Over twenty-five years ago, in 1973, Federal Express
Corp had 389 employees and catered to 25 cities in USA. Today, with revenues exceeding $12
billion, it employs 1.45 lakh people and provides services in 211 countries. Its
client-server network is reputed to be the largest in the world, processing nearly 58
million electronic transactions each day. Thanks to its computer network, the company is
also one of the biggest enablers of ecommerce in the world. Unknown to many, FedEx has
been playing the role of an ecommerce enabler in India too. Sidharth Tripathy, Senior
Marketing Specialist for the Indian sub-continent, shares his experiences with DATAQUEST.
Instrumental in launching FedEx in the Indian sub-continent and establishing it as a
pioneer in the area of ecommerce in India, the 28-year-old Tripathy dreams of making FedEx
the ‘Airline of the internet’ in India.
FedEx, to most, is a trusted and efficient global courier company. Could you elaborate
on the company’s role in ecommerce?
FedEx is not only the world’s largest express transportation company, it is also one
of the first express carriers to give customers entry to the world of ecommerce. At FedEx,
technologists continue to explore the leading edges of the industry, finding innovative
ways to integrate information systems with global distribution. Our activities in
ecommerce started with initiatives like real-time shipment information, FedEx
Supertrackers. Then we launched FedEx Powership, an automated shipping systems to simplify
shipping processes and now with FedEx Internetship, customers create shipping labels,
request courier pickups, even send email notifications to recipients of the shipment-all
from a click of the mouse at FedEx web site.
How critical is FedEx’s role in
In ecommerce there is a more direct relationship between the buyer and supplier in one
sense. As the channels separating suppliers from buyers become less, the dependency on
integrators like FedEx becomes more critical. The online buyer expects from a reputable
carrier like FedEx adequate ‘control placebo’ to ‘walking out with the goods’ and reliable
delivery within the time committed. The online supplier expects support in increasing its
business and reducing channel cost, adding value to the online proposition with 100%
reliability, and providing efficient shipping processes with different automation
All of this is supposed to be a
part of FedEx’s 3V strategy. When did FedEx arrive at this strategy and how does it relate
to the company’s overall strategy?
In order to meet the changing expectations of our customers in the early Eighties, FedEx
formulated the 3V strategy: vision, value, and virtual. The vision network represents our
long-term plan to expand the international flight network. The marketplace demands that we
expand our express logistics system to encircle the globe. Our vision is to connect 90-95%
of the world’s GDP within 24-48 hours. The expansion of our vision network by services
like International Priority or the AsiaOne Network has been the competitive advantages
that we have built. The value network is a ground and air-based initiative for efficiently
moving shipments through the FedEx system, thereby providing more value to our customers
worldwide. The significant tactical innovation here is the use of short and long-haul
surface transportation integrated with our vast air operations.
FedEx’s Virtual Enterprise initiative is a wide ranging project conceived to push
cutting-edge computer technology further into all areas of our business and our customers’
business. The name of the game is access. We extend our electronic reach to all express
customers, enabling them to electronically access markets with little regard for time or
distance. In combination, the three strategies of vision, value and virtual add tremendous
value for our customers and that translates into a healthy future for FedEx.
FedEx’s 3V is all about
providing cutting edge technology to customers and customer’s customers. What does it
With increasing globalization of business, people have begun to rethink their supply
chain management. A manufacturer may wish to ship a product to his customer. FedEx’s
virtual initiative provides such services by which a manufacturer’s customer immediately
comes to know about the airway bill number as soon as it is generated and then he can go
to the FedEx website to track this package. In this era of mass customization, companies
are required to source products from various suppliers and hence they need to keep huge
loads of information. FedEx World is a multi-platform, multi-user, multi-language system
that is self-installable and it can provide your MIS all shipping details so that you have
better control over your value chain.
