FedEx Ground is broken down into two categories: FedEx Home Delivery, operating in the United States, specializes in residential delivery Tuesday through Saturday, offering delivery options to provide more flexibility for residential recipients (to make up the difference, FedEx Ground in Canada performs the business deliveries and residential deliveries) and FedEx SmartPost, which consolidates parcels from merchants such as e-commerce and catalogue companies and uses the United States Postal Service for the final delivery.
In March, FedEx announced the addition of SmartPost International, shipping parcels from the United States into Canada with a comprehensive cross-border solution through integration with Canada Post’s Border free services. FedEx Ground has experienced steady growth, due to its low cost operations, information systems investments and efficient delivery network.
They were able to overcome the worldwide recession with their non-unionized environment and contracted-out drivers, which kept their overhead costs lower than its competitors, as well as new distribution facilities enabling the company to increase they daily sorting and delivery of parcels in North America. The company’s competitive advantage lies on their cutting edge technology, large distribution capacity facilities and low cost value chain. FedEx Ground’s major competitors in Canada are UPS, DHL, Purolator and Canada Post.
Although FedEx Ground is a very successful arm of FedEx in North America, it is recommended that they implement their business model in other parts of the world and expand internationally. A gradual expansion into key markets will give the company the ability to transfer their key success factors into new markets and take market share away from local competitors. Company History FedEx Ground formerly known as RPS (Roadway Package Systems) joined the FedEx Corporation in March of 2000. FedEx Corp was in need of growing their corporation by providing more services requested by their customers.
FedEx Ground would then introduce the low-cost provider service in the small packaging sector (small packaging is determined by the quantity of packages being shipped). FedEx Ground currently only operates in North American (America, Canada and Puerto Rico) considering their method of transportation is via tractor trailers and trucks. They can operate as a low-cost provider due to their effective chain management and their lean operating costs; FedEx Ground has always and will always use tight budgets. The conversion from RSP to FedEx Ground proved to be successful with the transfer of their strong FedEx culture and moral values.
FedEx Grounds headquarters is located in Pittsburgh, Pennsylvania under the CEO and President David Rebholz. FedEx Ground has annual revenue of 6 Billion dollars and a workforce of 70,000 including a ground fleet of 20,000. FedEx Ground has also surpassed FedEx Express by shipping an average of 3 Million Packages per day. Some items that are considered to differentiate them from competitors would be; people, customer service, technology and owner operators as contractors. In having owner operators (Entrepreneurs) as drivers, they provide more incentive and drive concern from contractors to make FedEx Ground successful.
Over the years FedEx has spend resources on continuous improvement in all aspects of their business, including the knowledge , skills, abilities and other attributes of their employees. FedEx Ground sends all management staff to FedEx University in Pittsburgh to enhance their knowledge on things such as operations, team building, and many other specialized areas. They also have FedEx University and skill soft via the company intranet, which is accessible to all employees. With these and many other methods they have continuously enhance one of their most important assets, their people.
With their talented staff they all follow one slogan which is called the Purple Promise, “I will make every FedEx Experience Outstanding” this saying is used within all FedEx interactions among co-workers and customers alike. FedEx has been awarded many prestigious awards from many companies such as Fortune 500; top 100 companies to work, Best in Diversity, CEO of the Year and many more. One of the major challenges FedEx Ground has faced would be the economic recession which all companies have been effected by. FedEx analyst actually were somewhat prepared for this type of situation should it ever occur.
FedEx started with eliminating any unnecessary costs such as company cars and minimizing expenses in June 2008 (very proactive, prior to the large hit). When the official Recession hit, FedEx did not hesitate to accurately adjust to these hard times, the following steps were taken; slim budgets where cut to almost nothing, cancelled employees kick-off saving 1 million dollars, not advertising in the super bowl, all US Management and above took a pay/bonus cut (CEO/ Directors 15%, executive 7% and management 5%).
However, considering all of these effective cuts they continued to grow their company facilities and locations throughout North America. Secondly, the shift in the economy also pushed Express overnight customers into the low-cost provider sector to save their own money, increase Ground. Due to all of these items FedEx Ground actually made more money this year than the last and has shown great stability. FedEx Ground has grown and developed since 2000 and now directly competes with a much older ground services such as UPS (who is now filing for bail-out) in America.
FedEx Ground currently is facing some pressure in America with the railway act which would make it very easy for the teamsters (unions) to gain access to unionizing all the FedEx Corp’s employees, which currently none are unionized. FedEx Philosophy FedEx attributes their success to their people-first philosophy, they believe in putting their people first, profit will follow after; People-Service-Profits. Mission Statement FedEx Ground will be the best small-package company serving business and residential customers in North America.