1. Industry
Send to a Friend via Email
You can opt-out at any time. Please refer to our privacy policy for contact information.
Barbara Farfan

Fedex Failures Tarnish a Good Customer Service Reputation and Give Fedex CEO Fred Smith Many Reasons Not To Celebrate on His Birthday Weekend (FDX, AAPL)

By August 12, 2013

Follow me on:

This past weekend Fedex founder Fred Smith had a reason to celebrate. The reason wasn't, though, the sentencing of the Philadelphia Fedex driver who was found guilty of stealing more than $40,000 worth of iPhones out of shippers' packages. Smith was also probably not celebrating the recently gone-viral video starring the package-chucking Fedex driver which circled the globe faster than a speeding Express package.

It's also unlikely that Smith's weekend celebration had anything to do with the $21.5 million settlement that Fedex has agreed to pay for overcharging as much as $3 per package for millions of packages over a three-year period. And hopefully Fred Smith wasn't toasting the shipping price hikes and staff reductions that were announced in June as part of his weekend celebration either.

Fedex's once enviably sparkling reputation for customer relationships and service has become quite tarnished lately, to say the least. Is the sum total of the Fedex employee and customer challenges a sign that Fedex has lost its managerial mojo? Or is it just another case of media fixation and negative news spin run amok?

Most likely it's a little bit of both, but the only way to really know is at the individual customer experience level. Having had a customer experience with Fedex myself in the past two weeks, I am inclined to believe that Fedex is not just the victim of bad press.

Before I share this real and recent Fedex case study, I'm going to give the executive summary and then those that are intrigued about how one customer interaction could possibly serve to illustrate all ten of these managerial principles can continue reading.

The executive summary is:

  • Employees need to know the "why" behind every part of their job so that they know the consequences of skipping steps.

  • Employees who are slaves to "the system" will end up spending an inordinate amount of time trying to fix the transactions and interactions that are exceptions to the system.

  • Employees without empowerment are employees without ownership.

  • Exceptions happen. Good companies know that and have designed an effective way to handle them.

  • You don't win any points from customers by just meeting their expectations with ordinary transactions in ordinary ways. You win points by adding the "extra" to the ordinary and by handling out of the ordinary transactions in an unexpected way.

  • There's a difference between efficiencies that are created to enhance the customer experience and efficiencies that are created to cut costs.

  • When economic efficiencies don't take the customer experience into account, they eventually create their own customer service related costs.

  • Unless you put customers on your payroll, they should not be made responsible for making sure your employees have done their jobs.

  • Apologies and service recovery are not the same thing.

  • When you lose trust, you lose everything.

In my mind, these are not particularly controversial management principles and practices. They're pretty logical, fundamental, and applicable to any company in any industry. Each one of these management principles could be the root cause of customer service excellence or customer service disaster. When the combination of all of them comes into play with one single transaction, then the potential for excellence or disaster multiplies exponentially.

Share on Facebook >>

So, here is the abbreviated (very, very, very abbrseviated) story of the one Fedex customer interaction that illustrates the importance of ten different managerial principles and practices.

A package in Orlando, Florida needed to be shipped to Houston, Texas. A happy and loyal Fedex customer, without even checking any other rates from any shipping competitors, went online to Fedex.com and filled out the shipping form.

The comedy of errors that then caused a two-day delivery to take two weeks to get to its destination required the involvement of two different customers on the shipping side and one customer on the receiving side to follow up daily with countless Fedex employees to make sure promised actions were taken. In contrast to the relentless customer follow-throughs, there was none from Fedex.

And when each of the Fedex employees did not do what they promised to do, it took the involvement of two customers on the shipping side and one customer on the receiving side to problem solve with the newest Fedex employees in the Customer Service chain of pain and to coach the newest Fedex customer service rep through their next steps. Quite literally the Fedex customers were forced to become Fedex managers.

It took two weeks of daily interventions (with no time off on weekends) to get one package from point A in Orlando, Florida to point B in Houston, Texas. You would think the delivery service had been provided by the pony express instead of Federal Express.

