T.C.

DOKUZ EYLUL UNIVERSITY MARITIME FACULTY

BUSINESS LOGISTICS TERM PAPER REPORT

FedEx vs TRANSPORTECA

PREPARED BY

Ezgi MANSUROĞLU – 2012422047

ADVISOR

PROF. DR. OKAN TUNA

IZMIR,2015

INTRODUCTION

In this report, I am going to expound my findings which I learnt throught search process about conventional and innovative logistics companies.

First Chapter is about FedEx which one of the most significant company in logistics industry.I will discourse organizational structure and services with clarification of some points.Such as, revenues of company and social media performance.

Second Chapter mentioned structure and aims of an innovational company which called Transporteca. I will try to explain that how it works and why it so important.

Third Chapter is about comparison of some services of companies and illimunate of main differences between them.

CONTENT

CHAPTER 1

1. General Information of FedEx 4

1.1. Organizational Overview of FedEx 4

1.1.1. FedEx Corporation 5

1.2. Main Services of FedEx 6

1.2.1. FedEx Freight 6

1.2.1.1. FedEx Freight^® Priority 7

1.2.1.2. FedEx Freight^® Economy 8

1.2.1.3. FedEx Freight Competition Position 9

1.3. Potential Customers of FedEx 10

1.4. Number of Employees of FedEx 10

1.5. Headquarters and Geographical Coverage of FedEx 11

1.6. Income Model of FedEx 12

1.7. Revenue of the FedEx 12

1.8. Competitive Position of FedEx 15

1.9. Social Coverage and Performance of the Fedex 17

1.10. Digital Performance of FedEx 17

CHAPTER 2

2. General Information of Transporteca 18

2.1. Organizational Overview of Transporteca 18

2.2. Main Services of Transporteca 18

2.2.1. How to Transporteca Services Works? 18

2.3. Potential Customers of Transporteca 19

2.4. Number of Employees Transporteca 20

2.5. Headquarters and Geographical Coverage of Transporteca 21

2.6. Income Model of Transporteca 21

2.7. Revenue of the Transporteca 22

2.8. Competitive Position of Transporteca 22

2.9. Social Coverage and Performance of the Transporteca 23

2.10. Digital Performance of Transporteca 23

CHAPTER 3

3. Comparison of FedEx Freight and Transporteca LCL 24

4. CONCLUSION 25

5. REFERENCES 26

CHAPTER 1

1. General Information of FedEx

1.1 Organizational Overview of FedEx

FedEx Corporation was founded in 1973 by entrepreneur Fred Smith.Today,with a fully integrated physical and virtual infrastructure , FedEx’s business model supports 24-48 hour delivery to anywhere in the world.FedEx operates one of the world’s busiest data-processing centers, handling over 100 million in-formation request per day from more than 3,000 databases and more than 500,000 archive files.It operates one of the largest real-time, online client/server networks in the world.The core competencies of FedEx are transportation , e-commerce, and business services.

Figure 1 :FedEx Corporation Facts

Source:www.fedex.com

1.1.1 FedEx Corporation

To understand the corporate level strategy of FedEx it is necessary to first know what industries they currently compete in , as well as where they stand within those industries.Currently FedEx is made up of six independent business units:FedEx Express,FedEx Ground,FedEx Freight , FedEx Custom Critical,FedEx Trade Networks,and FedEx Services, each compete in different sectors of the transportation industry in order to tailor entire FedEx service to best fit each customers’ needs.Its parent company is the FedEx Corporation, which offers all of the strategic leadership, as well as the financial accountability for all the business units.The business model that is followed at FedEx Corporation is ‘Operate independently , corporate collectively.’

Figure 2: FedEx Corporation Operating Company Business Segments And Services

Source: www.fedex.com(31.12.2015)

1.1.

1.2. Main Services of FedEx

FedEx is the global leader in the express delivery market. It offers delivery to and from individuals and businesses. The company provides various services under the following business units:

Ø FedEx Services – This business group was formed in 2000 and it incorporates the FedEx Office and FedEx TechConnect businesses. It provides solutions for global supply chains, e-commerce, and data management services to its customers.

