Federal Express Essay, Research Paper

Since 1971, time sensitive packages and letters have been delivered safely and punctually to anyone, anywhere in the world. Often times, the contents of these packages contain life saving materials. The company that makes efficient delivery possible is Federal Express. FedEx s guaranteed overnight delivery, or your money back offer, makes it a unique and highly trusted company. Many aspects go into making this company work like a well-oiled machine; including packaging, the variety of modes of transporting, and the ability to track the where abouts of the package from any place in the world. With these attributes nearly perfected, FedEx has truly “made the world small” (Kinney, 6-10).

From its relatively humble beginnings in 1971, to its current world dominance; what makes FedEx such a well-oiled machine?

HISTORY

This year marks the 28th anniversary of the founding of Federal Express. These have been 28 remarkable years that have transformed the way the world does business. From their early Falcon flying days operating in a few U.S. cities, to the global express powerhouse they are today, they have remained dedicated and committed to providing their customers the best possible service possible. FedEx began operating in 1971, and is now the world’s largest express transportation company. The founder of this company is Fred Smith, currently the President and CEO of FedEx. FedEx was founded with the goal to move packages. Fred Smith s idea was different, his new company had an amazingly fresh concept – to devote a fleet of jets to overnight delivery. Smith came from a long line of transportation entrepreneurs and learned to fly at the young age of 15. In 1969, he purchased Arkansas Aviation with the goal of doing something more than merely selling aircraft, as had been the business s sole purpose in the past. As a political science and economics major at Yale, Smith had done extensive research on challenges facing pioneering firms in the information-technology industry. Through his research he determined that reliability and speed had never been strengths of cargo services, as they were typically sent on passenger planes on daytime flights, making next day deliver nearly impossible. Also, shipment outside of large cities required many transfers or was simply not available (Kinney, 47). Smith decided that Federal Express could streamline operations by shipping all packages to a central point for sorting and then reloading onto planes. After this was accomplished, the packages would then be flown to their destination. Smith discovered this style of shipping by observing how the banking industry collected canceled checks at sorting locations and then distributed them to individual banks (Kinney, 54). In 1971, Fred Smith incorporated Federal Express and went in search of investors. He was just 27 years old. Many of the people he approached with his new idea thought his plan was impossible and questioned the need for this type of service. Smith ended up putting up $4 million of his own money and, with the aid of investors, who eventually added an additional $80 million, began Federal Express (Kinney, 55). In the beginning, FedEx had twelve cities in the East and Midwest as delivery sites, and a small sales staff, who labored to establish accounts in those places. A small fleet of Dassault Falcons awaited the packages, with couriers ready to pick up and deliver them in cars and vans. In 1973, Fed Ex had grown to include 389 employees, 25 U.S. cities, and their fleet had grown to 14 Falcons. Today, FedEx s headquarters are world wide, with locations in Tennessee, Asia, Canada, Brussels, Belgium, and Latin America. These headquarters employ more than 145,000 people worldwide, and serve 210 countries with the aid of 625 aircraft flying in and out of 366 airports. However, none of this would be possible without the aid of the approximate 1,400 world service centers and over 2,400 FedEx ship sites around the globe (FedEx Service Guide, 3-7). An incredible volume of packages are shipped each day. The average package volume is more than 3.2 million daily, weighing approximately 20.6 million pounds overall. The average call volume exceeds 500,000 calls per day with the approximate number of electronic shipments being 63 million. The distance driven per day equals more than 2.7 million miles within the United States alone (www.fedex.com/us/, 4-22-99). These statistics show the immense impact FedEx has on both the business and domestic factions of society.

PACKING

When packing an item for shipment via FedEx, the packer has many considerations to take into account in order to ensure that the item being shipped will arrive undamaged at the final destination. The ShipSite (www.fedex.com, 5-19-99) packer must consider the item’s size and weight, using a scale and a measuring tape to obtain exact dimensions. After weighing and measuring, the packer must then select the appropriate FedEx shipping container to accommodate the item. One rule is that there must be at least four inches of packing materials around the item.