Just reading that summary must leave you wondering what sort of extenuating circumstances were involved that could cause a fairly standard shipping transaction to turn into a two-week drama. And there was one - just one. In the initial order there was a mistake on the street address where the package was to be picked up. That was a "circumstance," and everything that happened after that in the Fedex "system" caused the circumstance to become "extenuating." And exasperating. And infuriating. And absurd.

With the millions of packages that are placed into the Fedex system every day, surely there must be more than one per day which has a piece of incorrect address information. And surely each one of those misaddressed forms couldn't cost two-week delays and umpteen Fedex employee hours or else Fedex would extenuate themselves into bankruptcy.

Actually there is a safeguard that Fedex has in "the system" to handle address errors. The technical term for it is "Call the Shipper Using the Phone Number They Are Required to Provide." The first driver on the first day didn't do that and everything that went haywire after that was a result of a driver who thought it was easier to give up when he couldn't find an address than it was to make a one-minute phone call to confirm an address.

So the original Fedex service failure can be traced back to one action of one Fedex employee. But the Fedex service recovery disaster that followed was not the responsibility of individual employees, but rather the responsibility of the leadership team that has created (or allowed) a system that doesn't support the people who are responsible for delivering the service. This Fedex transaction is both a result of mismanagement and missed management.

It's probably easy to tell that in this case study I am the victim... er, um "subject." And my retelling of the story is my gift to Fred Smith as part of his 69th birthday celebration this past weekend. While some might think it's not a very "happy" offering for a birthday, I do believe that there's no greater gift to business leaders than to see the reality of today that's creating the path towards tomorrow. As the saying goes, Mr. Smith...Today is a gift. That's why they call it the present.

If you have a birthday gift or wishes that you'd like to give as well, here's Fred Smith's direct contact information >>

By the way... Fred Smith shares a birthday with Steve Wozniak, the co-founder of Apple (AAPL). August 11th seems to be a good day for giving birth to innovation.

Share This Story | Trending Retail Topics | Newest Articles & Updates | Free Retail Newsletter | E-mail Quote of the Day | Pinteresting Retail Pins | Follow on Twitter | "Like" on Facebook |


August 12, 2013 at 9:47 am
(1) jim says:

this article is confusing and poorly written

August 12, 2013 at 10:55 am
(2) Duane says:

“So the original Fedex service failure can be traced back to one action of one Fedex employee.” Actually, it can be traced back to you misaddressing the package.

August 12, 2013 at 12:04 pm
(3) Greg says:

I’m gonna have to agree with Duane. If FedEx moves 8 million packages per night, and everyone had the wrong address, but everyone said it would be very simple for you to just call me, would ALL 8 million packages still have to be delivered on time? Some responsibility must be incurred to make sure the “normal” procedure takes place. If you deviate from your responsibility, then you have placed a wrench in the gears of a well oiled machine, and unfortunately, you get what you get.

August 12, 2013 at 1:54 pm
(4) Fred says:

In the future, the “two customers on the shipping side” should take 2 minutes to QA the correct shipping address. The “system” likes correct addresses. I’m looking forward to your next article that blasts your cell phone provider for connecting you to a misdialed number.

August 12, 2013 at 2:58 pm
(5) Jack says:

Should retitle this: I put the wrong address on my package and it’s FedEx’s fault.

Probably one of the most pointless crybaby articles I’ve read.

August 12, 2013 at 4:11 pm
(6) Ricecakes says:

Today I received a FedEx delivery where my street number on the label was not even close. However the FedEx driver who delivers on my street recognized my name and knocked on my door to ask if the package was mine. So many times employees do go above and beyond to make service.
Happy Birthday to Fred!

August 12, 2013 at 9:58 pm
(7) Mike says:

FedEx touts itself as the best in the business. Even its tagline is “The World On-Time”.
With this type of boldness, if I ship a package especially (especially!!) via fedex.com, then that shipping site should be able to detect that I entered a bad address and alert me that there is a potential problem with the data I entered.
Seems to me that a good deal of FedEx’s exceptions could be eliminated at the point of address entry.

