FedEx is a major presence in Memphis, especially at the airport. More than 5,000 workers help nearly 500,000 packages move through the hub during the day. Overnight, while most of Memphis is asleep, more than a million additional packages are processed.
Getting a package from one place to another has always been a puzzle. But since last year, as President Trump’s on-again, off-again tariffs scrambled global trade, that puzzle became even more complicated for companies like FedEx.
The company has said that it would take a $1 billion hit from costs related to tariffs. Still, FedEx recently told shareholders that it expected to increase its revenue and gave a rosier profit outlook for the quarters ahead.
Raj Subramaniam is in charge of delivering these results. The company veteran, who became chief executive in 2022, said there are “very, very few” others that can match FedEx’s abilities. The company employs half a million people, runs a fleet of around 700 planes and 200,000 trucks, and handles more than 17 million packages a day across more than 200 countries and territories.
Mr. Subramaniam, 59, is only the second chief executive in FedEx’s history. He succeeded Fred Smith, who founded the company in the early 1970s.
With his business savvy and political connections, Mr. Smith transformed the logistics industry, raising customers’ expectations for how fast they could receive a package from anywhere in the world. Mr. Smith, who died in June, also achieved something rare in business: His company’s name became a verb.
Mr. Subramaniam, who was born in India, began at FedEx as a marketing analyst in the early 1990s, eventually moving up to become the company’s president and chief operating officer before stepping into Mr. Smith’s considerable shoes.
This interview has been edited and condensed.
As you see it, what is your competitive edge against big rivals?
We move $2 trillion worth of commerce through our system every year.
We are the heartbeat of the industrial economy. Seventy percent of our revenue comes from business-to-business. When people talk about the “last mile,” they sometimes forget about the first 10,000 miles and that’s what is different. We go from one end of the planet to another and connect every point to every other point.
That infrastructure is now very, very important for the global economy. That’s the overarching message for FedEx. We have a significant advantage because of the incredible scale of our network.
As companies talk about humanoid robots in warehouses and drone deliveries and things like that, what is FedEx’s approach to technology?
We move 17 million packages per day through the global system. That generates multiple petabytes of data. We realized that the data is valuable in its own right.
The fuel for A.I. is data. If you don’t have your data appropriately organized, then there are limits of what you can do with it.
We’re using A.I. to make supply chains smarter for everyone. We can now say with more and more precision when that package is going to arrive.
And what about automating more parts of the delivery process?
Truck unloading and truck loading are a very difficult problem for robotics to solve — packages come in every size, shape and weight.
We’re not looking for humanoid robots — we’re looking for super humanoid robots, because maybe they need to have a couple of elbows. More degrees of freedom.
We’re in the pilot stage. It is not ready for prime time yet.
Where does FedEx stand on drones?
We are in aviation, so we know everything about things that fly.
We have to look at drones in a very different way. Can we get bigger? Can we get more packages? Can we fly longer?
Just having a little drone flying one package, one place to another, works for very specialized packages, but can you imagine for 17 million packages?
We worked on a project for two or three years. However, we couldn’t make the technology work or scale from the dollar perspective, so we had to kill it.
Trade flows between the United States and China are slowing, but other routes are emerging and growing fast. How does FedEx respond to those shifting patterns?
I’ve been in this business for a long, long time. More or less, you kind of knew how the patterns were going to evolve. That has fundamentally shifted in the last year. It’s just incredible how things have changed. I don’t think it’s settled yet. I’m coining this term as “re-globalization.”
We have made several moves in the last six months. We’ve opened facilities in Istanbul, in Bangalore, in Dublin. We’ve done different moves around Intra-Asia. A new platform in Osaka. We can reconfigure out networks to manage through this re-globalization process.
Let’s go back to the beginning. You’re from India. Tell me about your upbringing.
It was very much a middle class upbringing, in a town called Trivandrum, in the south of India. My dad was a policeman. My mom was a doctor, so education was the ticket, basically.
You came to the United States for a master’s degree. Why did you want to come to America?
At that point in the late ’80s, it was a well-worn path because I went to the Indian Institute of Technology, which was the premier institution in India for undergrad. I was fortunate enough to get a scholarship to come to America. I still have the $2 bill that I came here with.
Your trajectory has been shaped by being an immigrant. What do you think about the current debates about limiting visas?
I’m just grateful for the opportunities given to me. It’s very much an American story because I think it’s going to be rare for these kind of stories to happen in other countries. That’s one of the true, great strengths of America.
I’m very much a believer in legal immigration, and that’s important.
From a FedEx point of view, we are a meritocracy. We provide opportunities for everybody. I’m one of those examples, but I’m not the only one.
You’ve worked at FedEx your entire career. What do you think is the most consequential decision you made that got you into the C-suite?
Once I got to FedEx, I did not know anybody in Memphis and had to figure it out from the bottom up, but I loved it here. We were just about expanding internationally in early 1991 when I joined, and I was just thrown into that mix.
Within five years, I had the opportunity to go to Hong Kong as a managing director of marketing. That experience was very helpful.
I also got the great opportunity to be the president of FedEx Canada. That gave me a look at the whole aspect of the business. I did a reality TV show there.
Say more.
It was called “The Big Switcheroo.” I swapped roles with a frontline courier.
They were looking for moments when I screwed up, I guess, and I gave them enough material. They did two shows.
What did you learn from it?
People talk about customer experience all the time, and they talk in such theoretical terms. The moment of truth is when the FedEx team member, whether it’s a courier or customer service agent, interacts with a customer. There’s no teaching that in any textbook.
What’s the best management lesson Fred Smith taught you?
Fred was a fantastic mentor, and it was not only like business school, but also geography school, history school and everything else. But every few weeks, he’d have this question: “Are you having fun?”
That was a good question, and it kind of centered everything.
As you try to move the company forward, do you ever stop and worry about what Fred would do?
Fred built this tremendous company. It’s my job now to make sure that we realize its full potential.
He said: “I’m Fred, you’re Raj. You’re good to do what you think is right, and that’s why I put you in this job.” That’s what I’ve done.
When Fred ultimately handed you the reins, what did he say?
When the moment came, it was a simple phone call.
He said: “Are you ready?” I said: “Yes. For what?”
Let’s go to the lightning round. What’s the most annoying thing about shipping an item?
Customs clearance.
What is your best tip for concentrating?
Wake up early, early in the morning.
How early are we talking?
4:30, 5 o’clock. You get a couple hours of real all-neurons-firing time.
What’s the first app that you check in the morning?
The news app.
With the benefit of hindsight, what’s a decision that you would have done differently?
The most difficult decisions are people related, but once you know something is not working you are better off doing it fast than waiting.
What’s something you wish you had more time for?
Reading.
What’s the last book you read?
I have three underway right now. I’m rereading “The Innovators” by Walter Isaacson, and also “Age of Revolutions” and “The Golden Road.”
What’s your philosophy on meetings?
I like meetings to be short. I like them to be on time. And the fewer slides, the better.
Jordyn Holman is a Times business reporter covering management and writing the Corner Office column.
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