FedEx details $1.7 billion plan to shed jobs, aircraft and underused assets

Published: Wednesday, October 10, 2012, 10:04 a.m. Updated 2 hours ago NEW YORK — FedEx Corp., the world’s second-largest package delivery company, on Wednesday detailed its plan to boost profit by $1.7 billion annually by shedding jobs, aircraft and underused assets. FedEx aims to reach that goal within three years through cost cuts and efficiency improvements. The much anticipated restructuring is a response to a shift by customers to slower, less expensive means of delivery as the global economy struggles to grow. Founder and CEO Fred Smith said most of the cost cuts will come in the company’s Express and Services units, which have been hurt the most by the global economic conditions. Smith said a voluntary buyout program announced in August should reduce “fixed head count by several thousand people.” A majority of those employees are in the United States. Express is where FedEx got its start in 1971, and it is still the company’s biggest segment by far. The division moves 3.5 million packages on an average day, mostly by air. It’s been hit hard as customers shift to slower delivery methods, such as trucks or ships, to save money. Also, as technology products get lighter, FedEx charges less to ship them. FedEx has been disposing of older aircraft and reducing flights to reduce the unit’s costs. Express reported revenue of $26.5 billion in the latest fiscal year and has more than 146,000 employees worldwide — roughly two-thirds of those are in the U.S. The Services unit is FedEx’s logistics division, but it also includes FedEx Office, formerly Kinko’s. It was formed in 2000 and with annual revenue of $1.7 billion in fiscal 2012, is one of FedEx’s smallest units. It has 13,000 employees, all based in the U.S. Some of the money will be saved through improved technology that allows FedEx to streamline staff and operations, Smith said. It’s also trimming overhead. “The key is striking the right balance between volume growth and yield improvements,” Smith said in a statement following the Tuesday opening of a meeting with investors and lenders in Memphis. “With slow economic growth, however, the cost-reduction programs we will describe ... are also essential to achieve our financial goals.” FedEx spelled out more details of the plan during the meeting’s second day. At the start of Wednesday’s session, FedEx slightly reduced its growth outlook for the U.S. economy from just a month ago. It maintained its forecast for global growth. Among the cost cuts included in the company’s plan: expected savings of $700 million through a slim-down of its network — half overseas and half at home. It expects to save about $300 million in fuel and other costs from using newer planes, and $400 million by making staff more efficient and eliminating redundancies. About half of the cost reductions are expected to be put in place in the current fiscal year that ends in May. The rest will be implemented in the following fiscal year. The company assured investors that it won’t cut back too much — or too quickly — and hurt its revenue growth. FedEx shares rose 5.2 percent, or $4.41, to close at $89.99. That’s the biggest one-day percentage gain since December. Read more: http://triblive.com/business/headlines/2752945-74/fedex-company-growth-cost-fiscal-plan-billion-cuts-million-smith#ixzz28znerv91 Follow us: @triblive on Twitter | triblive on Facebook

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FedEx Express Expands ‘Priority Alert’ Services; Adds More Than 70 International Markets

Press Release: FedEx Express – Mon, Oct 1, 2012 8:00 AM EDT MEMPHIS, Tenn.--(BUSINESS WIRE)-- FedEx is offering added connections and peace of mind for global customers who require the highest level of reliable monitoring for their time and temperature-sensitive shipments. FedEx Express, a subsidiary of FedEx Corp. (FDX) is rolling out a broad expansion of its ‘Priority Alert’ and ‘Priority Alert Plus’ inbound and outbound services—introducing them to more than 70 countries that span the globe via www.fedex.com/peaceofmind. These contract-only services, which had been exclusive to the United States, will also be offered domestically within Mexico, the United Arab Emirates, Switzerland, India and Canada. Wrapped with a bright pink tape, FedEx Priority AlertTM packages stand out from the rest, signaling their priority status when it comes to loading and unloading. Because FedEx Priority Alert customers ship critical materials for the financial, aerospace, electronics, manufacturing and healthcare industries, they need to know their packages are well monitored when minutes matter most. This is why the service also offers 24/7 support from a team of dedicated global service analysts. These specially-trained analysts provide an added level of proactive monitoring and notification of the status of a shipment, whether it’s moving through the United States or internationally. FedEx Priority Alert PlusTM goes one step further—proactive recovery. Designed primarily for the unique needs of the healthcare industry, Priority Alert Plus includes added services to preserve critical shipments, such as dry ice replenishment, gel pack reconditioning and access to cold storage to help keep potentially life-saving shipments safe, and to protect the integrity of the contents from start to finish. “While speed and reliability are key requirements for today’s global supply chains, providing end-to-end visibility with 24/7 monitoring and recovery measures meets another vital requirement—agility,” said Carl Asmus, vice president of Market Development for FedEx. “With the global expansion of our Priority Alert services we can improve customer service by offering priority boarding and monitoring services for their critical international shipments.” The global expansion of these monitoring services also highlights the company’s commitment to strategic international growth designed to make the global marketplace more accessible to our customers.

FedEx Express Rate Hike Could Hit Slower Service Users Hardest

FedEx Express Rate Hike Could Hit Slower Service Users Hardest Mark Szakonyi, Associate Editor | Sep 19, 2012 7:34PM GMT The Journal of Commerce Online Pricing imbalance reflects carrier's attempt to stave off shift to lower-cost options FedEx Express users of slower services will bear more of the brunt of the parcel carrier's price hike than shippers that use faster options, as the company works to slow shippers from shifting to cheaper delivery options,