Danny B. Gant Managing Director Customer Services The FedEx Approach To A Fully Customer-Centric Culture Service is all we sell…no widgets..just service. Danny B. Gant Managing Director Customer Services

Over 40 years ago, FedEx was built around a single focus… I’ve been around a long time – 35 years – FWS established the culture and operating philosophy of our company with a simple belief – PSP …It is still alive today and extremely strong Living PSP… The core philosophy that governs every activity at FedEx is People-Service-Profit (PSP): Take care of our people; they in turn will deliver impeccable service demanded by our customers, who will reward us with the profitability necessary to secure our future. –Frederick W Smith P-S-P 2

the company has evolved over time… FedEx has grown from the small Express company that created a new industry in the US. 50K packages to 11MM per night service 220 countries with over 300K employees worldwide. 3

T More than 300,000 team members worldwide Handle more than 10 million shipments per day for express, ground, freight and expedited delivery services Serve more than 220 countries and territories, including every address in the United States fedex.com Support over 32 million unique visitors monthly; more than 6.5 million package tracking requests daily and more than 20 million labels generated via FedEx Ship Manager monthly Annual Revenue – Approximately $46 Billion 4

649 aircraft; 375 airports served worldwide More than 100,000 motorized vehicles for express, ground, freight and expedited delivery service Dropoff Locations 690 FedEx World Service Centers 1,750 FedEx Office locations 6,300 FedEx Authorized ShipCenters® and Alliance Partners 37,000 FedEx Drop Boxes Operating Facilities Express: 1,200 stations; 10 air express hubs Ground: 33 ground hubs; over 500 pickup/delivery terminals Freight: Approximately 370 service centers Office: More than 1,800 locations 5

The FedEx Brand Our reputation transcends all FedEx companies…. …and our reputation rises and falls with the reputation and experiences our customers have with each and every part of FedEx And our reputation is a very important driver of the loyalty of our customers 6 6

Customer Loyalty is Core to Our Success The Customer is at the heart of everything we do! Sustainable Growth Lower Customer Acquisition Costs Business Growth Customer Loyalty Willing to recommend to others Intend to continue to use Highly satisfied So that we all understand the strategic importance of growing the loyalty of our customers, let’s take a quick look at what loyalty is and what creates it. Loyalty is when a customer consistently chooses your product or service over the competition and recommends it to their friends. It’s when price is not the driving factor in their choice. We know that loyalty also has a significant impact on our bottom line and is a good predictor of future revenue growth. If we move 1% of our customers from disloyal to the loyal, that generates an additional $100MM in revenue. 7

Worldwide FedEx Team Members Deliver the “Purple Promise” Daily to Strengthen Customer Loyalty ~22MM customer interactions per day = 22MM opportunities to put our best foot forward in influencing our customers. Because our people are the closest to the experience, we arm them with the knowledge and tools necessary to deliver an outstanding experience Focus employees on being the person that the customers want as a partner Design structures, processes, tools and practices to drive the right result – teach employees that Quality = experience The “Purple Promise” – I will make every FedEx experience outstanding -An oath that is simple, but far reaching…unites across regions, roles and companies What is the difference between Service and Experience – “Service lives in the head. Experience lives in the heart.” We look for that discretionary effort that drives the difference between customer satisfaction and customer loyalty -Must deliver an approach to Customer Experience that differentiates FedEx from competitors in a world where products, pricing and technology are very similar. The Purple Promise: “I will make every FedEx experience outstanding” 8

Quality Driven Management (QDM) Drives Delivery of the Purple Promise People, Service, Profit FWS was a student of Deming. Quality and continuous improvement as always been a hallmark of FedEx QDM is a quality methodology and philosophy that was created by FedEx for FedEx….a complex service enterprise. It provides a set of methods, techniques and tools to drive quantifiable results – a common language and approach for all operating companies 99.9% - dissapoint 4000 customers per day, or every one of our customers in just 1000 days. 99.99% - disappoint each of our customers only once every 27 years. Purple Promise – our goal for Cust Sat – It’s what we do Customer Loyalty – is why we do it QDM – is how we do it. “QDM will give us common ways to improve Quality across our entire enterprise. For the first time, we will all use the same language, tools, and metrics to analyze the causes of problems and plan corrective actions. QDM is the way FedEx will manage our business to drive Quality and brand loyalty to new heights.” Fred Smith Chairman, President and CEO FedEx Corporation “ 9

