NORTHAMPTON, MA / ACCESSWIRE / January 23, 2025 / FedEx Corporation
Originally published in FedEx's 2024 Global Economic Impact Report
Global economic impact
The extensive FedEx network moves more than $2 trillion worth of goods every year, providing vital shipping and logistics services that help customers connect with local, regional, and international markets. Beyond supporting multinational corporations and enabling small businesses to grow their own operations, FedEx makes significant economic contributions through its capital investments, employee wages, purchases with local suppliers, and tax payments.
Direct impact
FedEx makes substantial contributions to global net economic output, particularly in sectors related to its core transportation and logistics services.
In FY 2024, FedEx contributions accounted for approximately 0.9%7 of overall net economic output in the Transportation, Storage, and Communications sector, as defined by the United Nations Conference on Trade and Development (UNCTAD). Contributions from FedEx helped that sector's total net economic output grow to approximately $9.8 trillion in FY 2024, a 10% increase over the previous fiscal year.
Despite challenging conditions, the global economy as a whole also grew in FY 2024. Worldwide net economic output reached an estimated $107 trillion, up from an estimated $103 trillion in FY 2023. Contributions from FedEx accounted for 0.08% of the total, a considerable amount for a single company. For context, the FedEx direct impact on the global economy is approximately 1.6 times greater than the impact of an average active business with more than 100,000 employees in the Dun & Bradstreet Data Cloud.8
This impact is possible because of the company's advanced transportation and logistics network, which FedEx continues to optimize. With its integrated road and air hubs, strategically located package sorting facilities, specialized services such as cold chain storage, and neighborhood shipping centers, FedEx helps businesses reach customers nearly anywhere in the world. The U.S. section of this report includes descriptions of some of these facilities to illustrate the role that each plays in FedEx operations.
In addition to these facilities, FedEx employs more than 500,000 people around the world to help ensure fast, reliable service. The range of FedEx occupations reflects the size and diversity of the company's services, and includes pilots, truck drivers, package handlers, maintenance personnel, technology professionals, customs and logistics experts, product specialists, meteorologists, and more. Team member profiles included throughout this report offer a closer look at individuals who perform a range of these important jobs.
FedEx is committed to offering its employees high-quality jobs and career advancement opportunities. For example, FedEx offers continuous learning opportunities for frontline workers, including online and mobile learning platforms for operations employees, training programs for package handlers, driver development programs, and maintenance apprenticeships. To foster internal promotions, FedEx offers a company-wide leadership development program for high-potential officers and directors and one-on-one executive mentorship as well as coaching.
Indirect impact
FedEx contributions to global net economic output create additional economic activity across its business network, which is reflected in the company's indirect impact. Because of the relationships within and across sectors of the economy, FedEx contributions such as its revenues, wages, and capital expenditures can drive production increases at other companies - both in closely related sectors such as transportation and in other areas of the economy such as manufacturing, construction, and retail.
FedEx indirect contributions to total worldwide net economic output reached an estimated $39 billion in FY 2024, a 10% increase over the company's indirect contributions in FY 2023. Given its role as a major provider of transportation and logistics services, FedEx made the largest indirect contribution to the global Transportation, Storage, and Communications sector9 (an estimated $20.4 billion). FedEx also indirectly contributed an estimated $10.1 billion to the global Manufacturing sector.10
Impacts through the supply chain
FedEx relies on a diverse network of approximately 100,000 suppliers to maintain its global operations. These extensive relationships generate significant economic impact beyond the company's direct and indirect contributions. The purchases FedEx makes from suppliers stimulate follow on business activity across national and local economies, including each vendor's revenues, employment, taxes, and capital investments.
To quantify this impact, Dun & Bradstreet analyzed FedEx spending with roughly 83,000 unique suppliers over CY 2023.
FedEx spent approximately $63 billion with these global suppliers during that period, providing a source of revenue that enables supplier companies to make purchases from their own suppliers, grow their operations, and hire employees. For example, FedEx spending supported an estimated 730,000 jobs at its supplier companies in CY 2023.
Small- and medium-sized businesses (SAMs)11 make up 90% of the FedEx supply chain. As a result, FedEx supplier purchases provide a significant economic contribution to the global SAM market. In CY 2023, FedEx spent an estimated $21 billion with SAM suppliers around the world, and those purchases supported approximately 400,000 small business jobs.
