Presentation is loading. Please wait.

Presentation is loading. Please wait.

Essential Trade Infrastructure: Express Delivery Services March 15, 2002 Scott Hallford Vice President, Government Affairs FedEx Express.

Similar presentations

Presentation on theme: "Essential Trade Infrastructure: Express Delivery Services March 15, 2002 Scott Hallford Vice President, Government Affairs FedEx Express."— Presentation transcript:

1 Essential Trade Infrastructure: Express Delivery Services March 15, 2002
Scott Hallford Vice President, Government Affairs FedEx Express

2 History of FedEx (the world’s largest all-cargo fleet)
1973 – Began operations as first integrated air/ground express carrier Delivered 186 packages to 25 U.S. cities using 14 Falcon jets. Today, FedEx connects more than 211 countries in less than hours, & delivers 3.3 million packages daily using 667 dedicated aircraft (the world’s largest all-cargo fleet)

3 Growth of the Express Delivery Industry
Increase in high-tech & high-value added products as a % of all economic activity Rapid globalization in the marketplace Fast-cycle logistics Emergence of the Internet & e-commerce In 2000, Worldwide B2B eCommerce is $226 billion (North America $159B, Asia Pacific $36B, Europe $26B, Latin America $3B, and Africa/Middle East $2B) By 2004, worldwide B2B eCommerce will grow to approximately $2.8 trillion (North America $1,601B, Asia Pacific $301B, Europe $797B, Latin America $58B, and Africa/Middle East $18B

4 Express Delivery Express delivery services consist of:
The expedited collection, transport, & delivery, Of documents, printed matter, parcels, and/or other goods, While tracking the location of, & maintaining control over, such items throughout the supply of the service

5 Life Before FedEx Have you ever used express delivery?
What was it like to get a letter, document or goods delivered rapidly, securely and on-time?

6 Express Delivery Industry
Industry has become the leading facilitator of trans-continental trade International air cargo accounts for about 2 percent of the tonnage moved, but over 40 percent of the total value of those goods For every $1 spent on express transportation, companies can save $1.50 in warehousing & inventory costs 1. Express growth has averaged 24% since 1992 and is expected to grow at 13% per year through 2019 2 Air Cargo increased 5.7% in 1999 and is expected to grow an average 6.4% per year through 2019 (from billion RTKs (Revenue-Tonne Kilometers) to over 470 billion RTKs in 2019 3. The Express portion of the Air Cargo has an overall share of 9.2% in 1999 and is expected to expand to 31% in 2019 of total air cargo. REMEMBER AIR CARGO ISSUE!!!!!!

7 U.S. Experience – Memphis
Approx. 53,000 direct and indirect jobs Since early 1980s, over 130 foreign- owned firms from 22 countries employing 17,250 workers Companies such as Nike, Apple Computer and Disney established based on proximity to FedEx In 1981, the FedEx Superhub in Memphis, TN opened. FedEx is the largest PRIVATE employer in the State of TN

8 U.S. Experience – Memphis
From , company relocations and expansions generated - 10,000 new jobs - Over 12 million square feet of new space - Over USD 710 million in new investment Economic impact on the surrounding region from is estimated at USD 90 billion Memphis hub sorts approx 1.2 million packages per night. At CDG, FedEx created approximately 4,300 direct and indirect jobs. At Subic Bay, FedEx created over 600 direct jobs.

9 What Does a Modern Economy Need? business need - Consolidate &
Philips Semiconductors, Inc. business need - Consolidate & centralize international supply chain - Customers frustrated due to consistently late shipments - No visibility of goods in transit due to multi-carrier network - Growing pipeline of inventory due to extended transit time

10 Philips Semiconductors, Inc
Source plants spread over 17 countries Each plant had different shipping operation requiring Philips to manage a network of 30 airlines, 6 customs brokers & 8 freight carriers Fragmented supply chain meant a 2 week total transit time Customer demanded faster service Supply chain management not equipped to handle shortened cycle time efficiently & had numerous costly attributes

11 Philips Semiconductors, Inc
Information about product in transit incomplete & delivery schedules unpredictable Customers demanded more speed & reliability Began stocking buffer supplies in additional depots near customers adding inventory

12 Philips Semiconductors, Inc
What other industry could respond to this??? The FedEx Solution: One-stop transportation, warehousing & distribution network with extensive international capability