August 12, 2013 at 10:16 pm
(8) Geo says:

Actually the FedEx online ship manager does have an address checker. You just have to use it. Also as a FedEx driver I personally know that most address corrections can’t be handled in one Knute by calling the shipper at the phone number on the package. You generally get an operator who has to connect you to the shipping dept. who then has to locate the order to get the correct address. So you see if we did hat for every bad address we wouldn’t get the packages to the customers who addressed their packages correctly in a reasonable time. So please consider all the angles before you blast someone for doing their job.

August 12, 2013 at 10:54 pm
(9) Dave says:

But you all got to admit that two weeks for an address correction is poor at best.

August 13, 2013 at 10:55 pm
(10) Rick says:

I am a Fedex Express Dispatcher and have worked thirty years for Fred Smith and the Company he founded. I spend a considerable amount of time researching and correcting badly addressed packages and calling business customers to arrange their packages for reattempted deliveries. I know first-hand the amount of effort it takes to correct addresses, names, phone numbers, and zip codes. The per centage of incorrectly addressed packages has increased exponentially the last decade with businesses who outsource their customer’s order information using foreigners that barely speak English. It becomes a contest in our office to see who works the worst botched information that gets thrown our way. Granted, online shopping and purchasing continues double digit growth each year with no end in sight–which is great for Fedex and my job security. But the rapid transition from personal to online shipping has its consequences and adjustments. I know Fedex isn’t perfect and can, in some cases, make matters worse. Be assured—from someone with thirty years experience—that Fedex is changing with our economic climate and will more than meet future challenges and expectations. Our ability to make quick changes is one of our key advantages over the competition and positions us for a bright prosperous future.

August 14, 2013 at 11:06 am
(11) Jimbo says:

Sounds like it was written (poorly at that) by a wife of a UPS employee

August 15, 2013 at 7:07 pm
(12) Ron says:

Simply put the customer made a mistake. They put the wrong address on the package and want to blame someone other then themselves for their mistake.

While you can try and claim that a courier could have taken one minute to call the number provided, as others have pointed out that if everyone made that mistake FedEx would of have to make 8 Million calls each day.

Further, most companies do not want employees using personal cell phones for company business. You can thank unions and lawsuits for this rule. And I am not going to say it does not happen, many times a FedEx guy will call to see if a customer has a pick up… Above and beyond.

And you fail to mention if this package was express, ground, or home delivery. Simply put, you can’t pay for the least expensive option and expect white glove service.

FedEx has tons of issues, they are working employees harder and harder. I know this first hand since I have worked there for 20+ years…. It is not the same company it was. But to blame the company for a mistake you made is not the right course. You made a mistake, own it. The company make mistakes and they own it. 8 Million packages delivered a day and you think that your single package THAT WAS WRONGLY ADDRESSED means there is a problem with the system?

FedEx has issues, at times I think they are trying to kill their employee’s with extra work, and the voluntary buyouts they just had just signaled that they are going to increase our work load again….. And we are not going to get a raise for well over the next year….. The company is not taking care of the employees like they used to…. This is all true

Like I said, FedEx has its issues, but not delivering a package that was sent by the shipper to the wrong address on time is not one of those problems.

August 16, 2013 at 1:19 am
(13) CH says:

1st of all if the pickup address was incorrect this is the fault up the person that scheduled the pickup. Drivers are on a time schedule and don’t have time to call customers when they’ve provided an incorrect pickup address. If the pickup address was wrong then the address might be on another route on the other side of town. Secondly no mention is made of when this was picked up. Was the delivery address incorrect as well? This person doesn’t have a clue but the blame it all on FedEx wow

August 16, 2013 at 11:18 am
(14) RJ says:

This article reminds me of thousands of other customer inquiries I have dealt with. If the shipper had done their job right initially, most likely this package would have been delivered on time. I believe some customers think we in this business have a secretive room with employees just looking up packages which were tendered to FedEx with recipient information incomplete or wrong.. While we have many employees with this responsibility, they also have other critical functions to complete. I can say first hand, FedEx has thousands of employees who not only meet our customers expectations, but go well beyond. I have worked off the clock, drove my own vehicle to deliver packages, even climbed over a barb wire fence to deliver a package of medication. I will stack this group of employees against any other company, period!

