Nurettin Can Karaengel Can Bayrak Heitham Al-Shammari

MSA 644 Integrated Logistics Support Final Presentation December 2010

Background Company Variety Logistics Drivers Inventory Transportation Management Packaging Return Services Warehouse Management Rates Information Technologies Innovation Logistics Social Responsibility International Efforts Competition References
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 Founded in 1971 in Little Rock, AR. 1973 Federal Express began operation with 389 workers the modern

Air/ground express industry born 1978 listed on the New York Stock Exchange with the ticker symbol FDX. 1980 FedEx purchased Roberts Cartage established in 1947 and began offering expedited transportation services (now FedEx Custom Critical)

1981 FedEx launched international service to Canada

The FedEx Overnight Letter was introduced

1982

10 am delivery on time with money back guarantee American Freightways are established (now part of FedEx Freight)
1984

Began Europe and Asia/Pacific operation after purchasing Gelco Express International First PC-based automated shipping system
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 1985 RPS (now called FedEx Ground) is founded in Pittsburgh, PA. and

is the first to introduce a bar-code labeling system to the ground transportation industry. 1986 introduction of the SuperTracker, a hand-held bar-code scanner system to input detailed package information. 1990 the first company to win the Malcolm Baldrige National Quality Award in the service category.

 1994

Federal Express officially changes its name to FedEx the first to offer online package status tracking the first global express transportation company to receive worldwide ISO 9001 quality certification ISO 9002 in 2001
1996

RPS (now FedEx Ground) achieves 100% coverage of North America. The first company to allow customers to process package shipments on the Internet with FedEx InterNetShip (renamed FedEx Ship Manager)
2000

The company FDX renamed to companies that include:

with independent operating

FedEx Express
Headquarters: Memphis, TN President and CEO: David J. Bronczek Fleet:

Air: 669 US Hubs :

Anchorage, AK Fort Worth, TX Indianapolis, IN Memphis, TN Newark, NJ Oakland, CA

Ground: 43,000

FedEx Express 664 aircrafts, including:

71 Airbus A300-600s 53 Airbus A310-200/300s 21 ATR 72s 26 ATR 42s 77 Boeing 727-200s 42 Boeing 757-200s 58 Boeing MD10-10s 17 Boeing MD10-30s 59 Boeing MD11s 8 Boeing 777Fs 10 Cessna 208As 242 Cessna 208Bs
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 FedEx Custom Critical

Provides expedited freight services or JIT delivery

Headquarters: Uniontown, OH President and CEO: Virginia C. Albanese Established: 2000 Fleet:

Air: Access to any and all on-demand aircrafts in the world Ground: 1,400 cargo vans, straight trucks and tractor-trailers Service Area: United States, Canada, Mexico; Worldwide by air

FedEx Ground

Headquarters: Pittsburgh, PA President and CEO: David F. Rebholz Established: 2000 Fleet: Ground: 20,000
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 FedEx Freight

Provides large shipments and basic LTL (less-than-truckload) shipping needs.

Headquarters: Memphis, TN President and CEO: Douglas G. Duncan Established: 2001 Fleet: 40,000 Service Area: United States, Canada, Mexico, Caribbean, Central and South America, Puerto Rico, Europe and Asia.

FedEx Trade Networks

Full-service customs brokerage, trade consulting, information technology, E-clearance solutions and transportation and logistics services
President and CEO: G. Edmond Clark Established: February 2000 Service Area: Worldwide from more than 90 locations.
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 Deregulation:
The Air cargo Deregulation Act of 1977 opened the market for carriers

and shippers to freely negotiate rates and provide services. Led to the formation of air express and third-party logistics.
Speed and Reliability in the 70s:
FedEx invented the concept of overnight express delivery The distribution was based on the hub and spoke system where packages

are dropped off at pick-up locations and are then routed to a central distribution center. Delivery on time came about when the industry in the U.S. utilized the JIT and lean manufacturing concepts:
less inventory

Fast-cycle logistics

FedEx set the industry standard in delivery speed and reliability.

