FedEx is consolidating its operating companies


FedEx announced at its DRIVE Investor Event that it would consolidate its operating companies into one organisation, creating efficiencies that will enhance its ability to meet customers’ evolving needs and ultimately build a stronger, more profitable enterprise.

With full implementation expected in June 2024, this phased transition will ultimately bring FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies into Federal Express Corporation, becoming a single company operating a unified, fully integrated air-ground network under the respected FedEx brand.

FedEx Freight will continue to provide less-than-truckload freight transportation services as a stand-alone company under Federal Express Corporation. Raj Subramaniam will serve as President and CEO of the combined organisation.

“Over the last 50 years, we built networks that have created a differentiated and unmatched portfolio of services,” said Raj Subramaniam, president and CEO of FedEx Corporation. “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.”

This new structure will help facilitate the company’s DRIVE transformation, including Network 2.0, the multi-year effort to improve the efficiency with which FedEx picks up, transports, and delivers packages in the U.S. and Canada.

In addition, the unified organisation will bring a distinct focus on the air network and international volume and 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 center 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.”

To aid in this smooth transition, effective April 16, 2023, John A. Smith will become President and CEO of U.S. and Canada Ground Operations at FedEx Express and assume leadership of surface operations across the FedEx Express, FedEx Ground, and FedEx Freight businesses.

In addition, Richard W. Smith will serve as President and CEO of Airline and International at FedEx Express, overseeing all other regions and FedEx Logistics.

There will be no change in financial reporting segments during the transition period leading up to June 2024.

Source: FedEx