GUD MOR ...friends TODAY KNOW ABOUT FEDEX Frederick W . Smith founded the Federal Express Corporation in 1971 with part of an $ 8 million inheritance . At the time , the U . S . Postal Service and United Parcel Service ( UPS ) provided the only means of delivering letters and packages , and they often took several days or more to get packages to their destinations . While a student at Yale in 1965 , Smith wrote a term paper proposing an independent , overnight delivery service. His arguments were based on the inadequate routes used by most airfreight companies at the time and stressed the need for a system that would support time -sensitive shipments such as medicines , computer parts , and electronics. Although Smith received a C on the paper , his vision and belief that businesses would pay more to get letters, documents , and packages delivered overnight was right on the mark . The specific idea for Federal Express came to Smith after he purchased controlling interest in Arkansas Aviation Sales, located in Little Rock . Smith designed a highly efficient distribution system to overcome the inherent difficulties in moving packages and airfreight to their destinations within one or two days . Being ex - military, the choice of ‘‘ Federal ’’ for the company’ s name was a natural for Smith . He felt that the patriotic meaning associated with the word , in combination with ‘‘ Express , ’’ would attract attention and promote strong name recognition. The fledgling Federal Express began operations on April 17 , 1973 , when it shipped 186 packages to 25 U . S . cities using 14 small aircraft flown out of Memphis International Airport . Today , FedEx Corporation, as the company is now called , employs more than 275, 000 people and handles over 7. 5 million shipments per day around the world. Though most people are familiar with FedEx ’ s overnight delivery services, the company is actually divided into four segments and 11 operating com panies , as shown in Case Exhibit 13.1 . The FedEx Express and FedEx Ground segments account for the bulk of the company ’ s business , offering valuable services to anyone who needs to deliver letters, documents , and packages . FedEx is the clear leader in express shipping, controlling more than 49 percent of the market in the United States. In the ground delivery market, FedEx runs second place to UPS and its sector -leading 54 percent of the market . In 2009 , FedEx registered over $747 million in operating income and an astounding $ 35. 5 billion in total revenue ( see Case Exhibit 13. 2) . However , operating revenue was down significantly from 2008. According to the company , FedEx is not in the package and document transport business; rather , it delivers ‘‘ certainty ’’ by connecting the global economy with a wide range of transportation , information, and supply chain services. Whether dropped off at one of over 44, 000 drop boxes ( roughly 5, 000 of which can be found at U . S . Postal Service locations ) , over 700 world service centers , over 1, 800 FedEx Office locations , over 6, 500 FedEx Authorized ShipCenters, or picked up by FedEx courier , packages are taken to a local FedEx office where they are trucked to the nearest airport. The package is flown to one of the company ’ s distribution hubs for sorting and then flown to the airport nearest its destination. The package is then trucked to another FedEx office where a courier picks it up and hand delivers it to the correct recipient. Much of this takes place overnight, with many packages being delivered before 8: 00 AM the next day. FedEx confirms that roughly 99 percent of its deliveries are made on time .
Posted on: Sun, 13 Jul 2014 05:23:08 +0000
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