Primer on FedEx's Distribution Network
6 hours ago
- #Express Delivery
- #FedEx
- #Logistics
- FedEx was founded in 1971 as an express delivery service with the motto 'When it absolutely, positively has to be there overnight.'
- The Federal Aviation Act of 1977 allowed FedEx to expand its fleet with larger aircraft, leading to the establishment of its superhub in Memphis in 1979.
- FedEx operates the largest cargo airline in the world, with 741 aircraft serving over 650 airports and shipping 16 million packages daily.
- FedEx Express generates 55-60% of the company's revenue, focusing on speed and efficiency with a hub-and-spoke system centered around major hubs like Memphis and Indianapolis.
- FedEx Ground, founded in 1985 as Roadway Package System, was rebranded in 2000 and operates with a similar hub-and-spoke structure but uses independent contractors for deliveries.
- FedEx Freight handles shipments over 150 lbs with a high operating margin (20-22%) and is being spun off into its own company as part of Network 2.0.
- FedEx Supply Chain provides logistical services with over 40 million square feet of warehouse space, though it's a small part of the overall operation.
- Network 2.0 aims to integrate FedEx's previously independent operations, reducing the number of facilities from 1200 to 1000 and improving efficiency.