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FedEx Archives: 1997 Press Releases

( BW)(FEDERAL-EXPRESS)(FDX) FedEx Announces Additional Steps to Manage Increased Package Volume During UPS Strike

Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--Aug. 6, 1997--Federal Express Corp. today implemented additional temporary measures in the interest of providing the best service possible to its regular customers and managing the dramatic amount of increased volume from new customers because of the UPS strike. At current operating levels, FedEx's integrated global network is stretched to its limits, although its 130,000 employees are working around the clock to meet the challenge.
Until now, FedEx has managed and controlled the increased volume, given the circumstances. As the strike continues, however, UPS customers are trying to switch more business to Federal Express. As a result, there may be volume-related delays, particularly on the company's deferred services, such as its time-definite two and three day services. This is the segment of FedEx business experiencing the largest increase as customers look for alternatives to non-time-definite UPS parcel services.
The following measures are effective today: -- Cutoff times for drop boxes will be moved to three hours earlier, and further adjustments may be needed. Cutoff times at FedEx World Service Centers already have been moved at least two hours earlier. Customers are encouraged to bring their packages early in the day and doublecheck the latest cutoff times at the location where they regularly leave their packages for any further changes. -- Pickups at customer locations already have been moved at least two hours earlier. -- Regular FedEx customers can ship only 10% above their average daily volume or up to 10 extra packages, whichever is greater, depending on local market conditions. -- There will be no on-call pickups for callers without existing account numbers. -- Customers without a FedEx account number must drop off packages at a staffed FedEx drop-off location and are limited to five packages per customer daily. -- FedEx will not accept cash but will continue to accept checks and credit cards. -- All C.O.D. shipments will be held at the nearest FedEx delivery location for pickup by the recipient. -- New accounts are not being opened in the U.S. until the UPS strike is resolved. -- As announced previously and as provided in our Service Guide, until further notice, the money-back guarantee will be suspended for all services except intraAsian FedEx International Priority Service, intraEuropean FedEx International Priority Service and domestic Canadian services.
"For 25 years, FedEx has been in the business of saying `yes' to customers. Telling potential customers that we can't accept their packages is one of the most difficult things our employees have ever had to do," said Alan B. Graf, Jr., executive vice president and chief financial officer, Federal Express. "We recognize that some customers are experiencing problems as a result of the strike, and we wish we could do more to accommodate their needs."
FedEx employees are working around the clock to meet this challenge, including thousands of employees who are volunteering their services; however, FedEx may be forced to further limit its ability to meet customers' needs as some current employees reach limits prescribed by the Department of Transportation on the amount of time they can work.
Federal Express is the world's largest express transportation company, providing fast and reliable services for more than 2.8 million items to 212 countries each working day. The company employs approximately 130,000 people, has nearly 43,000 drop-off locations, and operates more than 580 aircraft and 38,000 vehicles in its integrated global network. FedEx maintains electronic connections with more than 650,000 users via FedEx Powership(R), FedEx Ship(R) and FedEx interNetShip(SM). Federal Express reported revenues of $11.5 billion for its fiscal year ended May 31, 1997.
Background Information Express versus Parcel Post -- It is important to understand the difference in the express business and parcel post delivery. Customers turn to FedEx because they expect speedy, time-certain, and reliable service, and tracking information; increasingly their packages are being shipped globally. -- That is not UPS' primary business. Less than 1/6 of their packages fall into that category. More than 80% of UPS packages are traditional parcel post. That is defined generally as delivery with no firm commitment date for delivery; delivery can take anywhere from one to six days -- sometimes longer. This service offers no guarantees and is priced most cheaply. Their average daily volume for the parcel post market is estimated at 13.8 million packages a day. Federal Express does not serve this market. We must focus and provide service for the business we're in. Important Differences in Now and Peak Season -- Customers have a choice of carriers during the holiday peak season. In addition, FedEx has the benefit of 25 years experience and sophisticated data about shipping patterns during the holidays. We develop contingency plans over an 11-month period and talk with customers about their anticipated needs. -- The UPS strike is unprecedented. In this situation, we are dealing with UPS customers and handling a segment of the market that we do not traditionally handle. -- The only thing similar to the current situation and peak season is the amount of volume. Employees Working Around the Clock -- We have been placed in a situation that is counter to our culture. It is extremely difficult for our employees to have to turn some potential customers away. Our employees have been hired and trained to go above and beyond the call of duty every day for our customers. -- We must be honest with the American public about what our system is able to handle as a result of the UPS strike so that we do not set unrealistic expectations. This is precisely why our hours of operation have been adjusted and customer shipments have been limited. -- We're all in this situation together, and we'll continue to go above and beyond for customers. All of our employees are working around the clock to try to handle this influx in volume. FedEx Hopes for Quick Resolution of Strike -- We continue to hope that this strike between the Teamsters and UPS is over soon. --30--md/na* CONTACT: FedEx Media Relations, Memphis 901/395-5007 KEYWORD: TENNESSEE INDUSTRY KEYWORD: TRANSPORTATION http://www.fedex.com Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page. URL: http://www.businesswire.com