Acquisition Of Caliber Systems In 1998 By FedEx Corporation

In the year 1998, FedEx took a big leap in context to its diversification by acquiring Caliber System Inc. As a result of this, five subsidiary companies were formed: Federal Express, RPS, Roberts Express, Viking Freight and FDX Logistics. Apart from Federal Express, all the other four were the part of Caliber System and all were managed independently. The logistics operations of both FedEx and Caliber were different as differed in customer bases and service offerings. Caliber was expertise in providing an elaborate logistics operation focusing mainly on high priced goods industries such as moving raw materials, managing work-in-progress, manufacturing of cars and fork-lift trucks etc. Federal Logistics and Electronic Commerce (FLEC) before the acquisition was not able to provide complete supply chain solution because they just focused on finished goods and reverse logistics. But, the acquisition led FLEC to put there hands into areas like warehousing and transportation apart from the basic logistics functions. Later, Caliber became apart of FDX Logistics and FLEC continued as a division under Federal Express.

The burden which this acquisition brought along with it to the company was that, the company has to loose its image of just being an express delivery company. The challenge was that all the critics including the customer related the FedEx brand just with transportation. One solution to this challenge was the renaming of the company. In this context, the acquisition gave the name to the holding company as ‘FDX Corporation' but they did very less to promote the name. Therefore, the transportation subsidiary FedEx Express still lived on as a brand image and the corporate name was still under cover. Unlike other companies such as UPS which ran only under one name for all its services, FedEx was