Ø FedEx Express – This business is the first service that was provided by the company. It includes time-sensitive, air-ground express services. This business group was formed in 1971. Today, it has a strong network across 220 countries and territories globally. It incorporates FedEx Trade Networks (Air/Ocean Freight Forwarding) and FedEx Supply Chain businesses.

Ø FedEx Ground – Formed in 1985, this segment provides its customers in the US and Canada with reliable business-to-business and residential delivery services through FedEx Home Delivery and FedEx SmartPost.

Ø FedEx Freight – This business segment provides LTL (less-than-truckload) shipping services across the US, Canada, Mexico, Puerto Rico, and the Virgin Islands. It incorporates FedEx Custom Critical(Expedited/Extra-Care Handling) and was formed in 2001. It has the fastest published transit times across any nationwide LTL service.

1.2.1. FedEx Freight

FedEx Freight is a leading U.S. provider of less-than-truckload (LTL) freight services across all lengths of haul. FedEx Freight business segment financial results also include FedEx Custom Critical, a leading U.S. provider of time-specific, critical shipment services. FedEx Multimodal service is available from FedEx Freight.

For efficient delivery, the segment operates through two entities:

§ FedEx Freight – manages all of the normal LTL freight transportation

§ FedEx Custom Critical – it’s only used for time-critical transportation

LTL (less-than-truckload) shipping shouldn’t be hard or time consuming. That’s why FedEx offer customers two reliable service choices — plus value-added and specialized options — all within one streamlined network. Whether speed is critical or customer can trade time for savings, they can count on FedEx to take care of their LTL freight and their customers. FedEx provides a simpler LTL shipping experience with two choices, one streamlined network.

· FedEx Freight^® Priority provides fast-transit delivery of time-sensitive freight to meet custmer’s supply chain needs.

· FedEx Freight^® Economy offers reliable, cost-effective delivery when customers can trade time for savings.

1.2.1.1. FedEx Freight^® Priority

At FedEx Freight they are continually streamlining their network to ensure customers LTL freight shipping is faster and more efficient. In fact, FedEx Freight Priority has the fastest published transit times of any nationwide LTL service.

Combining FedEx Freight Priority fast transit times with FedEx’ proven reliability and extensive coverage, customer have got just what customer need to:

· Increase customer satisfaction

· Expand your geographic reach and customer base

· Reduce your inventory carrying costs

When speed is critical customer can choose fast-transit FedEx Freight Priority to meet their time-sensitive LTL freight shipping needs, either from their suppliers or to their customers. And they'll enjoy easy online shipping management with FedEx Ship Manager^® at fedex.com. International and offshore service is also available to and from Canada, Mexico, Alaska, Hawaii, and Puerto Rico.

Plus, get additional peace of mind with these value-added services:

· No-fee money-back guarantee¹

· FedEx Freight Advance Notice^®

And also customers customize delivery for their unique shipping needs, they can pair the following time-definite service options with FedEx Freight Priority shipments.

· A.M. Delivery

· Close of Business Delivery

· Custom Delivery Window

1.2.1.2. FedEx Freight^® Economy

When customers can trade time for savings with FedEx Freight Economy, customer get reliable, economical delivery to meet their basic LTL freight shipping needs and their budget. And they’ll enjoy easy online shipping management with FedEx Ship Manager^® at fedex.com. International and offshore service is also available to Canada, Alaska, Hawaii and Puerto Rico.

Figure 3:FedEx Freight Facts

Source:www.fedex.com

Four volume service options will give you the best rate for your schedule and budget:

TLS (Truckload Service)

· Transit times will be the stated FedEx Freight® Economy transit times*

· Best option for faster transit times and higher liability coverage

TLA (Truckload Advantage)

· Transit times will be twice the stated FedEx Freight Economy transit times*

· Medium transit times and higher liability coverage

TLX (Truckload Exempt)

· Typically offers lowest quote

· Moves as capacity allows and lower liability coverage

1.2.1.3. FedEx Freight Competition Position

FedEx business transformation has improved its competitive position. FedEx Freight has created a unique place in the LTL industry by offering both priority and economy services, at all lengths of haul for our customers. FedEx Freight^® Priority has the fastest published times of any nationwide LTL service.

