Logistics is managing the flow of goods, information and other resources, including energy and people, between the point of origin and the point of destination to meet the requirements of consumers. The main functions of logistics include purchasing, inventory management, transportation, and warehousing.

The transportation industry can be identified in three major sectors such as shipping, passenger transport and manufacturing of equipment. In this paper we discuss about shipping which is responsible for transportation of supplies.

FedEx has acquired and realigned number of small companies and managed synergies in order to control more of the market. Acquisition strategy of FedEx has given opportunity to capture different areas of logistics and transportation business with different client base and locations thereby integrating their operations to achieve better synergies and economies of scale.

Business without borders – Having their own fleet enabled them to reconfigure their systems and reroute existing flights in order to take advantage of the markets. Same way feeding three costly networks–air, ground, and information technology is extravagantly expensive.

They operated in a Global scale in order to offer customers limitless opportunities thereby expanding customer base and achieve global economies of scale.

FedEx involves in many Corporate Social Responsibility programs as a branding strategy by carrying pandas, penguins and whales across the countries to provide them with proper living conditions. Though this type of transportation is considered risky FedEx does this with affection in order to protect them.

They maintain a strong brand name as a strategy and advantage of its brand image, the name that customers have counted on for reliable service and cutting edge technology.

Frederick W. Smith

Chairman, President and

Chief Executive Officer

Fred Smith was a charismatic-visionary leader. He pioneered the transportation field and founded FedEx when he was 27 years of age. He had a desire, a drive to lead the company. He was confident, intelligent and also had the job-relevant knowledge in the field.

His military background helped him to believe that the FedEx’s people are more valuable than technology. Fred always started thinking outside the normal which made FedEx a great success.

Though he was a risk taker and invested highly in IT he succeeded in the business because of his visionary thinking and determination to go ahead.

Fred re-shaped the entire transportation industry. FedEx believes in leadership through “accessibility” which makes all forms of interaction with customers.

(b) Transportation and logistics infrastructure within FedEx Corporation

FedEx acquired its own fleet of transport while competitors were hiring space on commercial airlines and sub-contracting their shipments to 3rd parties. With this, the need for booking space in commercial vessels ceased and FedEx experienced cost advantage over other companies.

Landing larger freight planes were allowed after the de-regulation of the airline industry and using these reduced the operating cost. After de-regulation of the trucking industry, FedEx established regional trucking system further reduced the cost.

FedEx’s unmatched air route authorities and infrastructure make it the world’s largest express transportation company, providing speedy, reliable and time-definite transportation with easy access to the locations.

To cut down cost and time, packages from all over the country were flown to a central point or hub at night where traffic lanes were comparatively empty. Packages were sorted, redistributed at the hub and again flown to their ultimate destination to reach them next day.

Even with the limitations such as adherence to the skyline regulations, ground clearance and administrative issues, FedEx managed to make this a turning point towards their success. (Please refer annexure page for more details)

Value added services such as multiple warehousing, scanners given to drivers to capture package information and overnight distribution system were external factors contributed to the growth in FedEx business.

Just-in-time inventory management created demand for speed and accuracy in transportation and shortened the lead time for companies

Integration between FedEx and customers blocked them from going to competitors.

How it helped FedEx