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 Customer Service

In addition to the guaranteed on time delivery FedEx provides their customers with:

Several delivery times 10am, 12pm , 4pm Shipment tracking Scheduling and routing Inventory control systems Warehousing expertise

Geographical locations:
Ability to reach all customers
Electronic communications

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 Integrated Supply Chain Management:

FedEx provides JIT transportation and delivery for firms

outsourcing their supply chain FedEx provides customized supply chain services according to the customers operation and needs More experts in the Information Technology (IT) sector not just the physical resources such as trucks and planes FedEx introduced the concept of Virtual Warehousing
Virtual Warehousing: Other supply chain partner have access to databases

and information such as sales and shipment

The use of DemandPull pulled by customers not pushed by suppliers concentration on knowledge of what the customers need and how products can be shipped and packed
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Critical inventory logistics

Services used to manage the distribution and delivery of the firms

critical parts and inventory using FedEx transportation networks (Critical Inventory Logistics) Providing storage, delivery and the efficient return of products, if needed, while balancing services and cost It offers the firms the ability to manage and view their inventory online
How it works?
The central stocking location is at FedEx Corp. and the forward

stocking locations FedEx Kinkos using FedEx Express, FedEx Freight, FedEx Custom Critical, and FedEx Ground Parts are stored at the right place to be delivered at the right time
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 Providing multiple delivery options 24 hours, 8 am, 10 am, same

day service as well as hold in locations Outflow from the manufacturer to the FedEx Corp. then to the customer Reverse flow from the customer to FedEx Corp. then either to the manufacturer or housed as stock Delivery and shipment options are based on time, location and cost

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A study conducted by the Center for Science, Technology, and Economic Development indicated that:

FedEx has a significant impact on businesses in the United States

Inventory carrying cost savings for FedEx clients (domestic shipments):

1993 = 63,822,544 2000 = 268,268,977 USD USD

Total = 1,062,029,887 USD

Inventory carrying cost savings for FedEx clients(international shipments): 1993 = 13,851,731 USD

2000 = 56,912,119
Total = 225,633,010

USD
USD

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 Transportation Modes
Air
669 aircraft

Motor carrier (truck) 43,000

Two services for LTL (Less Than Truckload)

FedEx Freight FedEx National LTL

FedEx Freight and FedEx National LTL offer:

Economical freight solutions. Consistent, on-time reliability. Direct delivery to virtually every ZIP code in the contiguous U.S. State-of-the art information technology with end-to-end shipment visibility. A dedicated team of professionals to assist with all of your freight needs. Freight forwarding capabilities. Equipment for most shipment sizes or types.

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 Transit map comparison of FedEx Freight and FedEx

National LTL

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 For less than truckload (LTL) freight

additional services are:

Call before delivery Hazardous material Inside pickup/delivery Liftgate at pickup/delivery Perishable Residential pickup/delivery Freezable protection Oversize length
required legal contract that verifies that the carrier has received the shipment as described and is obligated to deliver that shipment in good condition to the consignee (person receiving the freight).

Bill of Lading (BOL)

The Bill of Lading (BOL) is a

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 Global Distribution Center (GDC) in Memphis

offers 24/7 - 365 day availability Late night access to FedEx World Hub and location convenient to FedEx Ground and Freight locations Flexible, scalable multi-client facilities 500,000 sq. ft. facility workspace Fully temperature controlled and monitored with a compliant temperature recording system ISO 9001:2000 certified business processes Inventory Administration including visibility of inbound, outbound, and static inventory within DCs and even web access to your data

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 What is Transportation Management? Outsourced management solution Benefits

Enhance customer service - shipments managed to

meet individual distribution requirements Optimize transportation costs - choose optimal overall transportation solution from FedEx companies and core carrier networks to reduce costs Reallocate resources - refocus your time and money on core competencies Improve order/shipment management Increase asset and labor efficiency through effective transportation planning Improve inventory management and production planning

Which services FedEx Transportation Management provides to

customer?

Transportation order acquisition Shipment planning, shipment tendering, shipment monitoring Freight bill audit and pay Visibility via Internet management reporting
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 Why should

I choose FedEx Transportat ion Manageme nt?

Visibility Speed

Flexibility

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 Correct packing is important to protect your shipment from any

trouble during the transportation.

