US FedEx chief says he welcomes European competitors
FedEx chairman and CEO Frederick W. Smith told European business leaders Thursday that FedEx welcomes competition from foreign air cargo carriers, but he questioned the benefit to postal customers when their postal monopolies invest in such ventures.
Smith was the guest speaker at a luncheon meeting of the German-American Business Council, where he talked about the Memphis-based logistics company’s place in a world that “needs things fast.”
Speaking to a crowd that included both business people and officials from at least 10 foreign embassies, Smith gave an upbeat assessment of the American economy, based in part on his company’s improving prospects.
But, in answer to a question, he said more needs to be done in the area of cyber-security to avoid an “economic Pearl Harbor.”
Smith said that FedEx has always been at the cutting edge of business innovation and that as the world economy moves toward greater reliance on “fast-cycle logistics,” FedEx will remain a leading facilitator of intercontinental trade.
Since 1990, he said, the volume of international trade has grown at 6.7 percent a year, or almost double the growth rate of the U.S. gross domestic product.
“Our company is tightly woven into the fabric of global commerce,” he said.
For his German audience, Smith offered both praise and a gentle chiding. He spoke of the German company Siemens staying agile over more than a century — laying trans-Atlantic cable in 1874, making cardiac pacemakers in the 1950s and developing fuel cell technology today.
But he also said he said he would like to see Frankfurt’s night curfew, affecting 13 FedEx flights a day, adjusted.
Dr. Bernd Fischer of the German Embassy, who recalled visiting Memphis on a cross-country bus trip in 1972, told Smith he would communicate his concerns about “keeping our people staying up a little later at night” to proper authorities.
In questions from the audience, Smith said he wondered why Europeans tolerate having the substantial earnings from mail monopolies invested in commercial businesses. Smith recently testified before a congressional panel examining U.S. postal regulations.
“For the life of me, I would like to have anyone from the German government, or the Dutch government, or the French government or the British government — all of whom have done this — give me the rationale for where it makes sense for the citizens of Germany, France, the U.K., or Holland . . .
“The people that are paying the price — make no mistake about it — in these adventures in state capitalism are the consumers and the mailers of European countries. That money belongs to them, and it should be dividended out or given to them in lower postage rates.”
Asked if more investment needs to be made in anti-terror security and cyber-security, Smith said FedEx was in the enviable position of being prepared for 9/11. Because of the high premium it has always placed on security because of daily issues involving Customs, contraband and valuable cargoes, it wasn’t as difficult to take it to another level, he said.
And with 2.5 million hits a day at FedEx.com, “our systems have to work,” he said.
Still, he added, a lot of work needs to be done on cyber-security issues.
“Were (the Internet) to be brought down for any sustained period of time . . . it really would be an economic Pearl Harbor of enormous proportions,” he said.
