FedEx is currently going through some lawsuits. The first lawsuit is that independent contractors wanted to be considered as employees and not as “entrepreneurs” working for the company. This would give the Entrepreneurs a sense of security but would limit their potential income considering they get paid per pick up and drop off and core zones. A majority of Drivers would prefer for this change not to come in effect. The second law suit was the railway act that occurred recently. UPS has lobbied for the government to review the Railway Act and change FedEx current stance on Unionization capabilities.
If this is processed and goes through it will permit Teamster (Union Reps) to unions the entire FedEx Ground Ltd versus location by location. Many do not want this to happen because it will be unionized and this would change the outstanding culture of the company, cost the company more money and remove power from management. Secondly, FedEx only uses vans and trucks, this puts limit on their expansion regarding transportation. This causes a dilemma for the company because they cannot further expand their company.
Thirdly, FedEx’s market share in western Canada is low because DHL is the industry leader in western Canada. In British Columbia, Vancouver, Alberta and Calgary most people are using DHL over FedEx. With low market share in the west FedEx losing profit because there are people sending packages from Toronto to Western Canada and receiving much less shipments in return. This is costing FedEx money because regardless of how many packages are in the trackers trailers the line haul drivers must be paid and gas must be consumed; causing the profit from those package to be even less.
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Lastly, FedEx Ground is dealing with weak internal communications between FedEx segments – FedEx has weak internal communications between each company segments. This is a problem because the wrong information is provided or in some in cases there are no information shared. Value Chain The value chain for FedEx Ground can be seen as starting with the pick-up of the packages. FedEx Ground employees gather the packages from various locations such as drop boxes, businesses and residences.
Value is created for the customers by making package pick-ups possible just about anywhere or anytime. FedEx Ground has a money back guarantee for those people, whose packages do not arrive on time, therefore creating value by assuring timely delivery of the packages. After the packages are initially picked up, they must then be transported to a hub. The hub is a central location where packages are sorted according to their destinations. The packages will likely pass through many hands before reaching their final destination.
The packages stay at the hub until they are picked up and shipped by truck. The package delivery is probably the greatest value creation activity for FedEx Ground. The drivers of trucks must perform their activities efficiently to increase the perceived value of the service. The drivers must absolutely no matter what, get the packages to their destinations on time, and they do a good job in doing so. By meeting and exceeding the customers’ expectations value is increased with each positive result. The final primary activity is customer service.
This function is to provide after sales service and support, however, FedEx Ground provides customer service during the use of the service by letting customers track their package while it’s in route. This creates extreme value for customers because they are able to check the status of their package at any given moment for an increased sense of security. Each of the primary activities is able to take place due to support activities such as company infrastructure, which is buildings, trucks etc. Information systems, another support activity, allow the customers to track their products and place orders on-line.
Materials management and human resources are additional support activities. Materials management can also be referred to as logistics, or the flow of goods or services through production into distribution. Overall, the support activities allow the primary activities to take place and function correctly. FedEx Ground has a competitive advantage with their information systems and possibly company infrastructure. Their advanced information systems allow for precise package tracking, which few other companies offer.
The customers can track their package by way of the Internet, without having to contact someone from customer service, which can be very time consuming. Other companies provide tracking numbers for packages but often times it is a hassle to track down a package. The massive fleet of automobiles and employee’s adding up to an enormous company infrastructure. This infrastructure allows FedEx Ground to have a very reliable delivery service. FedEx Ground is very confident with their time restricting package delivery service, they guarantee their packages arrive on time when the customer wants it delivered.
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