Plan it Prepare it Secure it Ship it

FedEx Packaging Service: Let us Pack It for You

Size and Weight Restrictions
FedEx Freight and FedEx National LTL shipments may be up to

20,000 lbs. and 24 feet in length With FedEx Express U.S. services, you can ship packages up to 150 lbs.; up to 119"in length and 165 in length and girth With FedEx Express international services, you can ship packages up to 150 lbs.; up to 108" in length and 130" in length and girth.
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 Single-Box Packing Method Ship non-fragile products like soft goods

inside a sturdy outer box. Use fillers like crumpled newspaper, loose fill peanuts or air-cellular cushioning material to fill void spaces and prevent movement of goods inside the box during shipping. Place goods that might be affected by dirt, water or wet conditions inside a plastic bag. Use the H taping method for sealing the package

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 Box-in-box Packing Method Restrict product movement inside the

box using filler like crumpled newspaper, loose fill peanuts or other cushioning material Close and tape the inner box using the H taping method. This will help prevent accidental opening Use a second box that is at least 6" longer, wider and deeper than the inner box Ship fragile products individually, wrapping them in a minimum 3" thickness of air-cellular cushioning material such as Bubble Wrap Fill any void spaces with more cushioning material Use the H taping method for sealing the package
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 Proper labeling helps ensure on-time delivery and

complete orders. Labels on the freight should match the bill of lading and clearly show the full name and address of the consignee. The use of brightly colored labels helps identify special requirements such as:

Do Not Break Down Pallet Do Not Double Stack Do Not Forklift Fragile: Handle with Care Fragile: Top Freight Only Keep Upright
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 Impact Tests

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 Compression Test
Compression Load

(pounds) =0.007 x (108

H) x L x W x F Conclude the test when one of these conditions is first detected by the compression tester:
The stop force. The yield detection

percentage. The stop deflection.

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 Vibration Test
FedEx distribution

environments
Truck vibration at 0.52 Grms

(root mean square) Air vibration at 1.06 Grms Repeat truck vibration at 0.52 Grms

Rotary Vibration Test Packages will be subjected to a total of 14,200 vibratory impacts
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 Dangerous goods:
Aerosol sprays airbags, ammunition, butane, car batteries, cologne,

dry ice, fireworks, gasoline, jet fuel, lighters, lithium batteries, matches, nail polish, nail polish remover, nitrogen-refrigerated liquid, paint, perfume, solvents, some chemicals, and more

Normally dangerous materials are surcharged. However, some of

them are do not surcharged.

Dangerous goods in Excepted Quantities (IATA 2.7); excepted

package radioactive materials (IATA 10.5.8); Biological Substance, and shipments containing primary (non-rechargeable) lithium batteries and cells that are prepared under IATA Section II of Packing Instruction 968

Some items may not be regulated as dangerous goods if they

Dry ice
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travel by ground, but are regulated by IATA if they are offered for transportation via FedEx Express services

 Integral part of business

You can focus on your business, while we deliver the

returns expertise A fast, easy returns process is that key differentiator Return service examples:

Merchandise return Lab sample Something for warranty or repair Documents need to be signed

Helps reducing inventory carrying costs Offers visibility of every step

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 New Warehouse Management System (WMS)

Newest bar-code Radio Frequency

Benefits
View real-time inventory status at each individual

warehouse location or total at all locations. Search by Part number or Lot number. Track Orders out of each warehouse by Order Number, Ship to or Date. Review Audit History to see chronological record of incoming and outgoing products. Print or download query results to a spreadsheet.
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 The FedEx Freight

and FedEx National LTL Rating Program (FXF 1000 & FXNL 501 base rates) Obtain rate quotes even when you are not connected to internet. Just offer quotes for US, Canada and Hawaii.

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 The first to install computers in delivery vehicles, providing sophisticated automation for

corporate mailing services and developing tracking capabilities and software. to offer package-status tracking for improved customer service via fedex.com [94] to offer shipping for improved customer service and convenience via fedex.com to use of wireless technology for shipping over 25 years ago with the introduction of the Digital Assisted Dispatch System (DADS).
DADS is a two-way data communication system used by the couriers and central dispatch

center to communicate daily on the pick-up and delivery job orders.

