Federal Express Expands to Offer Variety of Delivery Options.

Federal Express, known for its overnight delivery, now offers a less expensive ground service for business clients.

Most people associate Federal Express with its slogan "absolutely positively has to get there overnight." But Federal Express has expanded well beyond overnight delivery and now offers other cost-savings delivery options.

FedEx Express, the worldwide leader in express transportation, has been present in Alaska since 1989. However, FedEx Express, which provides overnight service, is only one of five companies held by FedEx Corp. The others are FedEx Ground, FedEx Custom Critical, FedEx Logistics and FedEx Trade Networks. (OnlyFedEx Ground and FedEx Express operate in Alaska.) Last year FedEx Corp. earned $19 billion while undertaking a major realignment, which included renaming its holding company (formerly FDX Corp.) and each of its subsidiaries to include the FedEx brand name.

In June of 2000, FedEx's Alaska Operations welcomed FedEx Ground (formerly known as RPS Inc.) to the state. FedEx Ground is North America's second largest ground carrier for small packages. With this addition, FedEx increases its presence in Alaska and offers a cheaper shipping alternative.

Dennis Bird, managing director of FedEx Alaska Operations, has been involved in FedEx Express and FedEx Ground in Alaska since their inception. "When I arrived in 1989, there was only the concrete foundation," says Bird. In less than 10 years, increased air cargo traffic between Asia and the continental United States caused FedEx's Alaska operations to outgrow its package sorting space. With a major expansion in 1998, today's FedEx airport facility spans 330,000 square feet and has doubled both the work force and the volume of packages sorted. Fourteen to 18 aircraft arrive and depart daily.

FedEx Express is highly visible, being responsible for getting letters, packages and freight from point A to point B in 24 to 48 hours. FedEx Corp.'s menu of services recommends FedEx Express as "the best choice for shipments that must meet deadlines reliably and on time," while FedEx Ground provides cost-effective ground transportation. Bird describes the typical FedEx Express client as one whose package has time-sensitive contents like legal documents, bikes used in this past summer's Alaska AIDS Vaccine Ride or perishables like frozen fish.

"Fed Ex Ground picks up where FedEx Express leaves off," explains Peter Ricks, senior manager for FedEx Ground's new Anchorage terminal. Unlike express service customers, FedEx Ground's clients can afford a later delivery of three to five days. Typical clients include book distributors, computer manufacturers, greeting cards suppliers and convention attendees who send home their materials. Ricks notes the longer delivery time allows for lower costs.

Since 1992, FedEx Ground has provided northbound small package delivery from the Lower 48 to Alaska through contractors. However, with the Anchorage terminal, FedEx Ground adds southbound ground delivery from Fairbanks, Anchorage, Juneau and the Kenai Peninsula to the Lower 48. Also, Anchorage customers can ship packages within the state by FedEx Ground. Ricks expects to add FedEx Ground service to Ketchikan and Sitka this summer. The company initially planned to build a facility in Alaska. However, says Ricks, "we found an empty warehouse that suited our needs and this allowed us to open for business sooner."

Ricks reports that FedEx Ground has nearly outgrown its 7,700-square-foot facility (located off Dimond Boulevard and King Street) and will add a second site in the near future. The Alaska FedEx Ground terminal employs 15 to 20 staff, including independent contractors. All drivers are independent contractors who lease or purchase FedEx Ground's trucks. Outside businesses are already using FedEx Ground's "Returns Program" for their Alaska retail customers. The program allows manufacturers and suppliers to enclose with the original shipment a prepaid return bar code label in the event the retailer needs to return seasonal, damaged or defective goods.

In March of 2000, FedEx Ground nationally premiered a new business-to-residential service called FedEx Home Delivery. While FedEx Ground is a business-to-business ground small package carrier, Home Delivery provides exclusively residential delivery service. It developed in response to growing catalogue and on-line markets. Home Delivery service will begin operating in Anchorage by fall 2002. This new service allows customized delivery for evenings and Saturdays, as well as delivery by appointment to residences-without an additional charge.

Bird and Ricks explain the corporate philosophy as "operate independently yet compete collectively." While each of the FedEx companies serves a specific market, together they share certain standardized systems to enhance customer convenience. Both FedEx Express and FedEx Ground offer bar code scanning, en-route tracking and automated package sorting. The corporation recently consolidated sales force and customer service representatives to afford customers one-stop shopping. By spring, customers will enjoy the added convenience of consolidate invoicing with all FedEx services listed on one bill. Ricks gives a hypothetical example: A department store plans to sell 500 pairs of designer shoes. Its marketing department needs one pair immediately for display and advertising. The store can send that pair to Alaska via FedEx Express and the other 499 pairs via FedEx Ground. The store can track the shipments from the FedEx Web site and it will receive one invoice with all FedEx transactions listed.

Both Bird and Ricks enjoy the opportunities to tailor FedEx's brand of service and technology to Alaska's unique markets. As director of Alaska operations, Bird wears two hats: director of a FedEx hub between the Lower 48 and Asia and director of Alaska's express ground operations. This is unusual in a corporation that fosters specialization and normally separates oversight of a hub from that over domestic ground services.

"(In Alaska) we've proven it can work," says Bird. Ricks, who proposed the FedEx Ground Anchorage terminal and then relocated from Medford, Ore., to setup its operation says, "If there's one thing I'd like to change, it's the perception 'Well Alaska's different.' When it comes to shipping, Alaska doesn't have to be different than shipping in the Lower 48. We should be able to provide the same quality of service here. That's what I'm trying to work on."