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FedEx set to consolidate delivery units in $4bn cost saving move


FedEx plans to unify its Express, Ground, Services, and other operating companies into one company by 2024, as it looks to cut costs and keep up with competition including Amazon and UPS.

During an investor event on Wednesday [05 April], FedEx announced the creation of a fully integrated air-ground network under the respected FedEx brand. FedEx said this move will create efficiencies that will enhance the company’s ability to meet the evolving needs of customers and ultimately build a stronger, more profitable enterprise – saving $4bn.

Raj Subramaniam will serve as president and CEO of the combined organisation. He said: “Over the last 50 years, we built networks that have created a differentiated and unmatched portfolio of services.

“This organisational evolution reflects how we represent ourselves in the marketplace – focused on flexibility, efficiency, and intelligence. As one FedEx team, we are well positioned to execute on our mission to help customers compete and win with the world’s smartest logistics network.”

The multi-year plan is designed to improve the efficiency with which FedEx picks up, transports, and delivers packages in the US and Canada. FedEx added that the unified organisation will bring distinct focus on the air network and international volume, as well as a more holistic approach to operations on the ground utilising both FedEx employees and contracted service providers.

“We are building a simplified experience for our customers, who are at the centre of everything we do, so they can adapt to the market,” continued Subramaniam. “This combination will allow us to provide customers with even greater value, offering the most advanced data-driven insights to help them make smarter decisions for their business.”

From 16 April 2023, John A. Smith will become President and CEO of US and Canada Ground Operations at FedEx Express and assume leadership of surface operations across the FedEx Express, FedEx Ground, and FedEx Freight businesses. Richard W. Smith will serve as President and CEO, Airline and International at FedEx Express, overseeing all other regions and FedEx Logistics. During the transition period leading up to June 2024, there will be no change in financial reporting segments.

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