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Press Releases
FedEx Completes Acquisition of Caliber System, Inc FDX Stock Began Trading
HONG KONG, February 4, 1998 -- Trading began in shares of FDX Corporation, the new holding company comprising Federal Express Corporation (FedEx) and Caliber System, Inc., following the recent consummation of the transaction. FDX Corp., a US$15 billion global transportation and logistics powerhouse, will offer a broad portfolio of services at a level of excellence unmatched by the competition. FDX companies' goal is to align their services through an automated "single point of access" for customers, using the most advanced technology systems in the industry.
"FDX Corp. will have an immense impact on the future of the transportation industry by setting a new direction for the way goods and services will be delivered," said FDX Corp. Chairman, President and CEO Frederick W. Smith. "Customers increasingly demand a complete, seamless solution to supply chain management needs on a global basis, and the FDX companies will be able to offer it," Smith added.
The world's leader in express shipping, FedEx, has joined with the Caliber System companies, recognized for their expertise in business-to-business ground transportation, logistics and distribution solutions. "This is a strong complementary fit; the whole can become greater than the sum of its parts," added Smith.
A Bright Future
The creation of FDX Corp., comes at an opportune time for the new shipping giant. With trends like "just-in-time" delivery, accelerated global sourcing and selling, and explosive growth in Internet-based commerce, FDX Corp. is uniquely positioned to capitalize on these developments.
The Colography Group, a leading research and consulting company, projects that expedited cargo revenue will climb to US$134 billion by 2007, nearly doubling the 1997 total of US$69.6 billion. Key findings taken from the Colography Group's recent survey of 100,000 shippers reveal that:
- Explosive demand for high value items such as personal computers, electronics and telecommunications equipment requires the use of high-speed, premium transportation to cut massive inventory costs, and to accelerate product deliveries to consumers. Proof of this is that inventory costs, when measured as a relative percentage of total distribution costs, have nearly doubled over the last 20 years.
- Fast, time-definite services also give companies more flexibility in managing their manufacturing and distribution programs, which reduces the risk of overproducing and having to divert excess products to warehouses.
A new brand of leadership
Today's business leaders are looking for a transportation company that offers: speed and reliability to serve markets locally and globally; advanced information systems that automate and streamline the supply chain; and logistics and electronic solutions that bring results to the bottom line.
FDX companies' goal is to provide such services to customers through an automated "single point of access" by aligning the most advanced shipping automation and electronic commerce technologies in the industry. The sales forces and marketing arms of each company will collaborate to offer customers diverse solutions.
Starting today, via the Internet, customers can track the status of either FedEx or RPS packages through both companies' Web sites. Later this year, customers can look forward to the rollout of a newly developed FDX automated shipping device with enhanced access and functionality covering the full range of services provided by FedEx and RPS.
All six FDX companies will be operated and managed independently with a shared vision of providing cost effective, reliable and innovative shipping and logistics solutions. "We've been studying the express and routine transportation markets for 25 years, and I'm convinced that they are distinctly different, each requiring complete focus and dedicated expertise to maximize productivity, customer service and cost-competitiveness," added Smith.
FedEx currently serves more than 30 countries and territories in the Asia Pacific market with approximately 4,500 employees. The company provides the most extensive trans-Pacific air lift of any major competitor. Operating its own wide-bodied MD-11, DC-10 and A310 aircraft, FedEx offers over 250 flights per week to the following locations: Bangkok, Beijing, Hong Kong, Kaohsiung, Kuala Lumpur, Manila, Osaka, Penang, Seoul, Shanghai, Singapore, Subic Bay, Taipei, and Tokyo, as well as destinations in the U.S. Federal Express connects areas that generate 90 per cent of the world's gross domestic product in 24 to 48 hours with door-to-door, customs-cleared service and a money-back guarantee. The company's unmatched air route authorities and infrastructure make it the world's largest express transportation company, providing fast, reliable and time-definite transportation of 3 million items in 211 countries each working day. FedEx employs approximately 140,000 people and has more than 43,000 drop-off locations, 600 aircraft and 39,500 vehicles in its integrated global network. The company maintains electronic connections with more than 850,000 customers via FedEx PowerShip®, FedEx Ship®and FedEx interNetShipSM. Federal Express reported revenues of US$11.5 billion for its fiscal year ended May 31, 1997.
FDX CORPORATION FACT SHEET
FDX Corporation and its network of six principal independent operating companies include:
- the largest and most powerful express network in the world (FedEx);
- the second largest business-to-business small package ground service in North America (RPS, Inc);
- the largest surface expedited service in the world (Roberts Express, Inc.);
- the leading LTL carrier in the western United States (Viking Freight, Inc.); and
- innovative logistics and warehouse management, order fulfillment firms (Caliber Logistics, Inc. and Caliber Technology, Inc.).
Executive Appointments
Frederick W. Smith will service as Chairman, President and CEO of the new holding company. Joining him at FDX Corp. are:
- Alan B. Graf Jr., Executive Vice President and CFO;
- Kenneth R. Masterson, Executive Vice President, General Counsel and Secretary;
- T. Michael Glenn, Executive Vice President, Market Development and Corporate Communications;
- Dennis H. Jones, Executive Vice President and CIO; and
- Joseph C. McCarty, Corporate Vice President and Chief Adminsitrative Officer.
At FedEx, David Bronczek, a 25-year veteran of the company, has been named President and Chief Executive Officer. Daniel Sullivan becomes President and Chief Executive Officer of RPS. At other operating companies, the following Presidents have been named: Roberts Express, R.Bruce Simpson; Caliber Logistics, Thomas I. Escott; Caliber Technology, Gerald A. Long; and Viking Freight, Rodger G. Marticke.
The Transaction
Shareholders of both companies have approved this transaction. Shares of Federal Express stock will be automatically converted into shares of FDX Corp. on a share-for-share basis. Caliber stockholders will receive 0.8 shares of FDX Corp. stock in exchange for each share of Caliber stock they own. The competition approval process has been completed on both a domestic and international level.
FDX Corp. derives all of its revenues from its principal operating companies. FDX companies combined employ approximately 170,000 people.
The FDX Companies
FedEx invented express distribution 25 years ago and remains the industry's global leader, providing rapid, reliable, time-definite delivery for more than 211 countries, connecting markets that comprise 90 percent of the world's gross domestic product. Unmatched air-route authorities and transportation infrastructure make FedEx the world's largest transportation company, that handles nearly 3 million shipments each business day.
RPS, Inc. is North America's second-largest provider of business-to-business ground small-package delivery services. RPS also provides service to Puerto Rico and 28 European countries. Like FedEx, RPS is a pioneer in applying advanced technology to meet customer information needs.
Roberts Express, Inc., the world's largest surface expedited carrier, offers nonstop, time-specific door-to-door delivery (with a guarantee) of time-critical and special-handling shipments with the U.S., Canada and Europe. In keeping with the core competencies of FDX, Roberts' point-to-point surface and air-charter delivery solutions are driven by sophisticated and proprietary shipment-control technology.
Viking Freight, Inc. is the leading regional freight carrier in the western United States, offering premium next-and second-day less than truckload freight services to 11 states, along with direct steamship service to Alaska and Hawaii.
Caliber Logistics, Inc. & Caliber Technology, Inc. design, develop and apply integrated logistics and technology solutions that provide a competitive edge for customers worldwide. Services include transportation management, dedicated contract carriage, intermodal transportation, dedicated and shared warehousing, order fulfillment and value-added services such as kitting, subassembly and returnable containers management.
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