In a remarkably candid Dec. 23 interview with Bloomberg, FedEx Corporation (NYSE: FDX) Founder, Chairman and CEO Frederick W. Smith said that he will consider retiring only after the company's current downtrend is reversed, and that he has anointed Rajesh Subramaniam, FedEx's president and COO, to succeed him. Smith said it would be up to FedEx's board to determine if his dual positions will be separated. The board will have the final say on all such major decisions. However, FedEx is arguably the most privately held public company in America.
Besides being the founder, Smith, 75, is its third-largest shareholder and has the chairman's job for as long as he wants it after a governance change in January that allowed non-management board members — of whom Smith is one — to remain beyond the mandatory retirement age of 75. Smith told Bloomberg that he expects FedEx's fortunes to brighten by spring, an ambitious timetable given how bad its recently released fiscal 2020 second-quarter results were.
Then there is the question of whether Subramaniam, a marketing executive thrust into the top day-to-day job as well as its lead operations role in February upon the abrupt retirement of David Bronczek, has the board's confidence to be tapped for a post even bigger than his current one. The executive to watch, in our view, is Richard Smith, one of the elder Smith's sons. In his early 40s, Richard Smith has in less than 14 years at FedEx been elevated to the No. 2 job at FedEx Express, its largest unit. Smith is a good bet to succeed Donald F. Colleran as the unit's top man, and is being groomed for even bigger things at the "family biz."
Did you know?:
More than 9,300 retail stores will have closed in 2019, well above the all-time record of 8,069 set in 2017, according to research firm Coresight. That compares with 5,844 store closings in 2018.
"I put fuel in my truck out of my own pocket to make the delivery."
— Jodi Morgan Beach, a driver for shuttered trucker GDS Express, in an interview with Trucker News while heading home to Pennsylvania after hauling a FedEx load bound for Columbus, Ohio. Beach received the company's closure notice while in Illinois.
In other news:
Emirates Air president to retire
Sir Tim Clark, who built the airline from two-planes to a 270-plane fleet and played a key role in establishing Dubai as a major transshipment hub, will retire in June. (Simple Flying)
Kalanick to leave Uber board
Turkey unveils national logistics plan
The $110 billion "Logistics Master Plan" is designed to turn Turkey, which straddles Europe and Asia, into a major hub. (Hurriyet Daily News)
Alibaba pours more money into Indian startup
Chinese e-commerce giant Alibaba Group Hoolding (NYSE: BABA) has invested $10 million in Indian logistics startup XpressBees, Alibaba's second go-round following a $35 million investment in 2017. (Business Standard)
Saving Christmas for Kansans
A postal carrier in Osawatomie, Kansas, spotted smoke coming from his mail truck. After pulling to the side of the road and realizing the fire was spreading fast, the carrier got all the parcels out safely (CNN).
Five years ago, retail giant Target Corp. (NYSE: TGT) was in trouble. It was perceived to be slow in making the transformation to e-commerce. It was seen as not being as big and deep as Walmart Inc. and not as nimble and disruptive as Amazon.com, Inc. It experienced turmoil atop its logistics personnel food chain. And it faced what was, at the time, perhaps the most damaging security breach ever to hit a customer-facing business. As 2019 ends, Target has more than regained its mojo. After the company reported the best results in a decade last year, sales and earnings have exceeded analysts' estimates throughout this year.
Target's share price has doubled this year. Much of the credit goes to CEO Brian Cornell, who steered Target through the "retail apocalypse" by recognizing that the path to relevance lay, to a large degree, with beefing up its distribution system. Target acquired Shipt in late 2017 in what would become its platform to expand into same-day delivery.
More importantly, Target has been at the vanguard of repurposing its physical stores as fulfillment centers. Cornell told CNN Business — which has named him its CEO of the year — that nearly all of its 1,900 U.S. stores are now functioning as "mini-warehouses" to fill digital orders, and that about 80% of its digital orders are fulfilled at a store.
Hammer down, everyone! And happy holidays!