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HANDLING AND PREVENTION OF CRISIS, VITAL FOR FEDEX

FedEx is the largest parcel and logistics company in the United States. He currently has a ” Superhub ” in Memphis, Tennessee, which covers an area of ​​356 hectares. This ‘ supercenter ‘ manages approximately 240 flights every day. This means that an aircraft lands every 40 seconds on average, almost the same as a military aircraft carrier. Approximately, 35% of the packages that FedEx transports pass through this node.

One of the planes that FedEx uses is the Airbus A300 of Flight 1311. Every night it moves from Denver to Memphis. It flies empty and often deviates from the direct route to Memphis, which generates a cost of approximately $ 30,000. It works as backup in case a package has been left behind, an airplane has a mechanical failure or drastically increases the activity in another operations center.

This flight works as a risk mitigator since it is present in case something does not go as expected. And it also works as an indicator of risks since it is a signal to know the vulnerability of the FedEx system. If the plane flies empty, then it indicates that everything operates normally. If the plane has to be loaded with a package it is that there is a fault in the chain, and it has to be found and fixed.

The implementation of this flight was thought by the Global Operations Control Center (GOCC), the risk unit of FedEx. This unit is installed in Memphis and is responsible for: monitoring meteorological risks, constructing scenarios and contingency plans, reviewing changes in customs regulations and coordinating operations centers in Europe and Asia with the United States, to mention some of its tasks. This unit works 24 hours a day and aims to ensure that the FedEx logistics chain remains operational in times of crisis.   

The GOCC knows that the risks for FedEx to fulfill its promise, to deliver on time, are not focused on the last link in the chain, but on its most important asset : the Superhub . Therefore, it is crucial that risk mitigation is carried out in accordance with the vulnerability of the company’s assets, not its operation. “Correct operation” is not synonymous with “Absence of risks”.

Addressing targeted risks such as theft of packages, moving trucks in dangerous neighborhoods and protecting packages of damage is important. But for many companies, the most intuitive thing is to manage the risks as if they were concentrated in the last link of the chain. “If the final part of the process is working well, then it is obvious that the rest of the chain is working correctly,” is what you tend to think.

Tools are needed to indicate the presence of a risk even if it has not yet affected its operation. Flight 1311 is an example of a resource that serves to alert about risks that are not at first sight. It exposes the vulnerability of the system and encourages the FedEx team to search for and attend it.

Most companies can not afford a risk unit with the technical rigor of the GOCC. But they can integrate risk mitigation using the reasoning behind the empty Airbus.

No company can identify and anticipate its risks completely. However, they can develop a system to prepare for a crisis and cultivate a corporate mentality in anticipation of a crisis that, in a rapidly changing world, will definitely occur. As FedEx stated: “It is possible that the GOCC fails to foresee what will cause the next carrier strike in Europe, but it does know that delays on land will occur at some point and, when they do occur, the backup plans are ready to begin.”

 

Political Risks can help your organization implement effective risk management and crisis management mechanisms. Contact us at info@riesgospoliticos.com.mx .

 

Photo by Erda Estremera on Unsplash

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