What is FedEx’s investment in
Over the years, FedEx has been making major investments, to the tune of around $2 billion,
every year in the area of technology. The company ranks as one of the world’s busiest data
processing centers with over 63 million electronic transmissions made in the FedEx network
every day. By the year 2000, the total available capacity of the FedEx global network will
be 16 billion bits per second across the wide area network. In 1987, it was just 2.5
What is FedEx’s role in
Rediff.com or any other online shopping mall’s operations?
Rediff.com is one of the most popular India-oriented online service sites across the world
with over 40 million hits every month. As strategic enablers, we provide the pick-up and
delivery capability to Rediff while allowing its customers to track their shipment’s
movement through different locations on internet. And we connect the various suppliers of
Rediff through our network so that they do not have to maintain any warehouse. This way
FedEx plays a key role in integrating the whole process by receiving pickup request,
sending confirmation and time of delivery along with the signature of the recipient on the
web which triggers invoicing and finally, if required, provides reverse logistics.
What are the key issues that
generally bother an online shopper? And how does FedEx deal with these issues? Is there
any kind of guarantee given by FedEx to its online customers?
For an online shopper, secure data transmission is one thing. Confident buying is another.
Thoughts which bother him are: can I trust what I buy; can I trust that I’ll get it; when
can I expect the goods; and when can I know that something may be wrong and I need to act.
FedEx provides peace of mind to online shoppers by making the transportation process more
visible. Information on package status makes virtual shopping as good as ‘real’. Similarly
Proof Of Delivery (POD) is a commitment from the buyer that he has received the goods. We
complete the cycle by providing adequate after-sales service by reverse logistics to
substitute for the option to go back to the shop and return.
FedEx provides a ‘money-back guarantee’ to all its shippers even if the shipment is
delayed by a mere 60 seconds from the committed time. This demonstrates FedEx’s confidence
in its unmatched physical as well as information network.
What is the cycle time in which
you operate in India?
Cycle time is dependent on the destination, type of goods and the mode of transport which
could be ‘priority’ or ‘deferred’. FedEx is not only one of the fastest movers of high
priority and time-definite shipments but what is important is that we continue to extend
our presence in markets that are important to exporters and importers by increasing flight
frequencies, forging electronic links with customs authorities for faster clearance and
negotiating for expanded air routes.
Since FedEx is highly automated
and driven by IT, does it require all those who are using FedEx services to be IT-savvy?
To what extent does it help?
I think making technology easy to use is the major strength of FedEx. A customer can by
type in the airway bill number of his package can view the most recent and detailed
information about the status of his package. What keeps the distance between us and our
competitors is that we continue to take technology to a different level of application.
Who are the other companies
using FedEx service for their ecommerce activities in India?
For competitive reasons we cannot disclose the names of some of our ecommerce
customers but it is interesting to note that we are seen as leading enabler in the area of
ecommerce. We are helping to set up worldwide distribution of ecommerce ventures for a
wide range of products from books, music, handicrafts to even consumer products like
What is the revenue expected to
be generated from this?
FedEx looks at ecommerce as a major area for growth. According to Forrester Research, the
total value of goods and services traded via the internet will top $320 billion by 2002,
compared to less than $10 billion in 1997. FedEx is positioned well to capitalize on this
growth by efficiently switching packets of goods as well as packets of electronic data.
The company is planning a series
of ecommerce seminars in India. How different would these seminars be and what would be
FedEx is playing a pioneering role in ecommerce in India. The first logical step in this
direction is educating prospective ecommerce businesses about the various components of
ecommerce such as setting up web sites, creating interactivity, financial transactions on
the net, integrated distribution and order fulfillment. What is unique about the FedEx
ecommerce workshops is that we try to disseminate expertise on all the components of
ecommerce. We are working with IBM, Rediff-on-the-net, and a few other companies to offer
something like a single-stop knowledge center.
We intend to continue our efforts by creating a step-by-step guide on ecommerce which will
be useful for ecommerce prospects. I am confident that these workshops will provide Indian
businesses with the information and impetus to connect to the rest of the world and
leverage from the global economy by selling their products and services online.