Managing Risk At FedEx Express Bill Logue EVP & Chief Operating Officer, Express U.S. October 9, 2008

2 Oct. 9, 2008Managing Risk At FedEx Express Topics  Size & Scope of Express Network  Our Business Planning Structure  How We Plan The Shape & Form Of Our Network  Daily Operational Execution  Disaster Relief & Business Continuity

3 Oct. 9, 2008Managing Risk At FedEx Express About FedEx Express  Time-definite delivery to 220 countries and territories worldwide and every address in the U.S.  Average daily volume of 3.4 million packages  1,503 daily flight departures  672 aircraft  43,900 motorized vehicles  131,000 employees

4 Oct. 9, 2008Managing Risk At FedEx Express Domestic U.S. Operating Divisions DivisionResponsibility U.S. Operations Pickup / Delivery Retail Operations Vehicle Maintenance Air Ground Freight Services Hub Operations Ramp Operations Express Freight Air Operations Crew Resources Safety / Regulatory Aircraft Maintenance A/C Engineering

5 Oct. 9, 2008Managing Risk At FedEx Express Risk  Risk is the potential for loss caused by an event (or series of events) that can adversely affect the achievement of a company’s objectives.  Organizations that are most effective and efficient in managing risks to both existing assets and to future growth will, in the long run, outperform those that are less so. Deloitte, Risk Intelligence Series

6 Oct. 9, 2008Managing Risk At FedEx Express Risk Management Starts With Our Business Planning Process Global Strategic Plan Long Range Outlook: Six Year View Fiscal Year Start June 1 Business Baseline & Interpretation Hypothesis Testing Identify / Evaluate / Prioritize Initiatives Divisional Operating Plans Annual Execution Forecast U.S. & International Volume Capacity Plan: Aircraft, Vehicles & Facilities Operating Plan: Flights, Manpower, Operating Requirements Capital & Expense Plan

7 Oct. 9, 2008Managing Risk At FedEx Express System Form Planning  Long Range Planning: 1 – 5 yr  Business Planning: mo  Current Scheduling & Operational Planning: present - 6 mo “Satisfy service requirements based upon forecasted volume”

8 Oct. 9, 2008Managing Risk At FedEx Express Daily Operational Control & Risk Management  Daily operational oversight resides in our Global Operations Control (GOC) Center  GOC exercises command and control of the FedEx Express linehaul system.  GOC is the highest level of command in our system, monitoring our worldwide line-haul and implementing emergency and contingency action plans as necessary.  Daily!

9 Oct. 9, 2008Managing Risk At FedEx Express Disaster Relief – Event Management  FedEx among worldwide first responders to catastrophes: – Tsunami relief in Southeast Asia – Earthquake Relief in South Central Asia and South America – Alliances with relief agencies, including Red Cross and Heart to Heart International

10 Oct. 9, 2008Managing Risk At FedEx Express Business Continuity DRACO (Disaster Recovery and Contingency Operations)  Consolidating all Business Continuity and Disaster Recovery under one umbrella  Major Components  Airport Reconstitution  Hub/Operations Reconstitution  Contingency Aircraft and Truck Schedules  IT System Reconstitution  Infrastructure Plan – Safety Issues – Security Issues

11 Oct. 9, 2008Managing Risk At FedEx Express Managing Risk Is What We Do

12 Oct. 9, 2008Managing Risk At FedEx Express Supply Chain Risks  Fuel – Price – Availability  Economic Disruption  Geopolitical (regional)  Terrorism  IT Network  System Replication/Duplication

13 Oct. 9, 2008Managing Risk At FedEx Express Open Discussion Questions?