FedEx supports small businesses through its supplier purchasing and is committed to sourcing from diverse businesses that are competitive in quality, service, and cost. For example, FedEx spent $18.6 billion with small and diverse suppliers in the U.S. during CY 2023.
To support the development of diverse suppliers, FedEx provides alliance sponsorships, engages with industry associations, and provides equitable market access opportunities. FedEx also supports programs across the globe to help small and diverse businesses meet specific needs, such as training, mentoring, networking, and helping small businesses access capital.
Impacts through the extended supply chain
The impact of FedEx spending multiplies down the supply chain. To fulfill demand from FedEx, the company's direct suppliers often purchase materials, components, or services from their own vendors (known as tier two suppliers), and those tier two suppliers make purchases with their own vendors (known as tier three suppliers).
For example, FedEx purchases vehicles for its surface transportation operations through its fleet management provider, Holman, who then organizes the purchases directly through a manufacturer like General Motors (GM). To support the production of the final vehicle, GM will purchase components from many different suppliers, including major tire manufacturers like Bridgestone. In this way, the purchase of one vehicle by FedEx supports many tiers of suppliers, from the fleet management company to the automotive dealers, to the vehicle manufacturers, and ultimately the hundreds of suppliers that provide manufactured components in the vehicle production process.
Enabling mission-critical trade for customers
Trade drives the growth of the global economy. It creates jobs, lifts incomes, and enhances living standards by providing expansion opportunities for businesses of all sizes. FedEx is a trade business, and periodically engages with its customers' business leaders to track the impact of international trade on their operations and to shape the services that help simplify the movement of goods and services worldwide.
According to a recent survey conducted by Morning Consult,12 commissioned by FedEx, there is nearly universal support among U.S. business decision makers for global trade. Virtually all agree that global trade stimulates economic growth (91%), creates jobs and opportunities (90%), and fosters innovation (88%). The majority of U.S. businesses say that connecting with international markets is mission critical, with 96% of large U.S. businesses and 97% of businesses that import/export agreeing that international connectivity is important to their success.
Conversely, FedEx customers say that trade restrictions greatly impact their business. Morning Consult's 2024 trade data found that an overwhelming majority of U.S. businesses (84%) have been at least minimally impacted by tariffs, trade restrictions, or ongoing trade tensions. This impact is mostly felt in an increase in the cost of raw materials (57%), shifts in suppliers due to uncertainty of supply (37%), economic uncertainty from investment delays and currency exchange fluctuations (37%), and lost sales due to uncertainty of supply (35%).
As e-commerce reshapes global trade, the impact of trade restrictions on U.S. small- and medium-sized businesses will be even greater. Consider de minimis, a trade policy that allows goods of minimal value to be imported duty-free. A change to this policy in the U.S. would harm small- and medium-sized businesses and consumers, creating impacts that would extend across borders throughout the global e-commerce community.
FedEx remains committed to fostering greater global connections because international trade is essential to its customers. By moving millions of packages each day, the company has gained deep knowledge of trade lanes, laws, industries, shippers, and consumers. Those insights help FedEx pursue its goal of making supply chains smarter and more efficient for all. At the same time, the company is leveraging that knowledge on behalf of its customers of all sizes to address trade barriers - especially non-tariff barriers, such as data flow restrictions, local content requirements, and outdated customs regulations.
FedEx will continue to champion the benefits of global connectivity for consumer choice, economic growth, opportunities for individual companies and their workers, and improved quality of life.
7 Global direct and indirect impact figures are estimated to account for spillover effects of the FedEx network in regions where the company does not have operations.
8 The Dun & Bradstreet Data Cloud houses more than 583M+ company records updated millions times per day. With thousands of vetted global data sources, D&B's capacity and volume of business data provides its customers with best-in-class coverage, recency, and accurate analytics. Sources are continually monitored for changes and the Data Cloud is updated accordingly.
9 As defined by UNCTAD.
10 As defined by UNCTAD.
11 SAM businesses outside the United States defined as companies with 100 employees or fewer. For U.S.-based companies, SAM businesses defined according to the U.S. Small Business Administration's size standards for each North American Industry Classification System (NAICS) code.
12 This poll was conducted between August 6-20, 2024 among a sample of 612 Business Shippers in the United States. The interviews were conducted online and the data were left unweighted. Results from the full survey have a margin of error of +/-4 percentage points.
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SOURCE: FedEx Corporation
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