Figure 4:Portfolio Expansion

Source:www.marketrealist.com

As FedEx have expanded their portfolio beyond products to products , services and solutions, FedEx Express is now positioned to go after a piece of a much larger global market.

Figure 5: FedEx Freight and Their Competitor’s Market Share

Source:www.marketrealist.com

As you can see in the above chart, FedEx Freight enjoys the highest market share among its competitors. As of 2014, FedEx Freight’s market share was at 16%. YRC Worldwide (YRCW) captures the next highest share with a 14% market share. The third position is captured by Con-way (CNW) with a 10% market share. Fourth place is shared by United Parcel Service (UPS) and Old Dominion Freight (ODFL) with an 8% market share each. Fifth place is shared by ABFS with Saia (SAIA) with a 6% market share each.

1.3. Potential Customers

FedEx is the global leader in the express delivery market. It offers delivery to and from individuals and businesses. So, anyone who needs send something anywhere on the world is FedEx’s potential customer.

1.4. Number of Employees

Consistently ranked among the world's most admired and trusted employers, FedEx inspires its 340,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities.

1.5. Headquarters and Geographical Coverage of FedEx

Headquarters of company is located in 942 S. Shady Grove Road Memphis, Tennessee 38120.According to Frederick W. Smith who is Chairman and Presetendant CEO of FedEx:

‘Because we’re at the nexus of global trade, we have a major role in creating prosperity for millions of people. Because we are vitally integrated into the communities of 220 countries and territories around the world, FedEx keeps moving forward. Movement is at our core, as represented by the arrow in our FedEx logo. It’s a built-in symbol of our forward thinking, and we’re applying that to global citizenship activities in bigger and better ways.’

Figure 6 :Geographical Coverage of FedEx

Source: http://about.van.fedex.com/our-story/global-reach/

FedEx offers the best of both worlds — global reach backed by local expertise. Our worldwide network is served by five regions outside the U.S.: Canada; Asia Pacific (APAC); Europe; Middle East, Indian Subcontinent and Africa (MEISA); and Latin America, Caribbean (LAC)

1.6. Income Model

Figure 7: How FedEx Provide Income?

Source:www.fedex.com

The cash flow is provided by giving tranportation, e- commerce and business services.Every transactions have different tariffs because of different needs of customers.Some services such as value added services,special faster services,door to door or customs brokerage are tailored-services so company provides charges from all of this activities.

1.7. Revenue of the FedEx

FedEx’s revenue rose by about 37% in the past five years from about $34.7 billion in 2010 to $47.5 billion in 2015. This growth in the top line has been in line with the economic recovery in the nation and the industry.

Figure 8:FedEx Revenues 2008-2015

Figure 9:FedEx per Package

Figure 10:FedEx Corporations Consolidated Results in FY 2015(in millions U.S. dollars)

The statistics shows FedEx Corporation’s consolidated results in the fiscal year of 2015.The company’s consolidated operating income amounted to around 1.9 billion U.S. dollars in the 2015 fiscal year.

Figure 11:Revenue Allocation of 4 Main Service Division

Source: www.marketrealist.com(31.12.2015)

1.8. Competitive Positions of the FedEx

ü Strong and large global network

FedEx has been in the marketplace for more than 40 years. It has established a huge network spread across more than 220 countries and territories worldwide. A network of this strength and size is difficult to replicate for any company. FedEx still continues to grow its network in ground services with various acquisitions.

ü Established brand value

FedEx has successfully established a very strong brand value in the marketplace and among its customers. The company is trusted for its reliability and timely package delivery services. This brand name has helped the company grow rapidly into a billion-dollar company.

ü Strong management

FedEx was built by a visionary and talented founder and CEO, Fred Smith. He built a company that changed the way logistics work across the globe. He has successfully managed the company during good and bad times.

These advantages give FedEx a competitive advantage. As you can see in the below figure, FedEx enjoys the third highest revenue among its competitors.

