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FedEx Plans Consolidation of Operating Companies by Mid-2024

FedEx has revealed plans to merge its operating companies into a single organization. This move is aimed at increasing efficiency and improving the company’s capacity to meet the changing demands of customers, ultimately resulting in a more robust and profitable enterprise.

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By June 2024, FedEx plans to complete a phased transition that will combine its various operating companies, including FedEx Express, FedEx Ground, FedEx Services, and others, into a single entity known as Federal Express Corporation.

The integrated air-ground network will operate under the globally respected FedEx brand.

However, FedEx Freight will continue to function as an independent company within the Federal Express Corporation and will provide less-than-truckload freight transportation services. Raj Subramaniam will serve as the President and CEO of the newly merged organization.

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

“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.”

FedEx – Flexibility, Efficiency, Intelligence

FedEx’s new structure is intended to support FedEx’s DRIVE transformation, which includes Network 2.0, a multi-year initiative aimed at enhancing the efficiency of package pickup, transportation, and delivery in the U.S. and Canada.

The consolidated organization will provide a concentrated focus on the air network and international volume, while adopting a more comprehensive approach to ground operations by utilizing both FedEx employees and contracted service providers. This approach is expected to improve the company’s overall efficiency.

“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 ensure a seamless transition, John A. Smith will assume the role of President and CEO of U.S. and Canada Ground Operations at FedEx Express, effective April 16, 2023.

He will lead surface operations across all FedEx businesses, including FedEx Express, FedEx Ground, and FedEx Freight.

Meanwhile, Richard W. Smith will take on the position of President and CEO, Airline and International at FedEx Express, overseeing all other regions and FedEx Logistics. There will be no changes to the financial reporting segments during the transition period leading up to June 2024.

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