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FedEx to consolidate operating companies

April 6, 2023
FedEx Express, Ground, Services, and other companies will be consolidated into Federal Express Corporation. The company is undergoing a major restructuring that it projects will cut $4 billion in annual costs starting fiscal year 2025.

FedEx Corp. is consolidating its operating companies into one organization, the No. 1 FleetOwner 500 for-hire carrier announced Wednesday at its DRIVE Investor Event. FedEx Freight will continue to provide less-than-truckload freight transportation services as a stand-alone company under Federal Express Corporation.

The transition, with full implementation expected in June 2024, will bring FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies into Federal Express Corporation. Raj Subramaniam will serve as president and CEO of the combined organization.

“Over the last 50 years, we built networks that have created a differentiated and unmatched portfolio of services,” said Subramaniam. “This organizational 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.”

See also: FedEx to cut costs

The company stated that its new structure will facilitate the company’s DRIVE transformation intended to streamline processes and save $4 billion in costs every year starting in fiscal year 2025. This including Network 2.0, the multi-year effort to improve efficiency by consolidating the efforts of its Ground, Express, and Freight networks, projected to save the company $2 billion in fiscal year 2027. In addition, the unified organization will bring focus to the air network and international volume, as well as utilizing both FedEx employees and contracted service providers in ground operations, according to the press release.

“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,” Subramaniam said. “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.”

FedEx projects costs of up to $2 billion by the end of fiscal year 2025 to implement the DRIVE and Network 2.0 programs.

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. Richard W. Smith will serve as president and CEO of airline and international at FedEx Express, overseeing all other regions and FedEx Logistics.

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