1. Matt Vega Senior Counsel Federal Express Corporation A Better Understanding of the International Trade Supply Chain and the Express Delivery Industry

2. A Better Understanding of the International Supply Chain and EDS

3.  Functional Components of Access  Time  Space  Information  Beneficiaries of Access  People  Businesses  Nations  Opportunities Generated by Access  To participate  Choose  Improve Foundational Concepts of Access f (T, S, I) = A

4. A Better Understanding of the International Supply Chain and EDS  Regardless of what country you live in:  Today, 20% of all goods consumed crosses a border  By 2020, 80% of all goods consumed will cross a border  Why is that important?  The world is irreversibly committed to global trade  Dependent on fast cycle logistics  Creating a supply chain revolution The Access Generation

5. A Better Understanding of the International Supply Chain and EDS  Express Delivery Services (EDS)  Rapid, reliable, customs-cleared, time-definite, door-to-door transport and delivery, usually within just one or two business days  EDS connects more than 90% of the world’s GDP in 24 or 48 hours  High-value / low-weight: only 3% of cargo is shipped by air, but air cargo accounts for 40% of the value  Global Supply Chain Logistics  Advanced methods  Information technology Fast Cycle Logistics (2 key ingredients of)

6. A Better Understanding of the International Supply Chain and EDS  Changing the World’s Business Models:  Global Sourcing  Build to Order Systems  “Just-In-Time” (JIT) Manufacturing  Vendor-Managed Inventory (VMI)  Reducing costly inventories  Increasing speed to market  More than 40% of US economic activity is JIT  Average amount of inventory stocked in US reduced by nearly 20%  Inventory carrying costs in the US have gone from 7.2% of GDP in 1982 to 2.7% today  Frees up capital for R&D and other more useful expenditures New Supply Chain Models

7. A Better Understanding of the International Supply Chain and EDS  E-Commerce  On–line sales in the US are growing at 25% per year  E-bay  Consumer expectations will never be the same Consumer Revolution

8. A Better Understanding of the International Supply Chain and EDS  SRI Study  Ranked 75 countries  According to 22 indicators of Access  Results  Greater Access associated with enhanced trade and greater economic growth  Top 10 countries experienced 22 percent growth  Bottom 10 countries experienced 14 percent growth National Economic Growth

9. A Better Understanding of the International Supply Chain and EDS  Time (express overnight or time-definite, retail business)  Take the unique business model into consideration  Threat-based, risk managed solutions only  Keep the retail customer and small to medium businesses in mind  Space (global linehaul network)  Global harmonization needed for interoperability, training and compliance  “Single window” concept intra-country just as important  Mutual recognition will leverage benefits of greater Access  Information (advance information, track & trace)  Supports Custom’s advanced cargo manifest systems  Requires “just in time” information window approach  Remember all information has significant associated costs Policy Implications

10. A Better Understanding of the International Supply Chain and EDS “In the global economy, the concept of distance is no longer a factor in decision making. What matters is the time.” Gene Huang, FedEx Chief Economist

11. A Better Understanding of the International Supply Chain and EDS “Information about a shipment is as important as the shipment itself.” Fred Smith, Chairman & CEO FedEx