Please note! This essay has been submitted by a student.
Logistics and shipping industry in the world plays a significant role in connecting businesses and individuals around the world to make the operations successful. In terms of size, the global logistics market is a 10.32 billion US dollar industry based on data evaluated in 2017. Future predictions estimates that logistics and shipping market is expected to grow to 12.68 billion USD by the year 2023 with a compound annual growth rate of 3.49% between 2017 and 2023. Ideally, logistics involves activities that involves shipping and transportation operations that help businesses, corporations, and individuals around the world to transfer suppliers or information from one region to another and facilitate their operations.
In terms of technology, logistic and shipping industry faces the developments such as warehouse robotics in supply chain to improve cost efficiency, autonomous transportation is also becoming a reality with Amazon leading the way with drones delivery as a pilot to test the trend, and the distinction between logistic services and technology services is also becoming thin each day since tracking and security services required in logistics are deeply embedded in technology. Additionally, the internet of things and data analytics are also driving significant change in the logistic industry as more and more companies turn to prefer data driven decision making. The rise of other online-based logistic firms such as Amazon, eBay, Alibaba also motivates change in the industry. Appendix 1 shows the PESTEL analysis to describe the environment where FedEx operates.
FedEx Corporation is a logistic and shipping firm that started operations in 1997 in Delaware. It provides wide range of logistics and shipping services to businesses and government institutions. The services include transportation, e-commerce, and outsourcing of logistic services. As one of the leading global player in provision of express delivery and shipping services, FedEx has exhibited a robust financial performance in the industry due to its strategic decisions to invest in technologies and strengthen its brand significantly.
Today, FedEx offers its services in about 220 countries around the world and the year 2018 saw the firm’s revenue increase by about 9% from $60,314 million in 2017 to $65,450 million in 2018. Apart from investing in cutting edge technology to increase distribution efficiency, FedEx has an excellent customer service that attracts consumers.
The firm we expect to sell logistics services is Magna International. Magna is a technology firm that supplies automotive industry players with parts to make vehicles and other automobiles. For nearly 60 years, Magna international has played a leading role in the automotive industry the using technology to advance cutting edge products.
In terms of size, Magna has manufacturing operations presence spreading 27 countries thus affirming the position of the company as a significant automaker in the world. The firm has 340 manufacturing operation bases, 89 bases to conduct its product development, and expand its engineering. FedEx is willing to provide logistics services to Magna International to manage its supply chain operations to ensure that Magna continues to concentrate in engineering, which it does best.
Such a high profile logistics operations and partnership between FedEx and Magna will have to be directed by the chief Executive officer Magna to ensure the terms of the contract are favourable to both parties. Whereas the supply chain personnel at Magna International will have much of responsibility to suggested whether FedEx logistics services are quality, the final decision rests with the CEO. FedEx seeks to enhance supply chain operations of Magna International by ensuring that it gets raw materials for timely production and customer satisfaction in ways that enhance the overall manufacturing efficiency at Magna.Service
Product/ Service Information:
FedEx has invested heavily in its operations to provide quality logistic and shipping services to the consumers. From the information in financial statement, FedEx sales revenue have shown steady increase since 2016 as shown in figure 1.
Based on the above data, it is evident that the product the sales of logistic services by FedEx is on an increasing trend. FedEx offers after sale service such as advice and practical services. The after-sale services include repair and return of defective items, box swap, and green logistics by ensuring the packages comply with environmental regulations . Services of FedEx can be access online through the company websites and ordered. Sale representatives in a specific region dealing with a specific market segment are available to help with the guidance. However, FedEx has to design its pricing in ways that manage the competition in the environment from actors such as Amazon, eBay, Alibaba, Ups, and others.