.

The US express mail industry is highly consolidated. 85% of the market is served by 3 service providers. There are six second tier players who serve the remaining 15%. FedEx and UPS lead the industry in services and innovation. The following trends have been observed in this Industry.

The functionality of FedEx is based on a model that encourages a high level of interconnectedness. The company routes shipments from all over the world through regional hubs. There are only a handful of such hubs around the world. Around five cities in the US form hubs the main hub in Memphis, the west coast hub in Oakland, customs clearance in Anchorage, east coast hub in Newark and Latin America hub in Miami. The use of so many hubs indicates that North America remains a key market, which also accounts for some of the

FedEx’s new product Courier Pak makes sense because of its’ high profit margin and potential to generate new volume. Out of the 3 services that Fed Ex provides, CP yields the highest profit margin at 66% while Priority-One is at 55% and SAS is only at 27%. In addition to this, the company believes that it will be able to boost up sale of CP from 1300 to 6000 packages per day. This shows that CP is the most profitable and huge potential for growth.

A FedEx employee picks up the customer’s box and scans it so FedEx recognizes it. Now the product is registered and traceable. The product is then taken to a sorting center where it is classified according to its destination. The package is put on a belt where it is measured and a price tag is determined. In the next step, the packages are put into containers. These containers are loaded in aircrafts directed by a control

FedEx was first established in 1973 as a logistic company with the name Federal Express that be created by founder and first CEO Frederick W Smith. The Headquarters is in Memphis, Tennessee in the US. The company became well known for its fast and reliable delivery service around the world. On its first night of operation FedEx delivered 186 bundles to 25 urban locations in the US with only 389 employees and a 15 Dassault Falcon aircraft. In 1980 FedEx purchased a system for live updates on the packages. In this system, FedEx drivers share the current locations from the trucks to provide updates of the packages to the customers. This information was sent to a central computer of FedEx then the company improved the update system by introducing FedEx.com webpage. This webpage allowed the tracking data to be easily accessible. However, recently, FedEx uses Savvy bundle for packing and tracking the products across couriers. (Baldwin, 2016)

The parcel service industry is made up of four main competitors. These competitors are UPS, FedEx, Airborne Express, and the U.S. Postal Service. Since 2000, American consumers have spent more than $50 billion to ship parcels, packages, and overnight letters. New parcel distribution patterns developed due to the way U.S. manufacturing companies are operating. The Internet has expanded the reach of direct marketing, particularly with retail transactions requiring home delivery. Globalization has also created the need for parcel carriers to expand worldwide.

These are their daily volumes for those services. FedEx has many service areas. They service over 220 countries, territories and every single address in the U.S. FedEx tends to make more than 6 million package tracking requests daily. This is an outstanding number for a company dealing with packaging and locator with tracking numbers. Their express facility has 1,057 stations, and 10 air hubs. While their ground services has 32 hubs and over 500 pickup/delivery terminals. Freight has approximately 355 service centers and nearly 2,000 office locations. Despite all their services FedEx has a mission. Their mission is to produce outstanding financial returns for their shareowners. However, all customer requirements will be met while providing high value logistics, transportation and related business through operating companies. According to FedEx website, “FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers” (About FedEx). Safety is their number one concerns and first considerations in all operations. However, all their corporate activities will be conducted according to the highest ethical and professional standards. FedEx values their people, service, innovation, integrity, responsibility, and most of all loyalty. This company strategy consists of three levels; compete collectively, operate independently, and manage collectively. These strategies will help the company accomplish their goals. Standing, as

When it comes to strategy, FedEx has done a great job of staying on top in the market place after all these years. FedEx has built a very powerful empire over the last decade, insuring customers with different global delivery services. Different companies have different strategies that work with their company to reach a specific goal, at FedEx the main strategy for success would be customer service. Customer service would have to be the number one strategy FedEx is mostly concerned with and constantly researching new ways to make it easier and more convenient for customers to deliver packages across the world. To help accommodate customers, FedEx has established online databases to ensure customers of package delivery; customers are able to track packages from the convenience of their homes or offices. Something else that FedEx has established are flights, and freights for those international customers, they have also improved services to and from all over Europe as well as Asia, in

FedEx Corporation, situated in US, is one of the leading supply chain management solution providers in the world. With annual revenues as high as USD33 billion, the company offers incorporated business