- Introduction
- FedEx corporate structure
- A shipping company built on speed
- 2000s: Major milestones and partners
- Scrutiny and controversy
- FedEx legacy
FedEx Corp.
- Introduction
- FedEx corporate structure
- A shipping company built on speed
- 2000s: Major milestones and partners
- Scrutiny and controversy
- FedEx legacy
- Date:
- 1971 - present
- Ticker:
- FDX
- Share price:
- $272.87 (mkt close, Oct. 24, 2024)
- Market cap:
- $66.67 bil.
- Annual revenue:
- $87.59 bil.
- Earnings per share (prev. year):
- $16.48
- Sector:
- Industrials
- Industry:
- Air Freight & Logistics
- CEO:
- Mr. Rajesh Subramaniam
- Headquarters:
- Memphis
FedEx Corp. is a global leader in transportation, e-commerce, and logistics; the company started by introducing express shipping services to the U.S. in the 1970s. Founded in 1971 as Federal Express Corp. in Little Rock, Arkansas, FedEx is best known as a shipping company. In addition to delivering packages and freight worldwide via air and ground transportation, FedEx also provides office and print services, data analytics services, supply chain products and services, and more.
FedEx corporate structure
As of 2024, FedEx Corp. is a parent company with seven subsidiaries:
- FedEx Express specializes in time-sensitive deliveries (including overnight shipping) in the U.S. and internationally.
- FedEx Services provides information technology (IT), sales, customer service, and marketing to customers and other FedEx divisions.
- FedEx Ground uses ground transportation (vans and trucks) to ship small and large packages in North America.
- FedEx Freight combines shipments from several companies into one truckload (known as less-than-truckload shipping) to provide cost-effective delivery services in North America via ground transportation.
- FedEx Office sells office supplies as well as printing, copying, film processing, and other related services at retail stores and online.
- FedEx Logistics provides air and ocean freight forwarding, supply chain products and services, customs brokerage services, and trade management tools and data to customers and other FedEx business units.
- FedEx Dataworks uses data to create logistic products and services for customers and other FedEx businesses.
A shipping company built on speed
The history of FedEx begins with some company lore. Six years before the company was created, FedEx’s founder Frederick W. Smith submitted a business school project that proposed a centralized hub-and-spoke distribution system. It featured a dedicated fleet of planes, combined with a single hub where all packages could be routed for redistribution. Such a system, Smith argued in his paper, would permit much faster and more efficient overnight deliveries compared with existing methods, which relied on commercial passenger planes and less coordinated logistics. Although the hub-and-spoke system later proved vital to the company’s success, Smith received an average grade because his professor thought the idea was impractical.
After its initial founding in Little Rock, Arkansas in 1971, Federal Express Corp. began operations in 1973 in Memphis, Tennessee, which provided financial incentives to move the company and where its headquarters are today. The company quickly became known for providing overnight delivery, augmenting its service in 1975 with convenient and easily accessible dropboxes.
Another bit of lore is that just a few months after FedEx started business in 1973, Smith, an experienced gambler, took the fledgling company’s last $5,000 to Las Vegas and bet it all on a blackjack table in a last-ditch effort to pay a $24,000 fuel bill. He won $27,000 and wired it back to Memphis, helping to keep the company afloat for a few more days and giving it enough time to secure more financing.
Smith envisioned the burgeoning express delivery service as an integrated system of airplanes and trucks. Building its night flights from Memphis to serve 25 U.S. cities, FedEx didn’t post a profit until 1976. The company went public two years later on the New York Stock Exchange (NYSE) under the ticker symbol FDX.
FedEx began offering intercontinental services in 1984, the same year it made its first acquisition: Gelco Express International, a transportation and logistics company. Other acquisitions followed, with the purchase of air freight company Tiger International in 1989 and Evergreen International Airlines in 1995.
In 1994, Federal Express shortened its name to FedEx and launched the fedex.com website, making the company one of the first to provide online package tracking. More acquisitions followed, including the purchase in 1998 of transportation holding company Caliber System and its subsidiaries.
2000s: Major milestones and partners
The year 2000 brought several significant achievements for FedEx:
- The company’s core shipping service was renamed FedEx Express.
- FedEx Services began operating.
