From the President OCTOBER 2018

Transcription

1 Opco Perspectives David Bronczek, President and COO, FedEx Corporation The Chairman and I have spent a lot of time thus far in FY19 talking about how we all need to focus on working together to reach the same goal growth. With the full force of each business within FedEx driving toward the same goal, I am confident we will leave our competitors with no place to hide. What do I mean by that? In many cases across our business, we are eradicating the safe havens traditionally enjoyed by our competition by implementing new solutions, opening new geographic markets, and getting ahead of where our new customer segments will be in the future. In other cases, we re enhancing our offerings so exponentially that the competition simply has no answer. In this issue, we ve asked each operating company to highlight how it s helping to make it hard for the competition to hide, and I think you ll be energized by the work going on in all pockets of our business. I also think these examples will make you feel proud and grateful to be on the FedEx side of the future. Each of you plays a vital role in our efforts to grow, please our customers, and, ultimately, multiply the possibilities we can deliver for people around the globe. Thank you for all that you do, and let s keep up the great work! 1

2 TNT integration broadens international solutions for FedEx Express David L. Cunningham, President and CEO, FedEx Express For many years, the road network in Europe represented the most significant growth opportunity in the otherwise powerful global FedEx network. FedEx Express was the No. 4 competitor behind DHL, UPS, and TNT. The impressive profits generated by DHL and UPS in Europe allowed them to invest in competitive attacks on FedEx around the world. Our 2016 acquisition of TNT was the perfect competitive response. Two years into the integration, the strategic fit of the two companies is more apparent than ever. The TNT integration will give us the densest road network in Europe, connecting more than 40 countries through 19 road transit hubs and more than 540 depots. Now our combined air and expanded ground networks position us to have the most competitive transportation services in the region. Thanks to TNT s excellent intra- Europe road network, we can offer better ground service solutions for deferred products. The ongoing integration will also help us to grow parcel volume throughout our global network. We re now introducing FedEx Express Economy shipments into the TNT European road network. We have also implemented a new shipping label that allows TNT shipments to North America to flow through the FedEx Express network. With a combined sales force focused on selling our portfolio of solutions, we now have one face to the customer. Through this connectivity, we are taking business from the competition in multiple regions. In many APAC markets, for example, TNT customers enjoy improved transit times to trans-pacific destinations. Great progress is also being made with one-courier, one-route integration in several APAC markets, which also benefits customers. Meanwhile, in underpenetrated European markets, we ve launched pricing flexibility programs to grow new business. The thousands of FedEx Express and TNT team members have been instrumental in our TNT integration successes and achievements. Because of their outstanding work, FedEx Express is on target to achieve our global IGNITE strategy, which is $1.2B to $1.5B of operating income improvement by FY20. 2

3 FedEx Ground: Investing in automation, innovation, and our future Henry Maier, President and CEO, FedEx Ground At FedEx Ground, we ve been investing billions of dollars in automated facilities and network expansion for the better part of 15 years. It was a strategic move to more effectively use our resources during a time of tremendous growth and create a competitive advantage. The plan is working. Today, FedEx Ground runs one of the most automated sortation networks in the industry, with fully automated facilities throughout the U.S. and Canada. Inside those buildings, you ll find technology that sorts millions of packages every day and gives us the flexibility to meet our customers needs when volumes surge during Peak. This technology has clearly put us ahead of our primary competitor, who is only now promoting their automation investments. In the meantime, we re making better use of our existing resources while spending less in capital. Take a look at the infographic to see how we have invested in automation and innovation at FedEx 3

4 FedEx Freight delivers service, value, and network solutions John Smith, President and CEO, FedEx Freight At FedEx Freight, we are dedicated to operational improvements, customer solutions, and network upgrades that eliminate safe harbors long held by our competitors. This is a time of transformation at FedEx Freight, and we re excited to introduce our new FedEx Freight Direct service, LTL Select program, and Kansas City, Missouri, service center. Our FedEx Freight Direct pilot began to test in August. It serves the booming $10 billion e-commerce sector of heavy, hard-to-handle goods such as furniture and large appliances. We re committed to providing the best service in the industry while ensuring our entry into this critical market is profitable for the company and safe for our team members. Another new offering, LTL Select, is a cloud-based, multicarrier, less-than-truckload (LTL) freight shipping platform. This application was developed to foster a more direct relationship with small and medium customers. It offers an easy-to-use interface that allows customers to create and store contacts, get rates from multiple carriers, ship with multiple carriers, and track all their shipments. We re also expanding our physical footprint. Our new Kansas City service center, with 336 doors, will be the largest in the FedEx Freight network when it opens in January In the next four months, nine new or expanded service centers will open, allowing us to better serve customers and meet rising volume demand. We re 100 percent committed to making these initiatives a success. Through hard work, cohesive teamwork, and a commitment to safety, FedEx Freight will continue to eradicate the competition s strongholds. 4