When packing fragile items, such as china or glass items, it is necessary for the packer to use bubble wrap in order to safely contain it. When shipping a picture, it is necessary to use glass mask. Glass mask is a type of cellophane that holds the glass together if it is broken, which prevents damage to the picture in the event of breakage. After packing the picture in the glass mask, packing peanuts must be added, filling the box past the top and squishing down to make sure that none of the peanuts shift and allow for breakage (Picture Packing Guidelines, 9). Duane Beaver, owner of MailPlus an authorized FedEx shipping agent says, “If the parcel can be lifted above your head and dropped on a cement floor without breaking, it’s packed correctly” (Beaver, 4-26-99). This generally makes people uneasy, but it could mean the difference between their parcel arriving to its destination in its original condition, or arriving in a damaged state due to negligence.

FedEx also offers numerous packaging options which are designed to carry a wide range of items safely to their destinations. These packages include the FedEx Letter, which is used for shipping documents not weighing more than eight ounces; the FedEx Pak, used to ship heavier documents; three sizes of FedEx Boxes, ranging from small to large; the FedEx Tube is designed for any roll up items, such as posters, photos, and blueprints; and stronger weight boxes that are designed for international shipments (www.fedex.com, 5-19-99).

SHIPPING

Shipping international freight is rather complicated, requiring the use of the FedEx International Air Waybill. The International Air Waybill is a record of the shipping transaction between FedEx and the shipper and serves as a tracking and billing document. This document is required by customs authorities in order make sure the shipment is legitimate, safe, and legal to enter the country. It is used for shipments outside the US (International Air Waybill). Along with the International Air Waybill, five copies of the Customs form are required when shipping items other than documents (International Tipsheet, 2). A Customs form gives a brief description of the items contained in the package, their value, and the reason for shipping.

Other documents may be required, depending on the destination country. These documents include: Commercial Invoice, Consular Fees, Import License, Insurance Certificate, Packing List, Preshipment Inspection, Pro-Forma Invoice, and Sanitary Certificates. These additional forms provide a much more detailed description of what is being shipped. This makes it possible for the receiving country to make certain that they are not taking in anything illegal, such as narcotics, or anything that may threaten national well-being. Another possible hazard in the relation to the country s welfare may be crop destroying insects or disease, which could reek havoc on the nation s economy.

Paper notification must be made when shipping hazardous materials. Items such as perfume, hairspray, gasoline, oil, and alcoholic beverages may not be shipped because of on flight danger of explosion. When these items are compacted into the cargo hold of a jet the they become pressurized and susceptible to explosion. Therefore, a shipper caught sending items such as these can expect large fines exceeding $200,000 and most likely a lengthy jail sentence.

One of the outstanding qualities of FedEx is their commitment to human life. FedEx maintains an alliance with the American Red Cross, combining the effectiveness of FedEx s overnight delivery with the Red Cross strength in emergency relief. FedEx holds world acclaim for their role in shipping vital life saving materials, such as organs for transplant recipients (Kinney, 33).

In fact, Nancy Lacy, a FedEX customer service agent in Texas stated, “Every package has a story behind it, it might be someone s payment on the mortgage or something life-saving.” While working in West Texas, Lacy witnessed this immeasurable power in a very dramatic way; FedEx delivered the drill that allowed workers to free Baby Jessica from a well in Midland in 1987. Employees of FedEx felt an indescribable pride that day, a pride that runs deep in all levels of the company (Kinney, 130).

On a lighter note, FedEx also kept the Rolling Stones rolling during their Voodoo Lounge Tour in 1995. The Stones made 120 stops across six continents with FedEx transporting all the production materials for the show. This included 300 tons of fragile sound and lighting equipment (Kinney, 133).

INSURANCE

Often times, customers are shipping family heirlooms or other items of great value. Due to this, there is a vital need to insure the items which are being shipped. This, is in case the packages are damaged or lost during transport.

Packages shipped via FedEx are automatically insured for up to $100 for content damage coverage. Additional insurance may be purchased at 35 cents per $100. The FedEx Letter and the FedEx Pak have a maximum insurance value of $500 (International Document Assistance, 4). When shipping larger items, the shipper has the option of purchasing additional insurance. When shipping checks, FedEx only insures the replacement cost of the check, not the dollars amount the check was issued for.

This provisional insurance clause is one of the many reasons that FedEx is the worlds number one overnight delivery service (Exclusivity Clauses Protect Your Interests, 11).

