FedEx Healthcare | COVID-19 Executive Brief April 1, 2020
Meeting Purpose Interactive discussion with senior FedEx operations executives regarding the decisive steps FedEx is taking during the COVID-19 pandemic to ensure that your critical healthcare shipments reach your customers safely and quickly. Key Themes FedEx continues to deliver for healthcare customers by taking actions to: 1. Maintain a stable, global supply chain 2. Protect your employees and our team members
Executive Presentations FedEx Express Joe Stephens, Senior Vice President Global Planning, Engineering & Properties at FedEx Express FedEx Express has been collaborating with government and health organizations and actively supporting the movement of critical medical shipments including: Over 1 million test kits across the U.S. 250,000+ N95 masks and PPE to over 1000 U.S. health centers More than 100 tons of life-saving medical supplies to China 200,000+ surgical masks to Wuhan 2 million masks and PPE across the U.S. Ventilator and ventilator parts from around the world into the U.S. Medications from India and Pakistan into the U.S. where needed Additional actions to support the supply chain include: Support for remote community test sites (drive-through testing) Access points through retail for redirected shipments and printing support Pick, pack and ship services for test kit providers Expedited shipping for PPE from outside of the U.S. into the U.S. Protective measures are in place for the safety of your employees and our team members: Monitoring CDC and WHO for precautions for team members and customers Regular communications to team members, including a dedicated COVID-19 website Revised policies for social distancing including relaxed return to shipper and signature policies PPE provided to team members and heightened cleaning and sanitization measures have been put into place for aircraft, trucks and all facilities Team members that can work from home are being supported through additional IT and remote webcast capabilities
Contingency plans are in place leveraging the strength of the multi-hub, multi-node network to balance load when and where needed: FedEx regularly adapts to world events (wildfires, earthquakes, civil unrest, etc.) and has the experience and ability to do so in this case There are a few things that healthcare customers can do to help during this time: Identify designated areas for pickup and drop off to support social distancing Leverage the FedEx retail network where possible as an alternate to home delivery Ensure paperwork in order for International shipments to minimize hold time in cages or additional activity needed to process Match box size to content to help maximize density Opt for consolidated or earlier pickup times when possible While service levels remain strong at 93-97% (depending on the product), recognize that the situation is fluid and there may be delays while FedEx is doing everything possible to address FedEx Ground Scott Ray, Senior Vice President Operations at FedEx Ground FedEx Ground is managing heavy volume due to the increase in residential deliveries, including in-home healthcare and consumers ordering online: With the significant increase in residential business, there has been a correlating decline in commercial ground Use of technology and sort rules at destination hubs allows for streamlined sortation for commercial vs residential Sortation technology allows for the ability to isolate and prioritize healthcare shipments The FedEx Ground network is very strong right now, delivering 96-98% on time: With 7-day delivery reaching 60% of the U.S. population, residential deliveries on Saturday and Sunday have increased Relaxed return processes are in place to support you and your customers during this time Similar internal and external safety procedures are in place as referenced for FedEx Express. FedEx Express International Robby Beau, Vice President - U.S. International, Freight and Specialty Services at FedEx Ground APAC All countries are open at this time There has been significant demand from Asia to the U.S. Europe, with constantly evolving procedures for moving crew between countries 100 flights have been added from the U.S. to Asia, with significant open space going back There is a need to move PPE from South China and East China, and FedEx is working with Sales to prioritize those shipments Europe Demand is balanced between Europe and the U.S. Full purple tail operations are in place for intercontinental shipments, shifting flow from CDG to Cologne to support MEISA There has been a signifcant surge out of India (largely pharma), with steps being taken to add capacity to move 350k lbs. of supplies in the next week or two
Dubai has returned to normal Johannesburg was shut down and will restart
North America No significant issues in the U.S., LAC or CA at this time The need for proper paperwork on international shipments is especially important right now with an increase in delayed shipments due to missing information, closed businesses and challenges getting in contact with importers o For anything that requires FDA clearance, it is particularly important to provide that information in advance
Q&A 1. How do we find out where FedEx has cold chain facilities? FedEx Express has 78 cold chain facilities with temperature ranges available at each location. There is a team in Memphis that is specifically available to handle cold chain questions, including a PHD on staff to help with specialized technical requirements. (See attachement for each locations capabilities) 2. For FedEx Ground, with increased residential volume, does that impact pickup and delivery schedules? No, there is no impact at this time. 3. For FedEx Express, with the hundred flights being added from Asia to US, can some of the restrictions for IPD/IPF be removed? We are monitoring every day, and we will adjust as soon as possible based on what can be provided. 4. Will you have a summary of the call? What’s future expectation? Yes, we will have a summary of the statistics coming out from the call. We expect that FedEx Ground volume will continue to be strong with increased growth in residential deliveries. 5. What’s the plan to address re-attempts, particularly perishables? For FedEx Express, healthcare is our top priority, including dedicated charters that ensure shipments are getting to the right destination. For FedEx Ground, we are ensuring that we have the proper processes in place to make healthcare re-attempts a priority. We have communicated very specific procedures to reach out to recipients and find out when and where to deliver. At the enterprise level we are coordinating across all operating companies to support. 6. What else can we do to ensure clear identification of priority medical devices? Priority Alert is available for high-touch monitoring of shipments for pharma and medical devices. 7. Anything else that we can communicate to the driver to reinforce that these customers are open, signage on the boxes, etc.? Some customers have special requirements (i.e., lab open but main facility is closed).
Using labeling to designate priority medical shipments and encouraging customers to provide clear signage at their locations all help expedite the process. 8. Why is there a need for a COVID-19 surcharge given declining fuel prices? Does that not offset the cost? The COVID-19 surcharge is still necessary, beginning for some customers on April 6 and some on April 13. Your FedEx Sales Director or Manager can provide additional guidance. Our goal is to minimize the impact, based on how rapidly COVID-19 can be contained and the network can be cleared. 9. Can you produce a heat map that shows where we are experiencing delays? We are handling life saving devices. This is in progress and will be taken as an action item to follow up. 11. What’s is the priority between Priority Alert and Priority Alert Plus? Priority Alert is carefully monitored by a dedicated team. In the case of Priority Alert Plus, the team will add dry ice if capacity is not available to move the shipment quickly. 12. What’s the status on the India flights?
India domestic flying is currently running. It is primarily moving intercontinental volumes so very little domestic India traffic is moving. Restriction on International Priority Freight from S. Pacific to the US has been lifted. 13. Has there been any discussion on increasing weekend access points for pickup? For FedEx Ground, we have 7-day delivery operations with 220+ facilities serving these capabilities. For FedEx Express, Sunday pick up is not currently in place. With 60k hold at location facilities around the U.S. there could be additional options to explore for medical device needs over the weekend. 14. Will you have another one of these calls? Thanks to all of the 140 participants for joining this call. Yes, we will likely do this again to continue sharing information and hearing from you.