FedEx Rebuilds Its Network While Turning 2 Petabytes of Daily Data Into a Business
The shipping giant is combining networks, reshaping its portfolio, and commercializing its data
MEMPHIS, Tenn. — FedEx Corp. is entering its first era without legendary founder Frederick W. Smith as it undertakes the most sweeping operational and structural overhaul in its 53-year history. The multiyear effort is intended to extract billions of dollars in structural costs while the global shipping giant responds to a volatile realignment of international trade routes.
Smith died in June 2025 at age 80, leaving Chief Executive Officer Raj Subramaniam without his longtime mentor. A 35-year FedEx veteran, Subramaniam previously served as president and chief operating officer and was groomed for years to succeed Smith. He became only the second CEO in the company’s history when he took over in June 2022.
The transformation began with DRIVE, a cost-reduction program first launched to counter a post-pandemic drop in shipping volumes. It has targeted billions of dollars in permanent structural cost reductions, and under Subramaniam the initiative has expanded into three concurrent transformations: a domestic network merger, an organizational restructuring, and a digital push focused on artificial intelligence and data analytics.
FedEx is physically integrating FedEx Express and FedEx Ground into one unified domestic delivery network. For decades, the divisions maintained separate entities, hub systems, sorting facilities, and delivery routes. The old arrangement could result in two different FedEx trucks delivering packages to the same address on the same day.
The company is also changing the shape of its portfolio. FedEx recently spun off its trucking business, FedEx Freight, which began trading as an independent entity on the New York Stock Exchange on June 1. The move allows the parent company to concentrate more closely on its core express, ground, and digital services.
For the fiscal year ending in May, FedEx reported an 8% increase in revenue, reaching $94.7 billion. Subramaniam continues to face pressure from Wall Street to turn that revenue growth into wider operating margins through permanent structural efficiencies rather than short-term cost-cutting.
A separate part of the overhaul is being developed through FedEx Dataworks, an enterprise unit created to convert the company’s extensive operational data into commercial products. FedEx moves approximately 18 million packages each day across 220 countries and territories, producing two petabytes of data every 24 hours.
Dataworks traces its origins to late 2019, when a young FedEx employee submitted an unsolicited white paper describing how the company could commercialize its proprietary supply chain metrics. Subramaniam formed an initial team of eight in downtown Memphis to build the technological infrastructure. As artificial intelligence has accelerated, the unit has expanded rapidly and entered strategic data-sharing partnerships with corporate intelligence firm Dun & Bradstreet and digital workflow platform ServiceNow.
The same data is tracking changes in global commerce that Subramaniam has called “reglobalization.” FedEx’s real-time shipping information shows traditional trade patterns moving away from historical centers. U.S. import volumes have declined while exports have risen, influenced by tariff policies initiated under the Trump administration and maritime shipping disruptions linked to geopolitical conflicts, including the war in Iran.
Multinational companies are responding by shifting manufacturing toward regional hubs. FedEx has recorded its fastest volume growth in Latin America, Southeast Asia, and India, alongside a broader corporate move toward “nearshoring” and diversifying manufacturing away from dependence on a single country.
Smith founded FedEx in Little Rock, Arkansas, in 1971 and moved operations to Memphis in 1973. He had famously described the concept of an overnight delivery service in a Yale University term paper. Under his leadership, FedEx grew from delivering 186 packages on its first night of operations into a $95 billion global powerhouse.
As facilities become more automated, the workforce is reorganized, and the company moves toward data-driven business models, Subramaniam has said that preserving FedEx’s distinct corporate culture remains a primary objective. He noted that maintaining cultural continuity was a core promise he made to Smith during the leadership transition.
