FedEx Corp. Overview

FedEx Corp.

FedEx Corporation, formerly Federal Express Corporation and later FDX Corporation, is a Memphis, Tennessee-based American multinational conglomerate holding company that furnishes clients and organizations overall with a wide arrangement of transportation, online business and business administrations. FedEx is best known for FedEx Express, its air delivery service. FedEx Express was one of the first major shipping companies to offer overnight delivery as a main service. Since then, it has established FedEx Ground, FedEx Office, FedEx Supply Chain, FedEx Freight, and a variety of other services through a number of subsidiaries, frequently in response to UPS, its primary rival.

Through the operation of companies competing together, working together, and innovating digitally under the reputable FedEx brand, the company provides integrated business solutions. Through their Air Cargo Network contract, FedEx is also one of the top US government contractors and helps transport some packages for the United States Postal Services).

FedEx Corp. History

Frederick W. Smith, a Yale University alumnus, established the company in 1971 as Federal Express Corporation in Little Rock, Arkansas. In a Yale term paper, he proposed the company’s concept, calling for a system designed specifically for urgent deliveries. Smith continued despite his professor’s reservations about the idea. When he moved his operations to Memphis in 1973, he officially began operating. Smith cited Memphis International Airport’s proximity to the nation’s average population center and its lack of frequent inclement weather as reasons for choosing it. The company grew rapidly, and by 1983 had a billion dollars in revenues, a rarity for a startup company that had never taken part in mergers or acquisitions in its first decade. It expanded to Europe and Asia in 1984. In 1988, it acquired one of its major competitors, Flying Tiger Line, creating the largest full-service cargo airline in the world. In 1994, Federal Express shortened its name to “FedEx” for marketing purposes, officially adopting a nickname that had been used for years.

FedEx reorganized as FDX Corporation, a Delaware corporation, on October 2, 1997. After Federal Express purchased Caliber System Inc. in January 1998, the new holding company began operations. After purchasing Caliber, FedEx began providing additional services in addition to express shipping. FDX Corporation was established to oversee all of those businesses’ operations, including Federal Express, the company’s original air division. FedEx Corporation took over FDX Corporation in January 2000 and rebranded all of its subsidiaries. Roberts Express became FedEx Custom Critical, Roberts Express became FedEx Express, Caliber Technology became FedEx Global Logistics, and Federal Express became FedEx Express. In order to consolidate all of the subsidiaries’ sales, marketing, and customer service, a brand-new subsidiary known as FedEx Corporate Services was established. FedEx bought the international logistics company Tower Group International in February 2000. Additionally, FedEx acquired the customs duty and tax information company WorldTariff; FedEx Trade Networks was formed by rebranding WorldTariff and TowerGroup.

FedEx bought TNT Express, their rival, in April 2015 as it sought to expand its European operations. P2P Mailing Limited, a last-mile delivery service, was purchased by FedEx in March 2018 to expand their portfolio. FedEx will acquire ShopRunner, an e-commerce platform, in December 2020. Frederick W. Smith, the company’s founder, announced on March 29, 2022, that he would step down as CEO and take over as executive chairman on June 1, 2022. Raj Subramaniam, FedEx’s current president and COO, was chosen by the company to succeed Smith.

FedEx Corp. Segments and Services

FedEx Express

FedEx Express was the first company to create express transportation and is still the market leader worldwide. It connects markets that account for more than 99 percent of the world’s gross domestic product by providing timely, dependable delivery to more than 220 countries and territories. FedEx Express is the largest express transportation company in the world thanks to cutting-edge information technologies, unparalleled air route authorities, and transportation infrastructure.

FedEx Ground

Through its FedEx Home Delivery Service, FedEx Ground delivers to all residential addresses in the United States and Canada at a low cost and on a specific day. FedEx Ground Economy, a FedEx Ground service, focuses on consolidating and delivering large quantities of light-weight, less-demanding business-to-consumer packages in a timely manner.

