FedEx Announces New Supplier Relationships for Vehicle Fleet

Business Wire, May 19, 1995

MEMPHIS, Tenn.--(BUSINESS WIRE)--May 19, 1995--Federal Express Corporation (NYSE:FDX) announced today it had entered into a series of agreements with eight manufacturers to supply key components for its vehicle fleet. The terms and conditions of the agreements were not disclosed.

The companies selected, and the key products they will supply, are as follows:

Cummins Engine Co. Engines

Freightliner Corporation Tractors

Goodyear Tire and Rubber Corp. Tires

Morgan Corporation Van Bodies

Rockwell International Drive Trains

Silver Eagle Manufacturing Co. Converter Dollies

Utilimaster Corporation Walk-In Body Units

Wabash National Corporation Trailers

These eight companies will provide vehicles for FedEx's over-the-road, shuttle, and freight pick-up and delivery fleets. The small package pick-up and delivery vehicles are covered under other agreements. The company currently operates 35,000 total vehicles; these fleet additions are required to meet growth requirements as well as for replacements of existing vehicles. Package growth has averaged over 15 percent in the current fiscal year.

"We are pleased with the outstanding team of suppliers we have assembled for this strategic acquisition," said Tracy Schmidt, senior vice president of Air Ground Terminals and Transportation. "This positions us well to meet our future vehicle fleet requirements."

"We continue to grow at double-digit rates, and our vehicle fleet must keep pace with this growth," said Mary Alice Taylor, senior vice president for The Americas and Caribbean, the division which operates much of the massive small package pick-up and delivery fleet.

"These companies were selected because of their proven track record in the industry for quality, value and reliability," said Lynn Gorman, vice president of Vehicle Maintenance, whose organization will maintain the fleet and manage the vendor relationships with the eight suppliers. "These are qualities that have become synonymous with FedEx and we look forward to working with these outstanding manufacturers."

In the past, FedEx has purchased vehicles from several separate suppliers. This new approach represents the first time the company has coordinated the activities of multiple suppliers in adding custom-designed vehicles to its fleet.

"This is an excellent example of FedEx's quality approach in building strategic relationships with our suppliers," said Schmidt. "We have a significant capital investment in our vehicle fleet, and these new relationships will help us achieve an excellent return on this investment and drive down our costs per mile over the life of the vehicles."

Federal Express is the world's largest express transportation company, providing fast and reliable services for important documents, packages and freight. The company delivers more than 2.2 million items in 193 countries each working day. It employs 108,000 people and operates 484 aircraft and 35,000 vehicles in its integrated system. Federal Express reported revenues of $8.5 billion for its fiscal year ended May 31, 1994, including $2.3 billion in international revenues. FedEx employees drive more than 2.5 million miles per day.

CONTACT: Federal Express Corporation, Memphis

Tom Martin, 901/395-3490

Shirlee Finley, 901/395-3463