QDM: The Way We Work At FedEx Institutionalizing QDM Principles within our culture is critical to a holistic adoption QDM Principles are designed to drive desired organization behaviors Behaviors demonstrate what a culture values What a culture values guides decision-making on a day-to-day basis 1 2 3 4 5 6 Customers Define Quality Be Scientific Measure, Measure, Measure Optimize Business Performance Quality Involves Teamwork View Failures as Opportunities Strive to understand customer requirements and expectations: Who are our customers? Are they satisfied with the services we provide? What areas do they want us to improve? Base decisions on facts and data, not guesses or opinions: Have we gathered an adequate fact base? Do we understand the root cause of the problem? Will our solution address the root cause? Measure failures, measure variation: Do we have measurements in place? Do we monitor measurements to identify continuous improvement opportunities? Does the measurement tie to strategic objectives? Minimize unnecessary effort, time, and cost: Do we recognize value-added vs. wasteful activities? Do we apply QDM/Waste Reduction Workshop (WRW) tools to proactively minimize waste? See work as a collaborative process: Have we engaged all our key stakeholders? Have we built common understanding of our key objectives, deliverables, timeline, etc.? Seek the truth and end the blame game: Do we appreciate those who identified the failures Do we understand root causes of the failures and do we gather learning to confirm our hypotheses? Do we develop action plans? Do we share learning? de Principle define Organizational behaviors fine desired organizational behaviors QDM Principle define Organizational behaviors ABLE provides the continuous improvement and problem solving methodology for both QATs and daily tasks A comprehensive Quality toolset is made available that covers beginner, intermediate, and advanced levels A consistent, and disciplined way for the company to keep customers at the heart of everything we do. QDM: The Way We Work At FedEx 10

Quality Action Teams (QAT) use the ABLE Quality Improvement Process Assess opportunities to improve the customer experience or business performance Evaluate the implementation to confirm its real-world success Build understanding of the Quality issue, build a solution for addressing its root cause, and build the business case Formal QAT’s are for more complex issues that normally span across organizations and operating companies. Launch the solution successfully through careful planning and control 11

Connecting with the Customer “Customer Service is not a Department” FedEx OneCall Customer Advocate Team Executive Services Social Media Couriers/Sales/Technicians 1-800-Go-FedEx Moments of Truth/Focus Sessions 12

Connecting with the Employee REACH Program- Reps Engaged And Connected At Home Employee Surveys Leadership, Culture, Service Pay and Benefits/Tuition Reimbursement Competitive, Attract and Retain! Recognition Programs Bonus Programs-All Levels! Bravo Zulu PP Award Celebrations! Births, Graduations, Weddings, Service Awards 13

Community Support Humanitarian Awards

Living P-S-P I contribute to a positive FedEx Spirit I act accountably to support our Living PSP Culture I am a vital link in the chain of success I am committed to personal growth 15

2013 “Top 10 Most Admired Companies,” FORTUNE Magazine Selected awards and recognitions 2013 “Top 10 Most Admired Companies,” FORTUNE Magazine 2013 “100 Best Companies to Work For in America,” FORTUNE Magazine 2012 “Top 10 Best Multinational Workplaces – FedEx Express,” Great Place to Work Institute 2013 “Top 100 Best Corporate Citizens,” Corporate Responsibility Magazine 2013 “Top 15 (#12) Most Reputable U.S. Companies,” Forbes #8 World’s Most Admired Companies 16

“I will make every FedEx experience outstanding” “Keeping the Promise” “I will make every FedEx experience outstanding” 17

Culture Matters- People Take Aways Culture Matters- People Customers and Employees deserve an outstanding experience- Service Happy People and Good Service = Profit

Over 40 years ago, FedEx was built around a single focus… I’ve been around a long time – 35 years – FWS established the culture and operating philosophy of our company with a simple belief – PSP …It is still alive today and extremely strong Living PSP… The core philosophy that governs every activity at FedEx is People-Service-Profit (PSP): Take care of our people; they in turn will deliver impeccable service demanded by our customers, who will reward us with the profitability necessary to secure our future. –Frederick W Smith It still works! 19

Questions? 20