Despite sweeping disruptions impacting the global supply chain last year, FedEx Express Australia, has not wavered from its long-term strategy.
As a business its priorities remain the same as pre-COVID-19 — that is to support small and medium sized enterprises (SMEs) by making it easy for them to do business and grow, using both digital and human touchpoints.
For customers especially impacted by COVID-19, FedEx Express Australia, as the company is now known following the consolidation of operations with TNT in April, enables them to access newer opportunities and markets as they pivot their business models in the wake of the pandemic.
Part of the business recovery that FedEx is providing for SMEs is digital solutions as more and more companies move towards online transactions.
The onslaught of stay-at-home orders issued around the world over the past year, have accelerated growth of e-commerce, which has driven the digital transformation that was already well underway pre-COVID. This, in turn, has led to increased demand for air and ground deliveries.
“Due to our proactive planning and the ability to flex our network, we did not stop operating at any point during the pandemic and remain well positioned to support the global response to mitigate the spread of COVID-19, as well as the needs of our customers as they stayed home and shopped online,” says Peter Langley, FedEx Express Australasia Vice-President.
FedEx, for its part, helped ensure the delivery of critical medical supplies, personal protective equipment and other essential goods. As the pandemic forced many commercial airlines to reduce flights or even close entirely, this left only a limited number of passenger flights in operation.
It was one of many challenges confronting logistics and freight carriers like FedEx last year, especially at the height of the virus outbreak. Globally, there was a 73 per cent drop in passenger air cargo belly space between February and May 2020.
This led to significant capacity constraints across the entire industry, even as FedEx worked round the clock to respond to increased global demand. Proactive planning was critical.
FedEx continued to flex its Australian and global networks to create additional capacity necessary to respond to the needs of Australian customers and communities according to Peter.
“Owning our own cargo fleet has allowed us to increase the rotation of our flights to and from Australia, changing routes where needed to create efficiencies whilst keeping up with the latest border restrictions,” he says. “We were able to considerably scale up our weekly flights to Australia to keep supply chains moving during COVID-19.”
Safety is paramount at FedEx. All decisions on suitable suppliers of its commercial vehicles, whether these be Mercedes-Benz Sprinters or Renault Masters in the van space or Isuzu or Mercedes-Benz Actros in the light and heavy vehicle space respectively, are made on the basis of safety and the internal process control measures it has in place.
In accordance with this benchmark, the company currently purchases vehicles from several manufacturers who meet the specific requirements inherent in best optimising the application in use.
Its multi-faceted fleet comprises a majority of Pick Up and Delivery (PUD) vehicles, bulk delivery vehicles, semi-trailers and B-double units.
The PUD sector typically comprises smaller trucks, one tonner vans and a fleet of concept vehicles, where the driver of the vehicle can walk through to the cargo area from the driver’s seat instead of using the driver-side door.
These concept vehicles help the drivers select freight (some are fitted with shelving) and the driver can then alight from the passenger side door in the cargo area, down a step and safely onto the footpath, or at least out of most traffic situations. The concept vehicle project commenced in 2017 with the building of three units designed and built by Action Manufacturing in New Zealand.
Since those initial vehicles went into service improvements have been made to the original design and by 2019 a further 46 units were onboarded. The FedEx organisation has over 2,800 vehicles across Australia, with most of these TNT branded.
The recent integration of TNT in Australia has prompted the company to embark on the voluminous task of rebranding the many TNT vehicles to the new FedEx Express branding.
The business also operates a fleet of bulk delivery vehicles with carrying capacity of between six- tonnes and up to 14-tonnes.
Typically these are curtainsiders that predominantly carry pallets or simply large and bulky items like big flat screen televisions.
FedEx also has a number of semi-trailer and B-Double configured units, some also with adjustable mezzanine floors to enhance load utilisation, as well as providing superior freight security to mitigate against damage.
The larger stations also have ‘tug’ prime movers specifically designed for quick hitching and moving trailers around the facility for loading or staging once loaded. These are not designed for on road delivery or collection use.
An internal team is dedicated to overall fleet management explains Peter.
“All vehicle updates and replacements are decided on a scorecard method across the fleet,” he says. “The scorecard includes points for age, mileage and so on.”
Adopting a ‘safety above all’ approach, FedEx is serious about meeting its Chain of Responsibility (CoR) and Heavy Vehicle National Law (HVNL) obligations, right down to Manual Handling training and fatigue/break management.
Warm up exercises are also part of the overarching approach FedEx instills in all of its drivers.
“We have processes in place for the selection, assessment, onboarding and detailed training for drivers,” says Peter. “Elements of this training are also periodical. We also have guidelines to ensure that risks arising from vehicles and pedestrian interactions in the workplace are managed and minimised. This includes within stations as well as out on the road.”
As part of its compensation and benefits policy, the company’s People-Service-Profit philosophy ensures there are various initiatives in place for team members.
Specifically, for drivers, the company has productivity incentives. New fleet upgrades take place on a periodic basis to provide better safety, efficiency, reliability and comfort.
An operations team track different parameters including the number of deliveries on different routes and time taken. It’s here FedEx looks to improve efficiencies with regard to the volume of daily deliveries it makes.
“Route optimisation is an ongoing process and we also track run density improvements,” says Peter.
“As part of our retail delivery service offerings which have been considerably expanded to benefit our SME consumers – especially B2C ones – we are providing consignees more choices on how they receive their goods and this impacts deliveries as well.”
Globally, FedEx is committed to achieving carbon-neutral operations by 2040. To help reach this goal, FedEx is designating more than USD$2 billion of initial investment in three key areas: vehicle electrification, sustainable energy, and carbon sequestration.
Vehicle electrification, according to Peter, is a key step toward reaching this carbon neutral goal.
“By 2040, the entire FedEx parcel pickup and delivery fleet will be zero-emission electric vehicles,” he says. “This will be accomplished through phased programs to replace existing vehicles. For example, by 2025, 50 per cent of FedEx Express global PUD vehicle purchases will be electric, rising to 100 per cent of all purchases by 2030.”
FedEx will also continue to invest in alternative fuels to reduce vehicle and aircraft emissions. This level of commitment builds on a history of sustainable practices says Peter.
“Since 2009, the company’s efforts have contributed to an approximately 40 per cent reduction in CO2 emissions intensity across the enterprise while package volume increased 99 per cent during that period,” he notes.
In June 2020, FedEx operated 67 flights to and from Australia becoming the number one air cargo operator for the month, as per the Australia International airline activity report.
More tellingly, FedEx is optimising its multi-modal network by leveraging both its air and ground fleet to continue supporting customers in response to increasing demand.
In terms of pandemic-specific shipping volumes, since January last year, FedEx shipped more than 80 kilotons of personal protective equipment, including more than 2.2 billion masks worldwide.
FedEx has transported more than 10,000 COVID-19 humanitarian aid shipments throughout the world since the start of the pandemic.
During the crisis, FedEx has worked with federal and state governments, medical systems, and its customers to help communities across the country access critical supplies.
FedEx internationally is also an integral part of the global vaccine supply chain, delivering COVID-19 vaccines, related ingredients, and supplies to more than 25 countries around the world.
“All of us at FedEx are immensely proud to be a part of this historic relief effort,” says Peter. “This is among the most important work in the history of our company.”