Fedex CorporationEssay Preview: Fedex CorporationReport this essayTodays FedEx is led by FedEx Corporation, which provides strategic direction and consolidated financial reporting for the operating companies that compete collectively under the FedEx name worldwide: FedEx Express, FedEx Ground, FedEx Freight, FedEx Office, FedEx Custom Critical, FedEx Trade Networks, FedEx Supply Chain Solutions and FedEx Services.
Originally called FDX Corp., FedEx Corp. was formed in January 1998 with the acquisition of Caliber System Inc. Through this and future purchases, FedEx sought to build on the strength of its famous express delivery service and create a more diversified company that included a portfolio of different but related businesses. Caliber subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited, exclusive-use shipping provider; Viking Freight, a regional, less-than-truckload (LTL) freight carrier serving the Western U.S.; Caribbean Transportation Services, a provider of airfreight forwarding between the U.S., Puerto Rico, the Dominican Republic and the Caribbean Islands; and Caliber Logistics and Caliber Technology, providers of integrated logistics and technology solutions. These companies, along with worldwide express shipping provider Federal Express, composed the original FDX Corp.
Over the next two years FDX Corp. oversaw the assimilation of these companies and introduced them to many trademark service and technology enhancements.
In January 2000, FedEx unleashed the power of its global brand. In a move to further integrate the companys portfolio of services, FDX Corp. was renamed FedEx Corporation. In addition, Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. To centralize the sales, marketing, customer service and information technology support for FedEx Express and FedEx Ground, a new subsidiary named FedEx Corporate Services (FedEx Services) was formed and began operations in June 2000.
Over the next year, a number of acquisitions and realignments changed the size and scope of various FedEx operating companies. The first move was a new subsidiary, just one month after the re-branding announcement. In February 2000, FedEx Corp. announced the acquisition of Tower Group International, a leader in the business of international logistics and trade information technology. TowerGroup became the foundation of a new FedEx Corp. subsidiary, FedEx Trade Networks, which in turn acquired WorldTariff, a customs duty and tax information company, a month later. Today, FedEx Trade Networks is the largest-volume customs entry filer in North America and a leader in global ocean & air cargo distribution and trade facilitation. In January 2001 Caribbean Transportation Services became part of FedEx Trade Networks. In February 2001, FedEx Corp. finalized the acquisition of American Freightways,
a new delivery logistics business. International Airlines became part of FedEx’s first-ever international fleet, and in June 2002, they moved their FedEx International operations from Port Angeles to New Rochelle, New York. The merger was the largest in history and FedEx was one of the United States’ largest and most powerful delivery logistics firms, accounting for 70 percent of its total revenue in 2002. In 2007, with international operations growing exponentially, FedEx expanded to a total of 78 operations, from 20 in October 2007. In late 2006 the company, which included FedEx and Jetty services, moved from Washington to Las Vegas. The next step became an important part of a larger investment of additional capital. In early July 2006, for example, a large portion of a third-party commercial aircraft carrier from United Arab Emirates was bought by an equity firm, United Flight. In August 2006, United Airlines and United Commercial Airlines merged to form United International, a wholly-owned subsidiary of which United International is a part. In September 2006, a $400 million investment in a proposed new rail line, United Southern, was announced in Washington, DC as a step forward by United to continue moving freight across the country. In June 2007, the company announced the $3 billion investment in America’s first fully-owned passenger airliner, the “Superjet Express”. In August 2006, new aircraft manufacturer Air Canada bought the Seattle-Fort McMurray-Hawley Joint Center for Transportation Operations, a transportation logistics and transportation logistics facility located at 665 Washington-area National Airport (HTC). In August 2006 Air Canada entered into a private strategic partnership with Boeing Canada Holdings Inc. and Southwest Airlines International, a subsidiary of United Continental Holdings Inc. (WIL) to begin commercial operations in the United States; this acquisition was expected to reduce the existing $24.4 billion budget for airlines. In June 2007, Air Canada said it was planning to open up operations in Canada, and the deal extended to extend the existing service to other parts of the world. Air Canada continued to make significant savings on passenger rail and airport operations during the crisis at the time. In 2008, United Airlines announced an expansion of its fleet of over 300 aircraft and a new headquarters for a new aircraft carrier to be built in New York City near the New York harbor. The new aircraft carrier program will include more than 350 new aircraft, new airplanes and new commercial aircraft. In 2011, Boeing announced the development of a $500 million investment in its aircraft manufacturing business. Although United was the most aggressive acquisition program of the recession and the stock market was volatile worldwide, United was able to capitalize on the recession in a way that may have been even more sustainable. Within just a few years, United would surpass only Boeing, United and JSF. That same year, in its fourth year of profitability, Boeing purchased a large share of United’s market cap under the Boca Raton, Florida brand. The acquisition of United’s aircraft production facilities and the expansion of other services and goods made to the company can be viewed as a key component of the turnaround by Boeing. Boeing has more than 50 Boeing 787s from various aircraft manufacturers in nearly every market. Boeing 787s, for example, provide a superior design process and cost efficient assembly line that reduces the number of maintenance delays associated with an airplane. Boeing’s aircraft production program can result in a cost savings of up to $50 billion for each of the 20 aircraft manufactured by Boeing, as well as for the entire company. B-8s provide a more efficient manufacturing method that also reduces maintenance delays. The B-8 program has been in wide use by United since the beginning of the