By Keith Norbury
It has become part of business lore that the founder of fast-freight giant FedEx conceived the idea of an overnight delivery service while he was an undergraduate student at Yale University in the early 1960s. The story usually goes that Frederick W. Smith’s term paper did not impress his professor who accorded him a mediocre grade. Mr. Smith himself put it on the record later that it was “probably my usual C.”
Regardless of the grade on that paper, Mr. Smith incorporated Federal Express in June 1971. And on April 17, 1973, the company took flight with 14 small planes departing from Memphis, Tennessee, to deliver 186 packages to 25 cities across the U.S., according to a company history on the FedEx website.
Since that modest beginning, the company, which adopted the FedEx nickname as its brand in 1994, has grown into a global force. Today, FedEx Corporation and its many subsidiaries boast annual revenues of $43 billion with its 300,000 “team members” delivering 3.6 million items each business day to more than 220 countries and territories.
In 1981, Canada became the company’s first destination for international delivery. Today FedEx employs more than 7,000 people in Canada, including 6,000 in its FedEx Express Canada Ltd. subsidiary, said Adrian Grundy, Manager of Corporate Communications for FedEx Express Canada. FedEx Ground, meanwhile, has about 900 employees in this country. And FedEx Freight, the company’s new “less-than-truckload,” or LTL, business employs about 200 and is growing quickly, Mr. Grundy said.
“Our main business here is overnight priority express delivery, door-to-door, both domestically in Canada, as well as internationally,” Mr. Grundy said.
This year marks a milestone for FedEx Freight Canada Ltd. as it celebrates the 25th anniversary of its incorporation. The Canadian subsidiary was formed in 1987, when parent Federal Express Corporation bought Cansica Inc., which had been its licensee in Canada. In the next two years, EastWest Courier of Ontario, Bluejay Courier of New Brunswick, and Yuill Courier of Nova Scotia were added to the FedEx Express Canada fold.
Today, FedEx operates in 65 locations in Canada, with a fleet of 26 aircraft, 18 of them serving domestic routes, as well about 2,000 trucks. As a sign of its continued growth in Canada, FedEx Freight Canada broke ground this summer on a new 72-door state-of-the art service centre in Surrey, B.C. The 30,000-plus-square-foot centre, which will serve the Vancouver region, is slated to open by the end of the year. A similar purpose-built leased facility recently opened in Calgary.
“FedEx Freight as a whole has a growing footprint here in Canada,” Mr. Grundy said, adding that as demand for FedEx services increase, it will mean more FedEx jobs in this country.
In October 2011, FedEx Express Canada was named one of the country’s top 10 best employers by Maclean’s magazine and Aon Hewitt. It marked the eighth time in 11 years that the company cracked the top 50 in the awards, which in 2011 included a field of 261 companies.
“FedEx is built on three simple words: People, service, profit,” FedEx Express Canada President Lisa Lisson said in a news release announcing the award. “We believe that in order to deliver outstanding service and to generate sound profits, you first need great people. The fact that we are in the Top 10 is as much a testament to our 6,000-strong team as it is a statement of the kind of employer we strive to be,” added Ms. Lisson, who is the first Canadian, as well as the first woman, appointed to lead the division.
Mr. Grundy noted that the award was based on an employee survey, which he said “really speaks to the fact that we have a people-oriented culture here.”
The company followed up that honour in June with all three of its FedEx Canada customer-service centres winning Contact Centre Employer of Choice designations for the fourth straight year. Mr. Grundy also credited the employees with winning those awards. But he also gave credit to the contact centres themselves, which he called “an open, really welcoming, and quite vibrant environment.” “We call it contact centre because it’s not just a matter of picking up a phone and calling any more,” he said. Customers can now interact with FedEx through online chats, email, Twitter and Facebook, for example.
While Federal Express itself dates only from the 1970s, the roots of the modern conglomerate go much deeper – back to 1913. That’s when C.J. Tower & Sons customs brokers began operations in Niagara Falls, N.Y. That company eventually became the Tower Group International, which FedEx acquired in 2000 to become part of FedEx Trade Networks (FTN).
Similarly, Roberts Cartage, founded in 1947 in Akron, Viking Freight Inc., founded in San Jose in 1969, and Kinko’s, founded in 1970 in Santa Barbara, have all become FedEx subsidiaries.
Those are just a few of the acquisitions over the years. A timeline and company history on the FedEx website details dozens of companies from around the globe that have become part of FedEx in recent decades.
Mr. Grundy said FTN, which comes under the FedEx Express umbrella, is primarily a brokerage organization that can arrange the entire distribution process, including custom’s clearance. “Often we have customers who need to get products shipped quickly via overnight priority; but they also have components that often require less urgent delivery and perhaps can even go in an ocean container,” he said.
While FedEx invented the hub-and-spoke overnight express delivery model, its business today encompasses much more than that, Mr. Grundy said. “Certainly we’ve grown,” he said. “We’re in the air. We’re on the ground. And, of course, now we’re on the ocean.”
As for the oft-told tale that Mr. Smith received a “C” on his paper at Yale, Mr. Grundy couldn’t confirm that. However, he did note, “There’s always somebody’s who’s there to say that an idea won’t work. Our chairman believed rightly that his idea would work. He executed it and now we are what we are today.”