Global logistics: New FedEx offering focuses on DC bypass and reducing time-to-market costs
Jeff Berman, Group News Editor -- Logistics Management, 2/9/2010
MEMPHIS-FedEx recently announced it has rolled out a new service, which, it said, provides shippers with a more efficient method for importing goods.
Dubbed FedEx International DirectDistribution, the company said this service essentially consolidates multiple packages-or freight-into one shipment for clearance through Customs, as well as bypass distribution centers and reduce time to market costs.
Company officials said FedEx International DirectDistribution combines the forwarding and customs compliance expertise of FedEx Trade Networks and the reliability and efficiency of the FedEx global network to the multimodal distribution market, as well as allow shippers to choose modes of transportation-air, surface or ocean-to meet their transit time needs.
In an interview with LM, Raj Subramaniam, senior vice president, international marketing for FedEx, said that FedEx is committed to giving customers access to the services they need to successfully grow and compete within a dynamic and constantly changing global market place.
"Offering a robust distribution service portfolio is one of the ways we can help customers streamline their supply chains, reduce costs and improve speed to market," he said. "With FedEx International DirectDistribution, FedEx has bundled together the capabilities of our FedEx networks to meet the flexible and changing needs of our customers. A great deal of research and planning went into the development of this portfolio, as with all of our portfolio launches."
When asked what the biggest benefits of this service are for shippers, Subramaniam explained that one of the major benefits is that shippers can bypass distribution centers which reduce the time in getting their product to market. These solutions, he noted, will also reduce the number of hand-offs and eliminate redundant paperwork.
Our customers will see cost savings on clearance fees that are gained from consolidating their shipment. The customer will also see cost savings from lowering inventory carrying costs," according to Subramaniam. "FedEx International DirectDistribution eliminates the extra steps involved with multiple warehouses and vendors and reduces transit times by keeping inventory moving."
On a company level, the direct distribution market presents a large growth opportunity for FedEx, said Subramaniam. He said that research and trends show this market will continue to grow as shippers seek more sophisticated supply chain solutions while looking for ways to further reduce costs.
"We will leverage the resources and capabilities of the various FedEx networks to develop solutions that will further contribute to the overall bottom line for FedEx," he said. Another key observation is that internationally is the space in which we are seeing the most robust growth opportunity. As consumer demand grows in markets like China, India, Mexico, Brazil, among many others, it will become even more important to offer distribution services that meet the needs of global customers."
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