5 FedEx Services: Disrupting competitive safe havens around the globe Rob Carter, Don Colleran and Raj Subramaniam, FedEx Corporation We live in an increasingly connected and evolving world and FedEx is adapting along with it. Collaborating as a larger, global team is the new normal. When we embrace this mindset and work together, we can disrupt the competition and its safe havens everywhere. FedEx Services is at the center of this, supporting our regional and operational business partners through strategic collaboration. Sales showed us exactly how to disrupt the competition with Global Gold Rush, an aggressive pricing program to win international shipping business. To date, the program is nearly halfway to its goals across several segments. To build on that momentum, Sales is focusing on an International Retail Freight Strategy to drive market share gain in this $65 billion space. Global Marketing is also closing the gap in key areas, touting our scale, unique capabilities, and robust solutions. Along with the realignment of FedEx Trade Networks, this strategy evolves FedEx from pickup and delivery to serving all facets of the online order lifecycle. E-commerce growth is one piece of the puzzle; our teams are executing against several competitive strategies. The partnership between IT and the business also offers competitive advantages, allowing us to differentiate ourselves digitally and innovate to win. With a more intuitive, redesigned fedex.com and a mobile app delivering new capabilities every 4 6 weeks, we are a digital leader. Besides reimagining our systems, a Renewal mindset inspires us to transform the customer experience now and into the future. We thank our team members for embracing the new normal and executing against competitive strategies in full force. As we continue to unleash the power of FedEx global collaboration, the competition and their safe havens are no match for us. 5

6 FedEx Office provides print possibilities Brian Philips, President and CEO, FedEx Office FedEx Office print solutions are more than paper and ink. We use state-of-the-art technology across our one-of-a-kind digital, retail, print, and distribution networks to deliver more possibilities to customers that our competitors can t match. FedEx Office Distributed Print enables customers to get their messages to market faster. We use intelligent routing to digitally distribute print files so materials can be produced closer to where the customer needs them often shaving days off shipping times. Retailers, in particular, rely on our capabilities to be first to market, which helps drive their bottom line. Just like retail, healthcare must be nimble. In fact, one of our customers offers preventive care to 5,000 schools in 30 states, and flu vaccine clinics are a top initiative. The challenge of coordinating parental consent forms, producing educational guides and signs, and shipping those materials to parents and schools was becoming impossible. Now, FedEx Office has made the impossible possible by printing the customer s materials across our network and partnering with the FedEx transportation system to take care of the deliveries. Parents can also bring their completed consent forms to any of our stores for return shipment. This is just one of many examples of what s possible when you combine the largest print network in the world with the largest distribution network in the world it s a winning combination our competition simply can t touch. 6

7 FedEx Trade Networks: Force multiplier Richard Smith, President and CEO, FedEx Trade Networks The realigned FedEx Trade Networks has begun eliminating a number of traditional safe havens for competitors around the world. FedEx has always been known for our world-class transportation capabilities, and now the deeply customizable global logistics solutions FedEx Trade Networks brings to the table help meet even more customer needs. FedEx Trade Networks acts as a force multiplier for FedEx, creating value both within the enterprise and around the world. We remain the largest customs entry filer in the U.S., driving substantial revenue for our colleagues at FedEx Express, FedEx Ground, and FedEx Freight while virtually eliminating the need for the external customs and brokerage providers many competitors require. We are generating new revenue, expanding existing businesses in new markets and industries, and anticipating shifting markets and customer needs effectively rounding out the FedEx portfolio of customer solutions with the full breadth of our specialized capabilities. This enables FedEx Trade Networks to find innovative ways to say Yes to more enterprise FedEx customers. We think the competition will have a tough time matching that. And customers are noticing. They ve said that we re combining these dynamic capabilities in ways that others in the industry are not. FedEx Trade Networks is the flexible edge nimble, customer-centric solutions tailored to fit any logistics need wrapped around the solid FedEx core: our peerless global transportation networks. With our capabilities growing globally by the day at FedEx Trade Networks, FedEx is eliminating our rivals safe havens one by one, leaving them absolutely nowhere to hide. 7