Managing Risk At FedEx
Express
Bill Logue
EVP & Chief Operating Officer, Express U.S.
October 9, 2008
Topics
 Size & Scope of Express Network
 Our Business Planning Structure
 How We Plan The Shape & Form Of Our
Network
 Daily Operational Execution
 Disaster Relief & Business Continuity
Managing Risk At FedEx
Express
Oct. 9, 2008
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About FedEx Express
 Time-definite delivery to 220
countries and territories worldwide
and every address in the U.S.
 Average daily volume of 3.4 million
packages
 1,503 daily flight departures
 672 aircraft
 43,900 motorized vehicles
 131,000 employees
Managing Risk At FedEx
Express
Oct. 9, 2008
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Domestic U.S. Operating Divisions
Division
Responsibility
U.S.
Operations
• Pickup / Delivery
• Retail Operations
• Vehicle Maintenance
Air Ground
Freight Services
• Hub Operations
• Ramp Operations
• Express Freight
Air Operations
• Crew Resources
• Safety / Regulatory
• Aircraft Maintenance
• A/C Engineering
Managing Risk At FedEx
Express
Oct. 9, 2008
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Risk
 Risk is the potential for loss
caused by an event (or series of
events) that can adversely affect
the achievement of a company’s
objectives.
 Organizations that are most
effective and efficient in managing
risks to both existing assets and
to future growth will, in the long
run, outperform those that are
less so.
Deloitte, Risk Intelligence Series
Managing Risk At FedEx
Express
Oct. 9, 2008
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Risk Management Starts With Our Business Planning
Process
Global
Strategic
Plan
Long Range
Outlook:
Six Year
View
• Business Baseline
& Interpretation
• Forecast U.S. &
International Volume
• Hypothesis
Testing
• Capacity Plan: Aircraft,
Vehicles & Facilities
• Identify / Evaluate /
Prioritize
Initiatives
• Operating Plan:
Flights, Manpower,
Operating
Requirements
Divisional
Operating Plans
Annual
Fiscal
Year
Start
June 1
• Execution
• Capital & Expense
Plan
Managing Risk At FedEx
Express
Oct. 9, 2008
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System Form Planning
 Long Range Planning: 1 – 5 yr
 Business Planning: 9 - 15 mo
 Current Scheduling & Operational
Planning: present - 6 mo
“Satisfy service requirements based upon forecasted volume”
Managing Risk At FedEx
Express
Oct. 9, 2008
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Daily Operational Control & Risk Management
 Daily operational oversight resides in
our Global Operations Control (GOC)
Center
 GOC exercises command and control
of the FedEx Express linehaul system.
 GOC is the highest level of command in
our system, monitoring our worldwide
line-haul and implementing emergency
and contingency action plans as
necessary.
 Daily!
Managing Risk At FedEx
Express
Oct. 9, 2008
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Disaster Relief – Event Management
 FedEx among worldwide first responders
to catastrophes:
– Tsunami relief in Southeast Asia
– Earthquake Relief in South Central Asia and
South America
– Alliances with relief agencies, including Red
Cross and Heart to Heart International
Managing Risk At FedEx
Express
Oct. 9, 2008
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Business Continuity
DRACO (Disaster Recovery and Contingency Operations)
 Consolidating all Business Continuity and Disaster Recovery
under one umbrella
 Major Components
 Airport Reconstitution
 Hub/Operations Reconstitution
 Contingency Aircraft and Truck Schedules
 IT System Reconstitution
 Infrastructure Plan
– Safety Issues
– Security Issues
Managing Risk At FedEx
Express
Oct. 9, 2008
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Managing Risk Is What We Do
Managing Risk At FedEx
Express
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Supply Chain Risks
 Fuel
–Price
–Availability
 Economic Disruption
 Geopolitical (regional)
 Terrorism
 IT Network
 System Replication/Duplication
Managing Risk At FedEx
Express
Oct. 9, 2008
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Open Discussion
Questions?
Managing Risk At FedEx
Express
Oct. 9, 2008
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