Figure 12:FedEx Competitive Advantage

Source:www.marketrealist.com

Figure 13:Comparing Revenues of FedEx and Its’ Rivals

Source:marketrealist.com

1.9. Social Media Coverage and Performance of the FedEx

In a connected world, the power of technology, transportation, information, and ideas compounds and multiplies. Businesses big and small create jobs that lift their communities. For people who are hungry for the education, goods, services and jobs that can improve their lives, a connected world is a better world.So, FedEx tries to adapt itself this changing business world and also use power of social media.

Figure 14:Social Media Reputation

Source: http://fedex.com.hypestat.com/

1.10. Digital Performance

You can see digital performance of Transporteca from above statistics which defined by www.alexa.com

Figure 15:How Popular is fedex.com?

Figure 16:Audience Geography

CHAPTER 2

2. General Information of Transporteca

2.1. Organizational Overview

Transporteca Limited is founded by executives from the logistics industry with the aim to improve the buying experience for businesses looking for transportation solutions. Transportation solutions differ on many parameters, such as timing, price, service, transit time and forwarder's proximity to shipper and consignee. The vision is to offer a web portal where customers can quickly get an overview of all the transportations solutions available, and make a selection matching their specific requirements.

2.2. Main Services Of Transporteca

Transporteca is a Danish startup offering automated pricing and online bookings of LCL with freight forwarders. The booking portal is currently limited to LCL shipping, but Transporteca is looking to expand to FCL and airfreight in the future.

Figure 17:Content Of Transporteca Service

Source:transporteca.com

2.2.1. How Transporteca Services Works?

Transporteca will be the first of its kind: an online booking portal where customers (small/medium businesses) can search for transportation options from freight forwarders and instantly compare prices and services from a growing database of providers. You can select the best match for your needs, book directly with a forwarder over the Transporteca site, and receive immediate confirmation.
This innovative concept should prove to be a success, as it fills a void that up until now has been missing from the bustling shipping industry. An online portal such as Transporteca will provide value to all involved parties and ensure that everyone wins. The customer wins by saving time and effort via the immediate access to a plethora of available forwarders; gone are the days of researching the market for who’s around and the delaying of shipments due to the untimely wait for quotes. Money is saved since the prices offered by various forwarders are visible in a list instantly generated on the portal, hence allowing the customer to ensure they could not have found a better price elsewhere.

Figure18:Transporteca Service Process

Source:www.transporteca.com

2.3. Number of Employees

According to Transporteca.com Customer Supporter’s information number of employees are given as 3.

Figure 19:Transporteca Office

Source: http://soefart.dk/?art=7308

2.4. Target/Potential Customers

Make booking for international transportation of goods are most likely painfully aware of how tedious and complex the process is. For many small businesses the struggle of locating a reasonable and efficient freight forwarder is all too familiar. A website giving shippers and consignees a much-needed tool to easily compare shipping and transportation prices from freight forwarders. The customer isn’t the only party benefitting from this new system the forwarder does as well. Freight forwarders often have difficulty accessing potential customers in regions where they don’t have sales teams. It is an online booking portal where associated freight forwarders can sell their LCL services to a global audience of potential customers. Transporteca thereby offers an increased online presence and potential for customers to find you and your services, even if they are located in areas where do not have sales teams today.

From a customer perspective, Transporteca offers visibility to services available in the market and lets customers choose the best match for their needs. It saves the customer time by allowing instant online booking and secure online payment.

Marten Laerkholm summarized their aim:

‘We want to make easier for small business to doing international trade and more interesting for freight forwarders to servet hem.’

2.5. Headquarters and Geographical Coverage of FedEx

The startup is Copenhagen-based where it’s headquarter located in and registered to Hong Kong and so far they focus only on moves from Asia to Denmark. But the service is rock-solid, and will hopefully include all locations soon.