FedEx Freight

FedEx Freight is a leading provider of less than truckload freight services to businesses and homes across all distances in North America. The company offers: within the contiguous United States FedEx Freight Priority, when a customer’s supply chain needs must be met quickly; when a customer is able to trade time for cost savings, the FedEx Freight Economy and FedEx Freight Direct, a service designed to meet the demands of the expanding e-commerce market for the delivery of heavy, bulky goods to homes and businesses’ doors. Additionally, FedEx Freight provides freight delivery to the majority of Puerto Rico’s and the U.S. Virgin Islands’ locations.

FedEx Services

Sales, marketing, IT, communications, customer service, technical support, billing and collection, and other back-office services for our transportation segments are provided by FedEx Services.

FedEx Logistics

With a comprehensive suite of integrated logistics solutions that include air and ocean cargo transportation, specialty transportation, customs brokerage, trade management tools and data through FedEx Trade Networks Transport & Brokerage, and third-party logistics and supply chain solutions through FedEx Supply Chain, the operating segment known as FedEx Logistics plays a crucial role within the FedEx portfolio.

FedEx Office

Copying, digital printing, professional finishing, signs, computer rental, corporate print solutions, packing services, FedEx Express and FedEx Ground shipping, and Hold at FedEx Location are all offered by FedEx Office.

FedEx Dataworks

FedEx Dataworks builds digital solutions that optimize operations, digitize supply chains, and create new opportunities for our customers, their customers, and the FedEx of the future using the powerful data insights generated by the FedEx network.

FedEx Corp. Key Financials

•  FedEx reported earnings of $1.286 billion and annual revenue of $69.217 billion for fiscal year 2020, a decrease of 0.7% from the previous fiscal cycle. Its annual net income for 2020 was $1.286B, a 138.15% increase from 2019.
• FedEx generated $83.959 billion in annual revenue in 2021, a 21.3% increase from 2020. Its annual net income for 2021 was $5.231B, a 306.77% increase from 2020.
• FedEx generated $93.512 billion in annual revenue in 2022, a 11.38% increase from 2021.
• For the twelve months ending August 31, 2022, FedEx generated $94.751 billion, a 9.36 percent increase over the previous year.
• For the twelve months ending August 31, 2022, its net income was $3.589 billion, down 29.6 percent from the previous year and its operating income was $6.245 billion
• For 2022, it has total assets of $85.994 billion, and total equity of $24.939 billion.
• As of May 2022, it had 547,000 employees.

FedEx Corp. Controversies

FedEx Corp. Allegations of controlled substances distribution

FedEx was charged with conspiring with Superior Drugs and the Chhabra-Smoley Organization to distribute controlled substances on July 17, 2014. The U.S. Department of Justice’s U.S. Attorney’s Office issued a statement on July 17, 2016, confirming that it had requested the dismissal of the indictment from U.S. District Court Judge Charles Breyer, without explaining why.

FedEx Corp. Illegal Parking

FedEx and other parcel delivery services were criticized by Safe Streets activists for frequently parking their vehicles illegally in bike lanes while making deliveries, putting cyclists in danger.In a 2018 letter, the transportation agency in Washington, D.C., criticized them along with their peers.

FedEx Corp. Allegations of Tax Avoidance

As a result of the Tax Cuts and Jobs Act of 2017, FedEx was included on CNBC’s list in December 2019 along with 378 other Fortune 500 companies that “paid an effective federal tax rate of 0% or less.” According to the New York Times, FedEx lobbying resulted in the payment of $1.5 billion in taxes after the 2017 fiscal year (an effective tax rate of 34%), followed by $0 after the 2018 fiscal year (an effective tax rate of 0%).

Conclusion

FedEx motivates its employees to remain focused on safety, the highest ethical and professional standards, and the requirements of their customers and communities. By 2040, FedEx intends to operate carbon-neutrally and is committed to connecting people and opportunities around the world in a responsible and