About Rajesh Subramani
At the CNBC Evolve Global Summit in November 2023, Subramaniam discussed the company's ongoing transformation, which he described as integrating its air, ground, and trucking businesses into a single entity. He attributed the need for this change to the growth of e-commerce, noting that the shift from business to residential deliveries required operational and technological adaptation. Subramaniam stated that despite a decline in volumes, FedEx's operating profit increased for the first time in the company's history, which he credited to the team's focus on efficiency and the strengthening of the company's "people, service, profit" culture.
In June 2022, at FedEx's first investor day in a decade, Subramaniam outlined a three-step plan to achieve double-digit operating margins, balanced revenue growth, and improved asset intensity, targeting a total shareholder return of 8% to 22%. He cited projections of 14% to 19% EPS growth and a 53% dividend increase as signals of confidence in the company's financial position. Subramaniam also addressed labor pressures, stating that the company had addressed routing inefficiencies and wage rate challenges, and that the labor market had become "strong but stable."
Source: AI-verified profile updated from Rajesh Subramani's recent appearances.
Browse all interviews →
Transcript (4 segments)
I
Interviewer0:10
FedEx was founded actually in 1971 by American business pioneer Fred Smith. He got the idea from a term paper at Yale, but it wasn't until April 1973 that the first flights took off from Memphis. So fast forward 50 years later to April of this year, you announced a pretty audacious plan: you're transforming the company. It currently operated as three different businesses—air delivery, ground delivery, trucking—and you're going to combine them into one single company. That process is underway right now. Give us a sense, give us an update: how is that transformation going? And when you transform the operations, did you also have to transform the culture?
R
Rajesh Subramani0:49
Well, Frank, since we're talking history, let me also give you a little bit of perspective. With Fred, you know, with this idea of operating independently to create a differentiated value proposition for our customers, it was simple: faster, cheaper, and metronomically every single quarter for what, 16 years, we took share. So that gap of 70 points is now single digits. This is probably one of the most unwritten stories in business. So talk about a transformation, that's a transformation. Now, what changed? We saw in 2016 that 90% of the future growth is going to come from e-commerce. Well, what does that mean from an operations perspective? At that point, 75% of our stops were businesses, which means you have one package delivering another package, and that doesn't work. So that's where this is an evolution of our strategy. As the business environment has changed, this was always the plan, and it was just the timing of it. We needed to get the technology to work, and we needed to make sure that we have the right facilities and so on. So that's where this transformation that we are going towards, what we call Network 2.0, and we will take our time to make sure we do this right and make sure we provide the best service to our customers. But I wanted you to have the context for which we announced that transformation.
I
Interviewer2:41
As a leader, how do you institute such dramatic change?
R
Rajesh Subramani2:48
Well, I tell you what, you know, change is a constant at FedEx. You talked about the culture. What we are doing is strengthening the FedEx culture. We stand on the shoulder of a giant, and so what we are doing is strengthening the accountability pillar of the culture. It basically says drive business results, and that's where the word 'Drive' for our transformation program came from. So the team is doing a fantastic job. One of the great things that has happened in the last year is that despite the volumes being down, our operating profit went up. That's the first time in the history of FedEx that has happened. And I think the team has just done a phenomenal job of taking on this challenge. We decided a year ago that when we saw the volumes go down—we were early to see it—and we decided that we're going to come out stronger than we went in, and that we're going to use this crisis as an opportunity to get significantly better at FedEx.