SERVICES

FedEx offers numerous domestic services, allowing customers to get their packages delivered at the least amount of cost, in the least amount of time. These domestic services such as FedEx Priority Overnight, which is delivered by 10:00 a.m. the next business day to most US cities and by 4:30 p.m. to remote areas. FedEx Standard Overnight offers the shipper guaranteed delivery by 3:00 p.m. the next business day. FedEx 2Day delivers in two business days by 4:30 p.m. to businesses and by 7:00 p.m. to residences. FedEx Express Saver delivers within three business days within the continental US, by 4:30 p.m. to businesses and by 7:00 p.m. to residences. FedEx Overnight guarantees delivery by 8:00 a.m. The last option available by FedEx is FedEx SameDay, which is available seven days a week (An Overview Of FedEx Services, 2).

ADVERTISING

Advertising for FedEx is done over the television network, the internet at www.fedex.com, in telephone directories, on their vehicles, and on their shipping containers and supplies. They also advertise through FedEx authorized ship companies located throughout the world. FedEx provides these companies with advertising items such as banners, toy airplanes, and neon signs. Although these methods of advertising are highly productive, the one method that speaks loudest and in all languages is FedEx s unprecedented customer service.

DROP-OFF SITES

One crucial aspect which allows FedEx to run so smoothly, and to service so many people, are their conveniently located drop-off sites. There is in excess of 43,000 drop-off sites, including FedEx Drop Boxes and full service locations. Many of these drop-off stations offer later pickup times than most shipping companies. This makes shipping much more convenient for those customers with a tight schedule, allowing them flexibility, beyond regular business hours. FedEx World Service Centers are typically located in high traffic business areas and near airports. These locations offer full service shipping and expert advice on international shipping. FedEx ShipSites are located inside companies such as Kinko s, Staples, and OfficeMax store and provide in store drop off areas and shipping supplies. There are over 5,000 FedEx Authorized ShipCenters located in retail locations. These centers provide full access to FedEx services and packing. One local business that offers this service is MailPlus, located in Chehalis, Washington. FedEx Drop Boxes are found in office buildings, shopping malls, airports, and on some street corners. These drop boxes are convenient and easy to use with simple to follow instructions and shipping supplies. FedEx offers two ways of finding out the location of the drop off box nearest you. To obtain this information you can search the World Wide Web at www.fedex.com or by calling 1-800-GO-FEDEX (www.fedex.com, 5-19-99).

SITE BASED RESEARCH

My site based research was completed through MailPlus, a local FedEx Authorized ShipCenter, in Chehalis, Washington. The owner, Duane Beaver and his wife Mollie, demonstrated to me all aspects of FedEx shipping. This included the use of the FedEx Ship Computer, a separate computer at the store, which is used only for FedEx shipping. The FedEx Ship Program is the company s standard computerized shipping database. This software allows the shipper to type in consignee s information, the service level that is needed, the weight and dimensions of the parcel, and whether or not it needs to be signed for upon receipt. This program dials in to Federal Express and transfers the information about the shipment to them and receives back a unique tracking number.

I also communicated with FedEx drivers for exchange of information, picking up supplies, and dropping off shipments. I learned how to accurately describe the difference between the shipping services to customers and take care of their shipping needs. I gained knowledge in how to package and ship items ranging from as small as hearing aids and as fragile as emu eggs, to horse semen containers and items as time sensitive as human blood.

In packaging blood, it is mandatory that it be packed in an absorbent material such as foam rubber, which is then placed in a water tight container, such as a zip lock bag. If the blood is in a vial, it is normally packaged in a Styrofoam container or box and then placed in a lab pouch that states “biohazard” on it. These precautions help to prevent the spread of sickness or disease, due to spilled or broken vials of blood. They also help to ensure that the blood is not poisoned or tainted during shipment, due to exposure.

Horse semen is secured in a special receptacle, called a “semen container,” which resembles a large thermos bottle. This container is made out of aluminum and is specially designed with secured holders for the vials so they don t rattle around and get broken; it also has an unbreakable seal to prevent seepage. Because it is insulated, this container maintains temperature control, keeping the semen cold. This keeps the semen safe during shipment, so that it arrives at its destination undamaged and is still useful to the recipient (Beaver, 5-12-99).

In conclusion, when looking at FedEx s door-to-door service and money back guarantee, along with the company s unmatched air route, it is clear to see why it is the world s largest express transportation company. Day in and day out, the FedEx team brings the world together by providing valuable services that alleviate time and distance. In 28 short years, FedEx has become one of the world s leaders in this business, standing for reliability, speed, and ultimate customer service. In the future, moving products and information in fast, time certain style will not just be one approach to doing business – it will be the only way of doing business. However, with every parcel delivered by FedEx personnel, the world becomes a smaller place (FedEx Global Updates, 2).