The FedEx Institute of Technology at the University of Memphis FedEx Innovation Labs

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 SenseAware TM

A web-based information platform that transmits sensitive information about

the shipment via a sensing device placed in the package. Approved by the FAA as well. Targeted for a 2010 release to select life sciences companies that are shipping within the U.S. SenseAware gives the customer the immediate information and automated tools he needs to respond instantly to unexpected conditions. With SenseAware, the customer can make smarter decisions and coordinate rapidly with the supply chain partners. Exposure to light, humidity, air. Exact location at the exact time.
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 Environment
Fuel Sense Program Collaboration with IATA in educating 30 program teams to assess the overall fuel consumption and searching ways to reduce it. Replacing 90 narrow-body B727 with B757 that lessen the environmental impact reducing fuel consumption up to % 36 while providing % 20 more capacity. Acquisition of 11 B777 that will provide greater payload capacity using % 18 less fuel than planes in current international fleet. Wide-Body planes with Flight Management System use continuous approach descent, which keeps the plane in idle during the descent, reducing engine thrust and fuel.
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 Environment
By the end of 2009, FedEx Express was operating a total of 325 hybrid

electric and electric vehicles and more than 1,800 alternative fuel vehicles and equipment around the world. Trucks are built by Eaton Corp., Isuzu, Azure Dynamics and Iveco. FedEx is the only transportation company to publicly call for fuel efficiency standards for commercial medium and heavy-duty truck classes.

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 Environment
Alternative Energy Several Rooftop Solar Energy Powered Hubs
Woodbridge, NJ Oakland, CA Cologne Bonn Airport, Germany

In Geneva, the FedEx station uses a system of pipes running deep

into the ground to warm the buildings air in the winter and cool it in the summer. FedEx Packaging Lab
FedEx 10kg and 25kg boxes contain a minimum of 70 percent recycled

content and are recyclable. Most FedEx envelopes are made from 100 percent recycled content and are recyclable.
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 Community
Noise All FedEx Express aircraft meet all federal noise certification standards and comply with FAA Stage 3 noise requirements. In 1990, FedEx, working with Pratt & Whitney and Boeing, developed a proprietary noise reduction kit (also known as a "hush kit") for Boeing 727s. FedEx has taken steps to reduce the use of auxiliary power units when the planes are on the tarmac. This effort has helped drastically to reduce fuel use and noise levels.

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 Community
Special Delivery Program Supports local organizations by donating transportation services and manpower to help them fulfill their missions.
Volunteerism Team members volunteer hundreds of thousands of hours each year to make our local communities better places to live, work and play. Sports FedEx Cup Joe Gibbs Racing
# 11
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 Philanthropy
Relief Support Heart to Heart International Direct Relief International Water Missions International Salvation Army Disaster Response Services
American Red Cross

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 Asia Pacific Region Launched as FedEx Asia One Network in 1995. Headquarters: Hong Kong, China Main Hubs: Subic Bay, Philippines; Guangzhou, China 30+ countries ; 20+ airports European Region Launched as FedEx EuroOne Network in 80s Headquarters: Brussels, Belgium Main Hubs: Paris, France; Stansted, UK; Frankfurt & Cologne, Germany 85+ countries ; 35+ airports Middle East India African Region Commenced in 98 as a branch of FedEx Express Headquarters & Main Hub: Dubai, U.A.E. 70+ countries ; 4+ airports

Latin America Caribbean Region Headquarters & Main Hub: Miami, FL 50+ countries ; 20+ airports

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 Website [http://www.fedex.com/us/]

Citizenship Blog
Social Networks [Facebook, Twitter, LinkedIn etc.]

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 Major Competitors
United Parcel Service (UPS) Deutsche Post (DHL) Thomas Nationwide Transport (TNT)

Financial Aspects

Plant, Equipment, and Other Properties Total Liabilities & Equity Total Assets Total Revenue

Who is focusing on which strategy? Who is taking more risks? Who are utilizing their assets more efficiently?
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20,000,000 18,000,000

Property, Equipment & Plant

FedEx United Parcel DHL TNT

16,000,000
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2010 2009 2008 2007 2006

** amounts in thousands (USD)

2005

2004

2003

2002

2001

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60,000,000

50,000,000

Total Liabilities & Equity

FedEx United Parcel TNT DHL

40,000,000

30,000,000

** amounts in thousands (USD)

20,000,000

10,000,000

0 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

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14,000,000

Total Current Assets

FedEx United Parcel TNT DHL

12,000,000
10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

** amounts in thousands (USD)

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100,000,000 90,000,000 80,000,000

Revenue
FedEx United Parcel DHL TNT

70,000,000
60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000

** amounts in thousands (USD)

0
2010 2009 2008 2007 2006 2005 2004 2003 2002 2001

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 FedEx & UPS are intending to purchase their own facilities

and equipment instead of leasing. DHL is focusing on the idea of increasing liabilities by utilizing more leased assets (Aircraft, Equipment, Warehouses, etc.). DHL has a more adventurous strategy than FedEx and UPS.
Increasing Liabilities, therefore utilizing more assets Increasing risks inevitably (economic downfall affects DHL

more than FedEx & UPS)

