Fedex steps up in year of COVID-19 concerns
The pandemic, e-commerce and more have defined 2020 for the company
Fedex transformed its operations in 2020 as the COVID-19 pandemic upended regular life.
Governments, communities and consumers called on Memphis-based Fedex to deliver COVID-19 safety supplies, life-saving vaccines and a flood of online orders. All the while, thousands of Fedex employees have had COVID-19 and several have died from the disease.
Here are the key developments that defined Fedex’s past year.
Delivering relief
Throughout 2020, Fedex used its massive shipping network to deliver supplies in the fight against COVID-19.
In January, Fedex Express shipped more than 200,000 surgical masks and protective gear to China to help responders early in the coronavirus outbreak.
Fedex then worked with the U.S. government after the coronavirus began spreading within the country. In March, it helped the U.S. Air Force distribute COVID-19 testing swabs from Memphis to medical facilities throughout the United States. On April 8, Fedex announced it was part of a U.S. effort to expedite shipments of protective equipment and other supplies via the public-private partnership Project Airbridge.
“As a result of (Fedex employees’) dedication and commitment to the communities we serve, we have delivered over two billion face and surgical masks, 55 kilotons of personal protective equipment, and over 9,600 humanitarian aid shipments to support the global response to COVID-19 to date,” Fedex Express executive Richard Smith said Dec. 10 during a U.S. Senate subcommittee hearing.
Four days after Smith’s remarks, Fedex completed its first COVID-19 vaccine delivery. The delivery of the Pfizer and Biontech vaccine was made to a Massachusetts hospital.
Since then, Fedex has been moving doses of both Pfizer and BionTech’s vaccine and Moderna’s vaccine throughout the country.
“As we have said since the onset of the pandemic and our relief efforts, this is who we are and what we do,” Fedex President and COO Raj Subramaniam said in a statement.
Facing COVID-19
Fedex’s frontline employees kept vital supply chains moving throughout the COVID-19 pandemic, and many have fought the disease themselves. The company disclosed in September roughly 8,500 of its employees have had COVID-19, about 1.7% of its workforce at the time.
In April, workers at the Fedex Express World Hub in Memphis raised concerns about social distancing enforcement and a gap in temperature checks prior to hub entry.
Multiple Fedex employees have died from the disease, including at least five workers at the company’s Newark hub. The deaths followed allegations that Newark hub workers hadn’t been notified of positive cases or received delayed notice that they had contact with a Covid-19-positive colleague.
U.S. Sen. Cory Booker said he was “deeply troubled by reports” about the Newark hub and demanded Fedex do more to keep employees safe. Executives told Booker that some of his claims “reflect an unfortunate misunderstanding of Fedex policies and procedures for dealing with the COVID-19 situation.”
Fedex Express pilot Paul Fox died from COVID-19 complications in April. The union representing Fedex pilots said in November its members are “strained like never before” and noted rising case numbers among its ranks.
Throughout the year, Fedex said employee safety is its top priority and detailed extensive safety measures it has taken to keep them healthy. This includes temperature checks before entering facilities, providing protective gear and masks for workers and promoting social distancing.
The company also diverted package volume from its Newark hub and said it has “a robust health self-monitoring program” for its pilots.
Package volume
COVID-19 and related shutdowns kept people at home, shifting consumer traffic from physical stores to retail websites.
More online orders led to more home deliveries for Fedex. The amount of packages it handled soared, with the main beneficiary being the ecommerce-focused Fedex Ground.
From June 1 through Nov. 30, Fedex Ground saw average daily package volume increase 30% from the same period in 2019. Fedex said in a September regulatory filing there was “unprecedented demand for our residential delivery services, rivaling our peak holiday season traffic.”
Fedex expects 2020 holiday volumes to break records, naming the busy stretch the “Shipathon.” It hired 70,000 new employees to help handle the unprecedented surge of packages.
Fedex Express, Fedex’s largest company, has also fared well in 2020 after a string of disappointing quarters due to a slowing global economy. With many passenger planes grounded amid the pandemic, more businesses turned to Fedex’s cargo jets to deliver their goods on time.
High demand for Fedex’s services led to impressive quarterly earnings results throughout 2020, and its stock price reached record highs. The company’s most recently reported quarter also delivered strong results, but increased expenses preparing for the peak season concerned Wall Street and slowed the stock’s momentum.
Collaborations
In 2019, Fedex and Amazon ended their two major shipping contracts. In 2020, Fedex detailed a bevy of new team-ups with outside companies, including some household names.
Fedex and Microsoft announced a multiyear collaboration in May, with the companies working together on product development and sharing expertise. The first service the two are offering is Fedex Surround, which will let customers track inventory activity and areaspecific developments.
“So if you’ve got five pieces of inventory in Ohio and it’s not selling, you will know that inventory is selling in the Bay Area or (Los Angeles) and can move the merchandise there and have a much more efficient and high-turn sales and fulfillment process,” said Fedex Chairman and CEO Fred Smith in a video discussion with Microsoft CEO Satya Nadella.
Another tech-forward collaboration revealed in November takes advantage of Fedex’s immense physical infrastructure. Fedex, Dell Technologies and data center company Switch’s new initiative will see small technology hubs housed at locations throughout the delivery giant’s network.
The hubs provide stronger computing power for customers, and Fedex will be the first user. Chief Information Officer Rob Carter said the initiative will support Fedex’s growing technological needs.
Fedex also launched partnerships this year to make customer returns easier. Fedex Office and Los Angeles-based Happy Returns entered an agreement in which Happy Returns offers in-person return services at most Fedex Office locations.
The returns are boxless and label-less, with a customer bringing both the item and a provided QR code into a Fedex Office location for the return.
Two months later, in the thick of the holiday returns season, Walmart detailed a new service called Carrier Pickup by Fedex. The service provides free returns for items shipped and sold by Walmart.com, with Fedex picking up an unwanted item at a scheduled time.