FEDERAL EXPRESS INDIA
Background
Federal Express (FedEx) is the world’s largest express transportation company, with a presence in nearly 215 countries and covering 365 airports. It employs over 136,000 employees and operates more than 645 aircraft. FedEx was established in 1973 and is headquartered at Memphis, USA. The company differentiates itself through highly reliable, value-added services like guaranteed customs-cleared, 48-hour delivery for international consignments. Federal Express started operations in India in 1997, and currently operates ten flights a week from Mumbai to Europe and Asia. FedEx has an operations agreement with Prakash Airfreight Pvt. Ltd., which provides all pick-up, and delivery services within India. It also has an agreement with Jeena & Co. for providing nationwide customs broker capability. FedEx now services from eight centrers as against four centres earlier and has branch offices in Kolkata, Ahmedabad, Hyderabad and Coimbatore, in addition to the current operating locations in Delhi, Mumbai, Bangalore and Chennai. FedEx has also increased customs clearance capabilities from one gateway (inbound) to eight gateways (inbound as well as outbound). Also, FedEx clearance for high value goods is available from Mumbai, Delhi, Chennai, Bangalore, Coimbatore, Cochin and Kolkata. While FedEx Global Trade Manager (GTM) provides online consultancy on customs paperwork for small and medium enterprises, FedEx InSight™ is a webenabled application that automatically tracks customer’s incoming, outgoing as well as third party payer shipments, without the need of entering individual tracking numbers for each package. FedEx has also launched G-tracker, a hand-held PC that enables couriers to advise customers on countryspecific documentation requirements and provides information on service availability by country, postal code or city name in real time. Through its focus on IT solutions, the company has been able to offer several innovative services like Global Trade Manager, FedEx InSight™ and tracking systems. According to Jacques Creeten, “Information and technology have always been central to the FedEx business strategies. Continued technological innovation and capabilities of a virtual network are vital in bringing FedEx closer to our customers and helping to manage the daily logistics of their business.”
Leveraging India for software development
The company is also leveraging India’s software development potential, to develop solutions. It has an 11 member IT development team in India that it plans to merge with its help-desk team in Dubai. Besides, the company has agreements with various software vendors including Bangalore based software solutions provider Mphasis, where there are nearly 300 professionals developing software for it.
Commitment to manpower development
A key factor that sets FedEx apart from its competitors is the commitment and motivation of its employees. FedEx believes in supporting the individual ambitions of its employees and allowing them to grow in the direction of their own choice. The company’s ‘People - Service - Profit’ (PSP) policy lets every employee know upfront what his performance objectives are and also what he can earn. The company has established a fairly laborious performance management and compensation system to actualise this. FedEx’s ‘Guaranteed Fair Treatment’ process for grievance-redressal allows employees to take up disputes with immediate managers or with the head of the company if need be. Employees are encouraged to identify their weaknesses through a personal development programme (PDP). FedEx has an online training library with over 600 courses on subjects such as leadership, project management skills, presentation skills etc. Employees can log in and take any course, but need to pass. FedEx also provides each employee US$ 3,000 per annum as education reimbursement allowance, regardless of seniority. FedEx’s commitment to employee development is reflected in the fact that nearly 40 per cent of the company’s total expenditure in India is devoted to employee development. According to Mr. Creeten, “We don’t have a secret. You’ll find these things in every textbook. The biggie is that we actually do what’s in the books.”
Future plans
• The company is planning to expand its network in India as it is reaching capacity. • It is also heavily focusing on outbound cargo, as exports from India are growing at the rate of 22 per cent.
Strong growth
While the financial performance figures for FedEx India are not available, according to Jacques Creeten, MD for FedEx in India, the company has grown nearly 500 per cent since it started operations in 1997.
Factors for success Global reach
With a presence in over 215 countries and with a large fleet of owned aircraft, FedEx has a global reach that enables it to provide guaranteed delivery in the shortest possible time. The company has a strong presence in Asia as well, with Express Distribution Centres (EDCs) in 11 countries: five in Japan, four in South Korea, two each in Singapore, China and Australia, and one each in Hong Kong, Taiwan, Thailand, Indonesia, the Philippines and New Zealand. Using its own aircraft and crew, and combined with well-developed logistics facilities in Asia, FedEx is able to provide extensive intra-Asia overnight delivery.
Federal Express India: AT A GLANCE • Federal Express: World’s largest transportation company. 215 countries. 365 airports. 136,000 employees. 645 aircraft • Federal Express India: 10 flights. Partnering Indian firms for operations and customs broker capabilities. 8 centres. Customs clearance capabilities at 8 gateways • Continually expanding range of services. Has grown 500 per cent since commencement of Indian operations • Factors for success: Global reach. Leveraging technology. Commitment to manpower development • For FedEx, India is: Software development source • Future plans, India: Expand network in India. Focus on outbound cargo
Expanding range of services
FedEx has developed a wide range of services, some of them customised for specific sectors in India. For example, the company has developed products like customised packaging options for the fashion industry and on-line documentation support for fast-growing and export-oriented industries in India including automobiles, pharmaceuticals, leather, heavy engineering and gems and jewellery. These clients are also provided enhanced connections to the FedEx international network plus international forecasts of their own industries. It has launched its technology solutions, such as FedEx Global Trade Manager and FedEx InSight™, in India as part of its global technology leadership strategy.
Leveraging technology
FedEx is actively involved in developing IT solutions and leverages IT as a competitive advantage. According to Eric Keane, VP and CIO-IT, EMEA, the company invests around US$ 1.3 billion annually for technology development alone, and employs around 5000 people for technology development and tech support in the Europe Middle East and Africa region.
US COMPANIES IN INDIA