FedEx Express Segment
Overview
FedEx Express invented express distribution in 1973 and remains the industry
leader, providing rapid, reliable, time-definite delivery of packages, documents
and freight to 215 countries. FedEx Express offers time-certain delivery within
one to three business days, serving markets that comprise more than 90% of the
world's gross domestic product through door-to-door, customs-cleared service,
with a money-back guarantee. FedEx Express's extensive air route authorities
and transportation infrastructure, combined with its leading-edge information
technologies, make it the world's largest express transportation company. FedEx
Express employs more than 133,500 employees and operates approximately 52,000
drop-off locations, 645 aircraft and 47,000 vehicles and trailers in its integrated
global network.
Services
FedEx Express offers a wide range of shipping services for delivery of documents,
packages and freight. Overnight document and package services are backed by
money-back guarantees and extend to virtually the entire United States population.
FedEx Express offers three U.S. overnight delivery services: FedEx First Overnight,
FedEx Priority Overnight and FedEx Standard Overnight. FedEx SameDay service
is for urgent shipments up to 70 pounds to virtually any U.S. destination. FedEx
Express also offers express freight services to handle the needs of the time-definite
global freight market.
With unmatched air route authorities and an extensive air/ground infrastructure,
FedEx Express provides customs-cleared, door-to-door service to more international
locations than any competitor. International express delivery with a money-back
guarantee is available to 215 countries, with a variety of time-definite services
to meet distinct customer needs. FedEx Express also offers the most comprehensive
international freight service in the industry, backed by a money-back guarantee,
real-time tracking and advanced customs clearance.
During 2004, as part of its continued international expansion, FedEx Express:
Increased capacity on flights between Europe and Asia. For instance, by adding
a refueling stop in Kazakhstan, FedEx Express was able to increase its cargo
capacity between Hong Kong and Paris by an additional 55,000 pounds for each
flight.
Expanded our network within Europe and Asia. FedEx Express added 13 additional
weekly flights in and out of Hong Kong, allowing us to offer even greater access
to Asia from the U.S. and Europe as well as within the Asia-Pacific region.
FedEx Express also now provides customers with better intra-Asian connectivity
as a result of adding six weekly flights to Subic Bay, Philippines, linking
customers to the FedEx AsiaOne network and the rest of the world.
Increased our presence in China. FedEx announced plans to establish a new regional
headquarters in Shanghai and to expand service from 220 Chinese cities to 320
over the next five years. The new regional structure there will provide broader
expertise and expanded resources and service offerings to mainland customers
as part of our long-term commitment to China. FedEx Express also launched the
industry's first direct flight from southern China to North America, further
expanding our airlift capacity from China.
Launched express service to Iraq. Our role as one of the world's leading drivers
of international trade and growth will be a significant asset to Iraq and its
business community as the country works toward rebuilding its infrastructure
and economy.
FedEx Ground
Overview
By leveraging the FedEx brand, maintaining a low cost structure and efficiently
using information technology and advanced automation systems, FedEx Ground continues
to enhance its competitive position as a leading provider of business and residential
money-back-guaranteed ground package delivery services. FedEx Ground serves
customers in the small-package market in North America, focusing primarily on
business and residential delivery of packages weighing up to 150 pounds. FedEx
Ground provides ground service to 100% of the United States population and overnight
service up to 400 miles to approximately 97% of the United States population.
Through a subsidiary, service is also provided to 100% of the Canadian population.
In addition, FedEx Ground offers service to Puerto Rico, Alaska and Hawaii via
a ground/air network operation coordinated with other transportation providers.
Over the past two years, FedEx Ground has improved the speed, reach and service
capabilities of its network, by:
Reducing transit time by a day for more than 40 percent of its lanes.
Introducing or expanding overnight ground service in over 20 metropolitan areas.
At the same time, to meet growing customer demand for its services, FedEx Ground
has pursued its network capacity expansion program, which is expected to double
its daily package volume capacity to 5.1 million by 2010. The multi-phase plan
includes the addition of nine new central distribution hubs and the expansion
of 30 existing central distribution hubs, as well as the expansion or relocation
of more than 290 existing facilities. In 2004, FedEx Ground began construction
on four of the nine new hubs in the metro areas of Cincinnati, Dallas, Memphis
and Hagerstown, Maryland. Each of the new hubs will feature the latest automated
sorting technology.