Figure 20:Logo

Source:Transporteca.com

2.6. Income Model

Registering with Transporteca is free. Forwarders that partner with Transporteca do have to pay a small referral fee when they are booked. The fee, however, is typically less than the normal cost of sales for manual bookings, and is fixed in a percentage of the turnover the portal brings to the forwarder. The cost difference between a manual and Transporteca booking is 15 to 20 percent when other factors are taken into account. These include the time spent by the sales person, customer service follow up to get complete booking details, the cost of credit to cover the time between the booking and receipt of payment, and account receivable.

Figure 21:Income Model

Source:http://www.globalsources.com/NEWS/Transporteca-new-online-booking-portal-eases-LCL-shipping-woes-081913.HTM

2.7. Revenue:

Not available.

2.8. Competitive Positions of the Companies

The logistics business is not easy on the startups. It’s regulated. It’s hardware-driven (ships, rail, trucks, air). And there’s a reluctancy among the big players to change their business models.

Transporteca is one of the most promising logistics startups.It works with companies book their ocean freight logistics directly online. Online booking portal Transporteca increases proficiency and transparency in shipping.Their site is straightforward, secure, and promises fast, easy, and affordable quotes.These specifications gives competitive advantage but there are several rivals start up, as well.Such as; Freightos,IContainers,Freight Filter, Xeneta,Shippo,ShipHawk,Veritread etc.On the other hand , there are not only innovative logistics companies but also white shoe firms are still keeping serving in this area with multimillions assets,experiences,broad networks and powerfull brand names.

2.9. Social Media Coverage and Performance of the Transporteca

Figure 22:Social Media Reputation of transpoteca.com

Source: http://transporteca.com.hypestat.com/

2.10. Digital Performance of Transporteca

You can see digital performance of Transporteca from above statistics which defined by www.alexa.com

Figure 23:Global Rank

Figure 24:Totals Sites Link In

Figure 25:How Engaged Are Visitors to transporteca.com?

Figure 26: Search Traffic

CHAPTER 3

3. Comparison of FedEx Freight and Transporteca LCL

Although both of FedEx and Transporteca perform in same sector , they are really different from each other.You can see main differences between FedEx Freight and Transporteca on below figüre.

Figure 27:Main Differences Between FedEx Freight and Transporteca

4. CONCLUSION

Logistics is the beating heart of many industries that rely on supplies that are created in one location and used or sold in another. The globally intertwined economy necessitates that products be sourced cheaply wherever they are available and moved by land, sea, or air to the place where they can be used most profitably. There are lots of companies which give logistics services in different ways.

In this term paper I noticed that power of technology one more time.Because although both of FedEx and Transporteca perform in same sector , they are really different from each other. FedEx is a conventional logistics company which has an asset based approach. They perform different services in many areas with 340,000 employees and more than 220 countries. Their broad network and powerful brand names give them many advantages such as flexibility and reliabilty. On the other hand,Transporteca commenced as a start-up with the aim to improve the buying experience for businesses looking for transportation solutions.They have been using technology’s power , neither trucks,centers,lots of employees nor complex processes of shipment. Transporteca is an online pricing platform and highly automated booking process ensures a cost efficient and error free handling. This makes saves cost and time for both shippers and transport companies alike. As a matter of fact, both of companies have different characteristics and sources.But they are rivals due to the necessities of the time.

To sum up,in a connected world, the power of technology, transportation, information, and ideas compounds and multiplies.For this reason logistics companies should keep up with customers needs and technologies.

5. REFERENCES

FedEx Corporation Annual Report (2015)

FedEx Global Citizenship Report (2014)

FedEx Corporation Q2 Fiscal 2016 Statistics(December 16, 2015)

http://www.alexa.com/siteinfo/fedex.com (28.12.2015)

http://www.alexa.com/siteinfo/transporteca.com (28.12.2015)

http://fedex.com.hypestat.com/ (28.12.2015)

http://transporteca.com.hypestat.com/ (28.12.2015)

http://investors.fedex.com/investor-home/default.aspx (29.12.2015)

http://logisticsdegree.net/logistics-resources/#air (30.12.2015)

http://marketrealist.com/2015/06/key-analysis-fedexs-business-model/ (29.12.2015)

https://www.transporteca.com/ (29.12.2015)