MEMPHIS, Tenn. — FedEx says it will consolidate multiple companies into one organization to increase efficiency.
The consolidation will be made in phases and will be fully implemented by June 2024, the company said. It will bring FedEx Express, FedEx Ground, FedEx Services and other FedEx operating companies under the Federal Express Corporation.
FedEx says it is combining almost all of its ground, air and other operations in an effort to cut $4 billion in operating costs.
The Memphis-based shipping giant made the announcement in a press release Wednesday morning.
The company’s CEO says fewer flights means saving money.
“We are building a simplified experience for our customers, who are at the center of everything we do, so they can adapt to the market,” FedEx President and CEO Raj Subramaniam said. “This combination will allow us to provide customers with even greater value, offering the most advanced data-driven insights to help them make smarter decisions for their business.”
John A. Smith will become President and CEO of U.S. and Canada Ground Operations at FedEx Express and assume leadership of surface operations across the FedEx Express, FedEx Ground, and FedEx Freight businesses, the company said. Richard W. Smith will serve as President and CEO, Airline and International at FedEx Express, overseeing all other regions and FedEx Logistics.
The company also announced a 10% dividend increase per share.
One of the biggest impacts to Memphis is that point-to-point delivery will cut down on the number of flights FedEx uses to move packages.
Richard Smith, President and CEO, Airline and International at FedEx Express, said the company will change from a “fly-fly-fly model” for a lot of traffic, to a “much more economical truck-fly-truck model.”
FedEx employs more than 530,000, with annual revenues of $93 billion. In Memphis, the company employs some 30,000 employees at its corporate headquarters and world hub.
Last month, FedEx announced it was laying off 10 percent of its global officers and directors in an effort to reduce costs.