DHLs strategy of taking more risks benefits more in

Revenue. FedEx & UPS have a more safe approach, which provides more protection against fluctuations.
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Center for Science, Technology, and Economic Development. (2010). Fedex and key industry drivers. Retrieved from SRI International website: http://www.sri.com/policy/csted/reports/economics/fedex/chapter1.pdf Center for Science, Technology, and Economic Development. (2010). Business impact: Beyond Business as usual. Retrieved from SRI International website: http://www.sri.com/policy/csted/reports/economics/fedex/chapter1.pdf FedEx. (2010). About FedEx. Retrieved November/23, 2010, from http://about.fedex.designcdt.com/ FedEx. (2010). Bill of Lading Online. Retrieved November/19, 2010, from http://www.fedex.com/us/smallbusiness/updates/june2010/bill-of-lading-online.html FedEx. (2010). Corporate Responsibility. Retrieved November/23, 2010, from http://about.fedex.designcdt.com/corporate_responsibility FedEx. (2010). FedEx Distribution. Retrieved November/19, 2010, from http://www.fedex.com/us/smartpost/network/ FedEx. (2010). FedEx Help Hub. Retrieved November/19, 2010, from http://mediacenter.fedex.designcdt.com/node/425 FedEx. (2010). FedEx Innovation. Retrieved November/23, 2010, from http://about.fedex.designcdt.com/our_company/fedex_innovation FedEx. (2010). FedEx National LTL. Retrieved November/19, 2010, from http://www.fedex.com/us/services/freight/national/longhaul.html FedEx. (2010). FedEx Rate Tools. Retrieved November/19, 2010, from http://www.fedex.com/ratetools/RateToolsMain.do FedEx. (2010). FedEx Return Solutions. Retrieved November/19, 2010, from http://www.fedex.com/us/returnsolutions/index.html FedEx. (2010). FedEx Service Guide. Retrieved November/19, 2010, from http://www.fedex.com/us/services/fuelsurcharge.html

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FedEx. (2010). FedEx Services. Retrieved November/19, 2010, from http://www.fedex.com/us/services/options/ FedEx. (2010). Packaging Tips. Retrieved November/19, 2010, from http://www.fedex.com/us/smallbusiness/updates/may2010/packaging-tips.html FedEx. (2010). Regional Facts. Retrieved November/23, 2010, from http://about.fedex.designcdt.com/our_company/company_information/regional_facts FedEx. (2010). Transportation Logistics Management. Retrieved November/19, 2010, from http://www.fedex.com/us/supplychain/services/tms/ FedEx. (2010). Transportation Management. Retrieved November/19, 2010, from http://fedex.com/us/customersupport/supplychain/faq/tms.html FedEx Introduces SenseAware, the Next Generation Supply Chain Information Platform. (17 November). Business Wire. Retrieved October 17, 2010, from ProQuest Newsstand. (Document ID: 1902232291). FedEx Corporation. (2010). FedEx express. Retrieved from http://about.fedex.designcdt.com/our_company/company_information/fedex_express FedEx Corporation. (2010). Family of companies. Retrieved from http://www.fedex.com/ca_english/about/overview/companies/index.html?link=4 FedEx Corporation. (2010). Critical inventory logistics. Retrieved from http://www.fedex.com/us/supplychain/services/cil/ FedEx Corporation. (2010). Decades of innovation. Retrieved from http://images.fedex.com/ca_english/about/pdf/ca_english_about_decades_innovation.pdf Ra0, R., Navoth, Z., Waebker, R., Horwithc, M. (1998, April) The FDX group: Building the electronic commerce backbone for the future. Institute for Technology and Enterprise, New York, NY. Retrieved from http://marketing.byu.edu/htmlpages/courses/490r/chapters/chapter7/chapter7.html#backg SenseAware. (2010). SenseAware Shipment Conditions Monitoring. Retrieved November/23, 2010, from http://www.senseaware.com/?overview The Airline Monitor. (October, 2010). Ten Year Traffic, Fleet and Financial Data for 88 Leading Airlines of the World. 23(5). Author

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