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For Clifton Chua, Managing Director of FedEx Express for Hong Kong, Macau and the Philippines, going the extra mile for the customer is deeply ingrained philosophy. “Coming from the Central Bank of Singapore, I first joined FedEx as a financial analyst. I had always wanted to work for FedEx because while in university, the company was very often featured in case studies especially since it’s one of the Fortune 500 companies,” Chua explains. “So when the opportunity came, it was too good an offer for me to let go.”
But what he had initially thought was a simply pick-up-and-delivery business turned out to be a lot more complex than what appeared on the surface. “FedEx revolutionised the industry and pioneered the hub-and-spoke (distribution paradigm). The process may be linear from the customer’s point of view, but from the business side, it’s much more complicated than that.”
US Marine Fred Smith founded Federal Express in 1971 based on an idea he first had in 1965 as an undergraduate at Yale University. Smith wrote a term paper about the passenger route systems used by most airfreight shippers, which he viewed as economically insufficient and inefficient. He explored the need for a distribution system designed specifically for airfreight that could accommodate time-sensitive shipments such as medicines, computer parts and electronics. |
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Following a military stint in 1971, Smith bought controlling interest in Arkansas Aviation Sales located in Little Rock, Arkansas. While operating his firm, Smith immediately recognised the difficulty in getting packages and other airfreight delivered within one to two days, which then prompted him to do more research and develop an efficient distribution system. And thus Federal Express was created, a company that pioneered the hub and spoke model for overnight package delivery and revolutionised global business paradigms extending far beyond the express courier industry.
“FedEx has two key attributes: speed and reliability. It means that when people hear of the FedEx brand, they know of the impeccable service. But if you look closely at what really makes FedEx successful overall, there are three key factors,” Chua begins. “Firstly, we are actually the world’s biggest cargo airline with more than 647 aircrafts worldwide, so we have the infrastructure in terms of aircraft fleet as well as ground infrastructure in the form of a well thought-out planogramme for our hub-and-spoke operations.
“The second form of infrastructure is technology. People forget that FedEx was actually ahead of the times by more than a decade when we first launched our worldwide website. We were the first company that truly provided a business solution on the web. At a time when people were merely using the net as a source of information, FedEx had already begun to use it to provide the track-and-trace solution where customers can check on the status of their package in real time.”
What’s interesting to note was the seeming inability of other express courier services to keep up with the times and lag behind for so long. Or it could also have been FedEx’s continuing ability to keep its competitors at arm’s length that has served as the driving force behind this sustained leadership. “We at FedEx value our technology,” Chua asserts, adding, “It’s our cutting-edge asset and it’s what spells the competitive difference.”
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