Post on 27-Mar-2015
History of FedEx
• 1973 – Began operations as first integrated air/ground express carrier
• Delivered 186 packages to 25 U.S. cities using 14 Falcon jets.
• Today, FedEx connects more than 211 countries in less than 24-48 hours, & delivers 3.3 million packages daily using 667 dedicated aircraft (the world’s largest all-cargo fleet)
•
Growth of the Express Delivery Industry
• Increase in high-tech & high-value added products as a % of all economic activity
• Rapid globalization in the marketplace
• Fast-cycle logistics
• Emergence of the Internet & e-commerce
Express Delivery
Express delivery services consist of:
• The expedited collection, transport, & delivery,
• Of documents, printed matter, parcels, and/or other goods,
• While tracking the location of, & maintaining control over, such items throughout the supply of the service
Life Before FedEx
• Have you ever used express delivery?
• What was it like to get a letter, document or goods delivered rapidly, securely and on-time?
• Express Delivery Industry has become the leading facilitator of trans-continental trade
• International air cargo accounts for about 2 percent of the tonnage moved, but over 40 percent of the total value of those goods
• For every $1 spent on express transportation, companies can save $1.50 in warehousing & inventory costs
Express Delivery Industry
U.S. Experience – Memphis
• Approx. 53,000 direct and indirect jobs
• Since early 1980s, over 130 foreign- owned firms from 22 countries employing 17,250 workers
• Companies such as Nike, Apple Computer and Disney established based on proximity to FedEx
U.S. Experience – Memphis
• From 1995-2000, company relocations and expansions generated - 10,000 new jobs
- Over 12 million square feet of new space
- Over USD 710 million in new investment
• Economic impact on the surrounding region from 1995 - 2004 is estimated at USD 90 billion
What Does a Modern Economy Need?
• Philips Semiconductors, Inc. business need - Consolidate & centralize international supply chain
- Customers frustrated due to consistently late shipments - No visibility of goods in transit due to multi-carrier network
- Growing pipeline of inventory due to extended transit time
Philips Semiconductors, Inc
• Source plants spread over 17 countries
• Each plant had different shipping operation requiring Philips to manage a network of 30 airlines, 6 customs brokers & 8 freight carriers
• Fragmented supply chain meant a 2 week total transit time
Philips Semiconductors, Inc
• Information about product in transit incomplete & delivery schedules unpredictable
• Customers demanded more speed & reliability
• Began stocking buffer supplies in additional depots near customers adding inventory
Philips Semiconductors, Inc
What other industry could respond to this???
The FedEx Solution:
One-stop transportation, warehousing & distribution network with extensive international capability
Philips Order Management System
•
Today’s Marketplace – Global
• SMEs want to reach new markets
• Multinationals want to ensure efficiency
• Explosion of e-commerce
- Internet-enabled commerce in US to reach USD 3 trillion in 2004 (both B2B and B2C)
FedEx Hub-and-Spoke System
• FedEx collects & transports shipments from the door of the shipper to sorting hubs located in the U.S., Europe & Asia
• Shipments are unloaded, sorted & transloaded w/in 4 hours onto outbound planes for a time definite, customs- cleared, delivery to the door of the recipient as early as 8:am the next business day
• In 1999, approx. $50 billion in economic benefits generated from exports, imports, transportation and employment
– 30 billion in export benefits
– 20 billion in import benefits
– Approx. 350,000 jobs created
Benefits of the Express Delivery Industry in ASEAN
Creating the Express Delivery Infrastructure
• GATS commitments in express delivery services
- Remove barriers and limit new barriers
- Certainty of existing market conditions
• Trade facilitation
- Partnership in infrastructure development