FedEx develops partnerships with other brands it can help FedEx improve and increase the range of services and capabilities.
Asian Economies: FedEx should try to reduce its dependence of the US markets, and just how the TNT acquisition helped them establish in the European market, FedEx must develop something that will give them presence in the Asian economies. Growing their presence in the Asian market will help them grow its international segment revenue and not have to only depend on the US revenue.
Fuel Negotiations: Fuel prices are constantly fluctuating and what can really help FedEx is that they set up a negotiation with fuel companies to provide a set price for them on fuel. There are high chances of fuel price increasing, so by setting up a contract/negotiation, the company can set a stable price that will not fluctuate with the economy and will keep their fuel costs the same. Another fuel negotiation that can be set up is to have the fuel companies provide cost effective fuel to decrease the overall cost and FedEx can be able to provide competitive prices for its services.
Competition: FedEx’s top competitors are UPS, USPS, and DHL; all these companies are investing in marketing as well as research and innovation to be able to compete with FedEx. (Pratap, 2018) Just like FedEx is working on making their company grow, their competition will also work on improving their systems to be able to compete with all other companies in the market.
Economic Fluctuations: The economy will always be changing and having constant economic fluctuations is common, however having economic fluctuations in the international markets can significantly affect sales and revenue. The stronger dollar, which leads to decrease of net income for the US based economies, has really been affecting the income from international markets. (Pratap, 2018) Because FedEx is an international business, the economic fluctuation will always affect them, whether it’s for good or bad.
Regulatory Threat: Laws and rules are constantly changing and that goes for the freight/transportation economy as well. They face compliance related costs as well as other costs that may come up regarding the several markets they operate. One of the new laws/rules that have affected transportation is the number of hours that drivers can operate, these new rules come with costs and new rules that a company must develop and put in place in order to comply with those new regulations which also have significant costs to the company. The more regulations get established, the higher the costs of keeping up with those regulations will be so FedEx must be able to comply with those regulations while meeting certain costs and future revenue. • Capacity vs. Demand Management: Demand is always hard to predict and it can be hard for a logistics company to balance capacity and demand. A company must know how to balance capacity and demand because if capacity is too high and demand is not that high then the company will be losing due to fixed costs. However, a logistics company can also face opportunity loss if the demand is too high and the capacity is not high enough, therefore a company must be able to find the balance between demand and capacity in order to provide the best profit for a company.
Fuel Cost Increase: We are living in an economy where the cost of fuel continues to fluctuate, increasing one day and decreasing the next. Just like everyone else, when the price of the fuel decreases there is no problem, however, when the cost of the fuel increases, the cost of transporting goods will be higher for the company. What usually results from this is increasing the cost of the service for the customer, which for the most part does not result in good reactions from the customers, so the increase of fuel costs extremely effects the logistics company. The future of the company is growing and will continue to grow for the greater good of the company. Ever since the invention of the internet and E-Commerce shopping, the company’s business has exploded to exponential proportions and they’ve created more jobs, hired more workers, and have created more work for it’s workers over the last two decades than over the last four decades before it. There is competition in this field but it’s very limited and is pretty much designated to companies such as UPS, DHL, and the USPS. There are other smaller companies out there but not on the same level of competition as the other companies I’ve mentioned above. There are other companies on the rise such as Amazon, however, Amazon is specializing in manufacturing and delivering of their products.
Fed-Ex doesn’t manufacture any of the products they deliver. They are a service-based company. There are overhead costs, fuel costs, maintenance costs, and service costs, however, the costs they endure aren’t as much as a company that manufactures its own goods and delivers its own goods. The assessment of this company is that it’s a superior company to its competitors. One reason it can be assumed is because they have no need for union representation and have done a great job historically at keeping the unions out and keeping the workers happy and satisfied with everything they do and what the company offers to its employees. The Fed-Ex corporation also prides itself on having separate divisions and drivers for their air bound packages and ground bound packages. Whereas UPS and DHL will deliver their air packages and ground packages at the same time with the same driver delivery system which causes a higher percentage of packages to be delivered late to their customers, requires drivers to work longer to make their time commitment delivery system which costs more overtime pay and stress to their workers, and businesses who need certain packages delivered buy a specific timeframe has a longer time window with other companies other than Fed-Ex. Fed-Ex will continue to expand its operations and continue to be successful for a very long time to come.
Interesting facts about Fed-Ex. 1. Fed-Ex keeps empty planes in the sky. This would seem to cost the company too much extra money but they have such a large quantity delivery system that they have to keep aircraft on standby to ensure that any extra packages that cannot make it on its original aircraft for its original delivery destination, they will have the empty aircraft on standby ready and available to handle the overload and deliver them to its proper destination and hubs. Their aircraft also has anti-missile counter attack capabilities and are the only commercial jets in the world that do this for the safety of their pilots and their packages, 2. Interesting fact number 2. The Fed-Ex corporation was thought of in 1965 by a man named Frederick W. Smith. He was a Yale graduate. He wrote a term paper on a worldwide delivery system that would revolutionize the shipping industry. Most companies relied on passenger route system’s, but this didn’t make sense to Frederick W. Smith.
In August 1971, after serving his country in the armed forces, Smith bought Arkansas aviation systems located in Little Rock Arkansas. With his term paper still on his mind and his revolutionary idea of a delivery system, he created Fed-Ex. Fed-Ex began its actual operations in April of 1973 with 14 airplanes and 186 packages and delivered them all to over 25 U.S. cities from New York to Florida. It didn’t start to show major profits until 1975 but soon became the premier carrier of high priority packages and goods in the marketplace and the standard for shipping packages Express was established.