Question: Are you optimistic about the health of the global economy today?
Answer: I’m optimistic because people everywhere are increasingly connected. As a result, some tectonic shifts have occurred, one of which is a change in the way people do business. Consumption has become a pull model instead of a push model. Manufacturers or wholesalers used to push product into specific channels, and you could consume only from those channels. Now, individual consumers can customize goods and get anything they want, exactly how they want it, using the internet. That creates opportunity for more businesses.
Q: What do you see driving global recovery other than changing business models?
A: Many emerging economies in the world are growing much faster than the developed economies, and their people desire the same types of goods and services as people in developed economies.
Q: What are the results of this growth?
A: In China, in India, in Brazil, in Mexico and Russia on and on … in all those places business people, consumers and manufacturers want access to products, ideas and talent from everywhere else. They want the ability to move those things fast to where they are needed. So these economies, their growth absolutely creates opportunity everywhere. And with the global digital connections we have, people and businesses alike look globally for the best value at the best price.
Q: Do you see businesses in the developed nations actively going after those opportunities?
A: Yes. Think about where more vehicles were sold last year than anywhere else in the world: China. Auto companies are operating all over China, but those Chinese firms want access to other markets. They’re going to want access to the U.S. market, where they can get expertise and parts. So you see people innovating and changing based on current conditions. The opportunities are out there. And just think about the coming of electric vehicles. Twenty years ago, you wouldn’t have thought about electric vehicles unless you were in a golf cart. Today, we’ve got a whole electric-car industry that is driving other industries. Who supplies the batteries? Who supplies the chassis? The other components? It creates opportunity around the world.
Q: The auto industry is very capital-intensive. Do you also see changes in the opportunities for smaller businesses that require less capital?
A: We have to produce value for small customers just like we do large customers, and we see a much greater volume of small businesses becoming significant customers for FedEx. We live in a rich, rich environment for small industries that are creating innovation and new technologies, new brands and new trends. They want the capability to reach markets that they’ve never penetrated before, so we try to help them. We help them learn customs clearance processes. We work with the U.S. Commerce Department and others to help teach them how to go global. And more small businesses are going global every day.
Q: On the consumer side, what factors are driving these global changes?
A: The efficiency of the supply chains and global connectivity have improved so remarkably that people and businesses have no patience to wait for things. People want their new iPads now. The world is just a much faster place today. That’s one of the reasons air freight is growing faster than global GDP. On the business and innovation side, people recognize that growth outside of their own borders creates opportunity. When you can sit in your house in Switzerland and decide to reach the world with a new product or new invention, you do all that by air. You can get feedback on your prototype products, or you can get your finished product into markets faster than your competitor.
Q: In the last year, you testified before the U.S. Congress on the need to ratify several pending trade agreements. But there is a perception among some people that when you remove restrictions on global trade, you endanger jobs at home.
A: Often, only one side of the story is told on trade — the negative. All of us need to do a better job of communicating the benefits. As more people move up into the middle class, a whole new world of choices is available for products that they never knew about before. As companies try to meet that demand, there are going to be changes in the way things are manufactured around the world, so there may be some jobs lost in a particular place. Some call that concentrated pain. But it also produces a distributed gain as businesses create jobs to meet that new demand.