Why is FedEx successful

Did you know all about Fedex?

Fedex - just under 50 years old, with over $ 65 billion in revenue, 425,000 employees. Long known by its full name, Federal Express, the company is one of the largest, if not the largest, courier companies in the world.

The opponent has been UPS, the well-known courier service in brown, for many years, and Amazon also wants to get involved with its own delivery service. But there is one thing that can never be taken from Fedex - the fact that it was the world's first international courier service. That and some other incredible stories.

Today it is already part of the good reputation of an online retailer or its delivery service that customers can see where their parcel is. The fact that the current status was even accessed is largely due to Fedex. The company from Little Rock, Arkansas, applied for and received the patent for the system and method for tracking a delivery in 2016. A lawsuit soon followed in which Fedex was accused of stealing existing patents; Fedex was however right in its argument that work on the system had been going on for 30 years and never came into contact with other inventions. The original idea behind tracking for the company was not only to increase customer satisfaction, but also to measure its own efficiency.

Fedex was the first centralized air freight service in the United States. This combines what many individual companies had previously taken over - one for picking, one for sorting the goods and another for delivery. In order to become independent, Fedex soon relied on its own planes - a move that some others have since copied.

Founder Fred Smith came up with the idea that a centralized operation would be much more efficient and that the market for delivery services lacked this in a homework assignment. He was studying at Yale University at the time and was asked to come up with a new business concept. Allegedly, Smith didn't get the idea very good, but he stuck to it. Today he is still the CEO of his corporation - and one of the highest paid in the world - and has a fortune of about 5.4 billion dollars.

Until then, however, it was a difficult and unorthodox road. To turn his idea into action, Smith took $ 4 million from an inheritance and $ 80 million from bank loans and equity funds and started Fedex in 1971. After five years, there was $ 5,000 left of this seed capital.

Enough for Smith to save the dream. He made $ 27,000 out of the 5,000 at the Las Vegas blackjack table. With it he could pay the employees for another week and also attract new investments.

Employees no longer have to worry about their wages. However, Fedex is happy to emphasize that no deliveries are broken with them. So if a mishap does happen, the courier could easily lose his job. However, if you don't mess up anything, you get up to $ 100 bonus per month.

There is also a lot of caution with the special transport Panda. All pandas in the world are officially on loan from China and have to be shipped there at some point. For such maneuvers, FedEx has been used exclusively for 30 years. The division is called Panda Express and only seven of the thousands of employees are allowed to handle the delivery of bears.

Fedex certainly couldn't afford this in the past, but it's now standard for the company to have empty planes in the air at any time of the day or night. They should be ready for immediate use in the event of a transport crisis. Such approaches are of course not exactly beneficial to environmental protection, but they make the delivery network much more compact. A shipment from California can now be in Florida overnight. Most packages sent via Fedex arrive within three days.

And what is Fedex planning in the future? At the moment, the company is in the media mainly because of a bribery scandal - various truck service providers have paid the highest-ranking Fedex employee in Utah a million dollars in order to continue to receive orders; but actually the delivery service is currently concentrating more on drones.

After all, the last mile problem does not stop at the greats of transport logistics. Fedex believes drones could be part of the solution. Even if no date is to be given as to when parcels will be buzzing through the air regularly - the topic has been worked on for ten years, the first test flights have been successful and the possibilities are clear, for example Richard Smith, Vice President of Fedex.


Deliveries that only have a small window of opportunity but have difficult-to-reach destinations could be an important first area of ​​application, says Cheryl Druehl, a researcher in the field of supply chains at George Mason University.

To this end, Fedex is currently working with the drone company Wing Aviation. Testing is taking place in Christiansburg, Virginia, where the drones have to transport small packages, such as those from Walgreens. The aircraft are especially designed for five to 15 kilometer long distances in rural areas.

They reach a speed of around 110 km / h and can carry packages weighing up to one and a half kilograms. One point that Fedex particularly liked about the creation of Wing Aviation, a subsidiary of Alphabet: The drones do not have to land for delivery, but rather lower the parcel using a tether.

The tests should run until mid-2020 and then be evaluated. As far as laws and regulations are concerned, however, drone delivery is not very far advanced. And of all things, Fedex's big rival UPS is already further along here. Only recently, the delivery company received the first permission from the US government to operate an airline made of drones. The permit includes flights at night and loads over 25 kilos.

However, there are other solutions that Fedex is looking at in the context of the last mile issue - such as automated delivery robots. “Roxo”, a robot on wheels, is currently being tested in Memphis, where the company is headquartered, and a few other cities.


Roxo would not replace a drone, its field of application would be different. It is rather intended for routes up to almost five kilometers in cities. It was only this October that Roxo was also introduced for test runs in Dubai. With all these ventures one thing is certain - Fedex is far from ready to leave the field.

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