13 Philips Order Management System
Philips Results: Product cycle time (ordering and processing time) reduced from 3 weeks to under 5 days Integrated information systems provided visibility of goods in transit Web-based tracking improved customer satisfaction Overall global customer response time(ordering, processing and delivery time) reduced from 2 weeks to less than 5 days

14 Today’s Marketplace – Global
SMEs want to reach new markets Multinationals want to ensure efficiency Explosion of e-commerce - Internet-enabled commerce in US to reach USD 3 trillion in 2004 (both B2B and B2C) SME Example: Let’s take a look at a typical e-commerce SME-related transaction. You may be in the market for a rare bottle of Cabernet for a special planned celebration. As you don’t have time to shop around for that particular vintage, you go online and complete the process by the click of a button. You log on to the computer, pick a search engine, and find a number of websites specializing in fine wines. You make your choice and place the order. This convenience was unavailable just a few years ago. At this point, you’ve just been dealing with the communications aspect of the transaction; however, you need the wine immediately – that’s where we come in. At the end of the stream of electronic transmissions, there must be a real transaction – physical delivery – a rapid and dependable movement of the product from the seller to buyer. The Internet has raised customer expectations by allowing goods and services to be offered in real-time on a global basis. The expectations include a hassle-free experience that will provide a complete solution from selection, order entry, confirmation, payment, and delivery. SMEs are realizing that express transportation is as important as an appealing product and website. Multinationals want to ensure efficiency: Want fast, time definite, and information intensive service to ship goods and components throughout the world. Express delivery offers such service, providing the just-in-time needs that multi-nationals require.

15 FedEx Hub-and-Spoke System
FedEx collects & transports shipments from the door of the shipper to sorting hubs located in the U.S., Europe & Asia Shipments are unloaded, sorted & transloaded w/in 4 hours onto outbound planes for a time definite, customs- cleared, delivery to the door of the recipient as early as 8:am the next business day “Hub-and-Spokes” package distribution system pioneered by FedEx Hub locations: U.S. - MEM, AWF, OAK, EWR, IND, ANC Europe - CDG Asia - SFS

16 Allows overnight intra-Asian delivery Connects 19 Asian destinations
Known as FedEx AsiaOne Network Allows overnight intra-Asian delivery Connects 19 Asian destinations Serves more than 31 countries & territories in Asia Pacific Links Asia with 211 countries - Links North & South America through ANC hub - Links Europe through Paris hub - Links Middle East & India through Dubia & Mumbai

17 Benefits of the Express Delivery Industry in ASEAN
In 1999, approx. $50 billion in economic benefits generated from exports, imports, transportation and employment 30 billion in export benefits 20 billion in import benefits Approx. 350,000 jobs created Represents approximately 6.5% of the cumulative Gross Domestic Products of the ASEAN member economies. These figures represent the total of direct, indirect, and induced economic benefits relating to exports, imports, transportation and employment

18 Creating the Express Delivery Infrastructure
GATS commitments in express delivery services - Remove barriers and limit new barriers - Certainty of existing market conditions Trade facilitation - Partnership in infrastructure development The GATS negotiations provide a critical opportunity to create an efficient express delivery infrastructure around the world. As I have stated today, the importance of this infrastructure cannot be underestimated, given the growth of e-commerce and just-in-time manufacturing. Express delivery services are not the same as bicycle messenger services, local or personal courier services, or traditional mail services. All of these have different characteristics, different prices, and different customer bases. FedEx would like WTO Members to have the opportunity to make commitments for only those services for which it feels comfortable, without endangering its own domestic priorities. Virtually all Members are familiar with companies like FedEx operating in their markets. However, existing market access is inconsistent and unpredictable. The key to developing a reliable infrastructure is to ensure that relevant commitments are in place for the removal of existing barriers to efficiency and for the prevention of new barriers. Such commitments would provide certainty of market conditions and enable strong competition on the basis of a level playing field. The creation and preservation of this framework provides a building block for new investment (both foreign and domestic) that requires this infrastructure to compete globally. Finally, FedEx supports new rules on trade facilitation, in particular rules aimed at creating more efficient and consistent disciplines applicable to cross-border delivery on an expedited basis. FedEx does recognize, however, that rules in and of themselves are not beneficial unless they translate into practical facilitation on the ground. FedEx is interested in continuing and expanding its work with relevant authorities in training and capacity building projects in order to ensure that the mutual benefits of trade facilitation are realized.

Download ppt "Essential Trade Infrastructure: Express Delivery Services March 15, 2002 Scott Hallford Vice President, Government Affairs FedEx Express."

Similar presentations

Ads by Google