News and takeaways from FedEx investor day.
FedEx held its annual investor day in Memphis, TN, on June 29, 2022. During the broadcast, several themes emerged from the presentations: asset utilization, collaborative initiatives, and optimization of line haul networks.
The last several years have seen intensive capital investments in buildings. The problem is no company can keep up with the demand, as it generally takes years to build one building. Asset utilization will help curve this issue. We have been talking about wave dispatching for a few years. Wave dispatching is where multiple shifts will dispatch out of one terminal at various times. As the first shift dispatches, the second shift trucks will move to the now-empty docks for the next dispatching wave.
Expect an increase in Express packages on Ground trucks as part of the collaborative initiatives. FedEx Ground has delivered over 70 million Express packages to date. FedEx plans to reduce 100 stations in the next three to five years, mainly express stations. Based on package data, Express and Ground packages will come to the same station.
FedEx plans to knock out 10% of routes; we see this as the elimination of express routes, as mentioned above.
FedEx Ground Linehaul drove 2.4 billion miles in FY 21. Or 54 round trips to Mars! FedEx freight drove over 1 billion miles. They planned on utilizing both companies to help carry trailers out of an area. Why does it make sense to have two drivers come to one location?
FedEx aims to have all-electric vehicles by 2040.