DELIVER TODAY. INNOVATE FOR TOMORROW.
To our FedEx stockholders,
I am honored to write to you for the first time as President and CEO of FedEx Corporation. It has been my greatest privilege to
learn firsthand from our founder Frederick W. Smith, a visionary titan who successfully led this company for its first 50 years.
Now, as I take on the role of President and CEO of FedEx, I feel immense pride in what our organization has already accomplished,
how we’ve upheld our promise to deliver outstanding experiences, and the bright future ahead.
Connecting people to possibilities for 50 years
FedEx was founded to connect people in ways others could not. To deliver in ways that created possibilities. As the need for
reliable supply was brought to the forefront over the last few years, it was our ecosystem of team members across over 220
countries and territories that kept our customers, global trade, and society moving. The world grows more complex every day,
yet our commitment to service and the Purple Promise — to make every FedEx experience outstanding — remains constant.
We are at a pivotal moment in our history as we enter our 50th year, and I am honored to share the vision of how we are delivering
what’s next.
Because even after decades of changing the world, we are just getting started.
Unlocking the full potential of our network
The FedEx network is our distinctive strength and one that is exceptionally difficult to replicate — an unmatched combination of
scale, access, and flexibility.
Now, we’re ready to unlock the value from this foundation. This will shape how we operate, collaborate, and invest to Deliver
Today and Innovate for Tomorrow.
How we’re going to deliver
Our strategy, Deliver Today and Innovate for Tomorrow, aligns both our short-term and long-term goals. Deliver Today captures
the immediate work at hand, with three key strategies to drive stockholder value:
We will create strong annual revenue growth with a focus on driving premium yields and balanced growth, achieved
through specific commercial levers, such as focusing on high-value customer segments.We will concentrate on operational
levers, including data-driven customer insights and the optimization of existing infrastructure, to enhance our levels of
service and increase capacity — with rigorous business planning and strict return on invested capital (ROIC) requirements
guiding every dollar of new capital expenditure (CapEx) deployed.
We will increase focus on margin expansion and profitable growth by delivering through a more efficient network.
FedEx Ground will harness the power of the network we have been building since inception, and we will continue to win in
the attractive less-than-truckload (LTL) market at FedEx Freight. Additionally, we will enhance FedEx Express profits from a
physically integrated European operation.
With over 95% of U.S. revenue generated by customers who use more than one of our operating companies*, there is an
opportunity to maintain the advantages of our distinct networks while leveraging enterprise capabilities. We are undergoing
a transformation that will enable increased collaboration between FedEx Ground, FedEx Express, and FedEx Freight by
enhancing asset utilization to move packages seamlessly through the network, improving customer experience and, at the
same time, reducing our cost to serve and expanding margins.
We will lower capital intensity and increase ROIC for future investments with thoughtful, precise allocation.To enhance
returns through profitable growth and capital efficiency, we will reduce fleet investment, elevate ROIC, and drive higher
dividend payouts and stock buybacks.
Our focus on execution and driving higher returns, paired with lowered capital intensity, is expected to drive stockholder
value over the next three years and beyond.
These efforts will combine to significantly increase Total Stockholder Return (TSR) by FY25.The entire FedEx leadership
team is united in our determination to achieve these goals. Together, with our Board, we have integrated TSR into our long-term
incentive program to ensure disciplined execution.
Supporting these goals are our three strategic operating principles:
- Compete Collectively reinforces customer centricity as the foundation for every experience FedEx delivers.
- Operate Collaboratively transforms the way we work across operating companies to improve the customer experience, asset
utilization, and financial performance.
- Innovate Digitally harnesses data and technology to make supply chains smarter.
And this is just the beginning
We have bold visions for FedEx. Our intelligent supply chains, unique culture, and unwavering commitment to sustainability
provide a blueprint as we Innovate for Tomorrow. With organization-wide infrastructure modernization, new data-driven
offerings, and sustainability-driven solutions, we’re leveraging the power of technology to make supply chains smarter
for everyone.
And, of course, our culture and people will keep us moving forward. With our People-Service-Profit philosophy, we will continue
to develop the entrepreneurial spirit of our people and communities.
Our next step
In closing, we stand at a pivotal moment in our company’s history.
We are focused on balanced growth and revenue quality, expanding our margins, and increasing returns on capital. As we evolve
and better serve our customers, our people, and our stockholders, we are delivering the next half century of our legacy.
I hope you share in our confidence as we chart the path forward for FedEx.
Sincerely,
RAJ SUBRAMANIAM
President & CEO, FedEx Corporation
*Revenue from U.S. payors for the period April 2021–March 2022 for FedEx Express Domestic, FedEx Express International (U.S. Outbound), FedEx Ground (including Ground Economy), and FedEx Freight.
See “Forward-Looking Statements” and “Risk Factors” on pages 26-37 of the fiscal 2022 FedEx Corporation Annual Report on Form 10-K for a discussion of potential risks and uncertainties that could materially affect our future performance.