Along with the continuing expansion of FedEx Ground's business-to-business
service, the increasing popularity of the FedEx Home Delivery service, which
reaches nearly 100% of U.S. residences, has driven growth in FedEx Ground's
package volumes and financial results. FedEx Home Delivery is the only service
dedicated exclusively to meeting the delivery needs of residential customers.
No other carrier provides routine Saturday and evening delivery and premium
options such as day-specific, appointment and signature delivery. FedEx Home
Delivery brings unmatched services to residential shippers and their customers
and also offers a money-back guarantee. To maintain a low-cost structure, FedEx
Home Delivery takes advantage of the FedEx Ground network for pickup, package
sorting and linehaul operations.
FedEx Freight Segment
FedEx Freight provides regional next-day and second-day and interregional LTL
freight services and is known for its exceptional service, reliability and on-time
performance. Through a comprehensive network of service centers and advanced
information systems, FedEx Freight provides regional LTL freight service to
virtually all U.S. ZIP Codes, including Alaska and Hawaii. FedEx Freight also
offers a premium service between all regions in the U.S., providing seamless
coverage and industry-leading transit times. FedEx Freight's regional and interregional
LTL service is supported by a no-fee money-back guarantee on eligible shipments.
Internationally, FedEx Freight serves Canada, Mexico, Puerto Rico, Central and
South America, the Caribbean, Europe and Asia via alliances and purchased transportation.
Similar to its major competitors, FedEx Freight has a dynamic fuel surcharge
that applies to the majority of its customers. The surcharge percentage is subject
to weekly adjustment based on a rounded average of the national U.S. on-highway
average price for a gallon of diesel fuel.
FedEx Freight provides tailored shipping solutions to help shippers meet tight
deadlines. Through its many service offerings, FedEx Freight can match customers'
time-critical needs with reduced transit times, after-hours pickup or delivery,
or same-day delivery. During 2004, FedEx Freight further reduced transit times
in a number of regions across the U.S. in a continuing focus on fast-cycle distribution.
Currently, approximately 90% of FedEx Freight shipments are delivered next-
or second-business-day. FedEx Freight has also increased capacity at a number
of key locations to better meet customer demand. FedEx Freight's fully integrated
Web site and other e-tools, including a bill of lading generator and e-mail
delivery notification, make freight shipping easier and bring customers closer
to their own account information.
FedEx Freight has leveraged its relationships with other FedEx operating companies
to meet the increasingly global needs of customers. In 2004, the FedEx Freight
sales force began selling FedEx Express freight services. At the same time,
FedEx Services sales representatives are sharing LTL leads with their counterparts
at FedEx Freight. The sales effort is one phase of a broad initiative aimed
at leveraging FedEx's competitive advantage in U.S. domestic freight services.
In addition, FedEx Freight has collaborated with FedEx Trade Networks and FedEx
Ground to serve Asia. FedEx Trade Networks facilitates the preparation and containerization
of shipments in Asia and manages the ocean portion of the service, as well as
customs clearance and document preparation, while FedEx Freight and FedEx Ground
handle the inland distribution transportation once shipments are cleared at
U.S. container freight stations in gateway cities.
FedEx Freight subsidiary Caribbean Transportation Services, Inc. ("CTS")
is the leading provider of airfreight forwarding services between the United
States and Puerto Rico, specializing in arranging the shipment of heavyweight
and oversized cargo. CTS, which also offers service to the Dominican Republic
and Costa Rica, provides several delivery options for door-to-door or airport-to-airport
airfreight forwarder services, principally to the medical, pharmaceutical and
technology sectors.
FedEx Kinko's Segment
FedEx Kinko's specifically focuses on key customer segments that are important
to the other FedEx companies. To small- and medium-sized business customers,
FedEx Kinko's provides complete document management and meets basic office needs.
To large corporate customers, FedEx Kinko's provides facilities management and
outsourcing of copying, printing and document management services. To the rapidly
growing "mobile professional" market segment, which includes business
travelers and mobile salespeople, FedEx Kinko's provides a comprehensive "office
on the road," including Internet access, videoconferencing and presentation
support.