- Caliber System companies were integrated into FedEx Ground.
- Tower Group International and World Tariff were acquired to form FedEx Logistics.
Also in 2000, FedEx partnered with Amazon.com to provide shipping for the latest installment of the Harry Potter franchise: Harry Potter and the Goblet of Fire. The promotional event marked the beginning of a long collaboration, positioning FedEx as a key participant in the growing e-commerce industry.
In the early 2000s FedEx began addressing the impact of email and electronic documents on the shipping business. Part of the company’s response included launching FedEx Electronic Trade Documents, which enabled customers to generate and transmit customs forms digitally.
A major acquisition occurred in 2004 with the purchase of Kinko’s. The office supply and services chain was renamed FedEx Kinko’s and then became FedEx Office in 2008.
FedEx has grown its global footprint over many years, largely through acquisitions. Some of the company’s international purchases included:
- UK-based express transportation company ANC Holdings in 2006
- Chinese express shipping business Tianjin Datian W. Group in 2007 (50% stake)
- Hungary-based express shipping operation Flying Cargo in 2007
- India-based Prakash Air Freight and Unifreight in 2011
- Mexican package delivery company MultiPack in 2012
- Polish express and standard-speed shipping company Opek in 2012
- French business-to-business express transportation company TATEX in 2012
- Brazil-based transportation and logistics company Rapidão Cometa in 2012
- African ground shipping company Supaswift in 2014
Closer to home, in 2014 FedEx pushed further into e-commerce with the purchase of Florida-based Bongo International, a company specializing in helping businesses move products across international borders. In 2015, FedEx bought GENCO, a provider of third-party logistics, a service that coordinates deliveries.
“We live or we die by the clock.”
In the 2000 film Cast Away, Tom Hanks plays a FedEx systems analyst stranded on an island after a plane crash who fixates on delivering a package that remains unopened throughout the movie. In a wry Super Bowl ad three years later, FedEx revealed the package’s improbable contents—a satellite phone, GPS, water purifier, and fishing gear—all things that could have saved him from his five-year ordeal.
The company has also expanded its efforts to reduce its environmental impact. In 2005, FedEx unveiled California’s then-largest corporate solar power system—and in 2010 rolled out its first all-electric trucks. The company in 2021 embarked on an initiative to become carbon neutral by 2040.
Scrutiny and controversy
FedEx is no stranger to scandal and controversy, including these events that made news headlines:
- In 2014, Fedex was indicted by the U.S. Department of Justice for knowingly delivering illegal prescription drugs to dealers and addicts. The case was dismissed two years later.
- FedEx in 2015 agreed to pay $228 million to settle a class action related to misclassifying drivers as independent contractors instead of employees.
- Despite openly supporting an assault weapons ban, FedEx refused to stop providing shipping discounts to members of the National Rifle Association (NRA) in the wake of the February 14, 2018, shooting at a Parkland, Florida, high school that killed 17 and wounded 17 more. In October, FedEx reversed its policy, saying it would no longer offer discounts to NRA members after a mass shooting at a Pittsburgh synagogue left 11 dead. FedEx said its decision wasn’t prompted by the October 27 incident.
- Also in 2018, FedEx’s Bongo International subsidiary exposed more than 100,000 customer records on an unsecured server. The data breach revealed users’ passports, driver’s licenses, and other identification documents.
- In 2023, members of a class action accused FedEx of fraud by replacing the odometers on thousands of diesel delivery vans and then reselling them with inaccurate mileage. The case was dismissed in March 2024.
FedEx legacy
The FedEx name today is synonymous with overnight delivery, but its success wasn’t achieved in a day. FedEx has solidified its position as a leader in transportation and logistics through acquisitions and global expansion. Technologies such as online tracking, hybrid and fully electric trucks, and solar panels for electricity production have helped the company become more efficient and build a reputation for environmental stewardship.
Despite its innovations, FedEx has faced challenges, including legal disputes over labor practices, allegations of drug trafficking, data breaches, and odometer fraud. Also, as one of the world’s largest logistics companies, it contributes significantly to greenhouse gas emissions (although, as of 2024, it has set a goal of complete carbon neutrality by 2040). The company remains a critical force in the global economy, striving to balance innovation with efforts to address environmental and reputational concerns.