August 31, 2013 at 3:53 pm
(15) Gene Holmes says:

My daughter Marianne Nash is a photographer in Cumming GA. She bought some camera equipment from another state for premium delivery by Fedex on Friday Aug 30, in order to use it at a wedding on Saturday. For obscure reasons, Fedex first diverted her package to Indianapolis, then just left it over the Labor Day weekend in an unopened container at Fedex’s Atlanta ramp. This despite our repeated pleas to send someone to open the container and finish the promised delivery in time for the wedding. In the long run, the consequential damages that Fedex will have to pay for callously disregarding Marianne’s contractual rights, will far outweigh what it would have cost to send an Atlanta ramp crew member back to retrieve the overlooked package. This is not the same company that Fred Smith and Jim Barksdale built. More like the government now.

September 8, 2013 at 1:51 pm
(16) Anne says:

This article is typical of what we see in today’s society: not assuming responsibility for our own actions and finding who to blame for our wrongdoings.

September 12, 2013 at 11:37 pm
(17) Cella says:

2 weeks to fix a problem? Please, what an idiot company. I like UPS a whole lot better. They bring all your packages together. FEDEX has multiple trucks, FEDEX GROUND, AIR, HOME DELIVERY. They to figure out which one has your package.

September 20, 2013 at 1:42 pm
(18) MikeD says:

FedEX service over the last eyar has become nonexistent. I live in an apt building and FedEX said they were unable to access the building when they never even used the call system. On the most recent delviery attempt, the web site has been incorrect and three times FedEX has promised a call back of the status and three times FedEX has failed to call back. I have been promised that the package would be held at a local FedEX office and it is still in the distribution center. If FedEX could screw it up, they have.

November 22, 2013 at 8:38 am
(19) PattBa says:

I just had my own customer ‘experience’ with Fed Ex. A package from NJ to NY to be delivered to an apt. The apt building is secured, but the management office is not. The delivery person did not call the phone number I put on the delivery ticket, did not inquire at the office, just pulled on the main door, saw it was locked, and called it a day. The delivery, which was critical, did not occur.

Their ‘solution’ was to offer a second attempt the next day some time before 8pm. Unacceptable. The recipient was leaving town that afternoon. If 2 day delivery was acceptable, I would have used the USPS and paid 80% less.

The ‘service’ representative did nothing but repeat the exact same text I was getting on the website, was completely unconcerned about the late delivery, and could nothing other than offer a ‘request’ to deliver the package one day late and before the recipient was leaving. No explanation on the driver’s failure to call the number or stop at the office that he walked past to get to the main door. With all the secured apt buildings in NY, Fed Ex *has* to have a procedure for dealing with this. Delivering to apts does not require sorcery.

They’re sending the package back to me. It’s anticipated delivery date? One WEEK. Never again. UPS or USPS from now on.

December 23, 2013 at 6:15 pm
(20) Mike D says:

Over the last two years, FedEX service has become terrible. FedEX website says that delivery was attempted but I’ve been home and no attempt made. I live in an apartment and many of the residents are reporting the same problem. Friends have confirmed that it not just the driver for my area. FedEx sucks now

January 9, 2014 at 3:07 am
(21) Stephanie says:

Federal express is a poorly managed corporation. I will no longer do business with companies who choose FedEx as their courier. I have had great luck requesting a company send my packages via UPS.
FedEx employs some of the laziest people I have ever have had contact with. Fred Smith isn’t paying attention to the numerous problems. Doesn’t have the stamina to publish his number. When a CEO becomes complacent about customer service or lack thereof; doesn’t take long for employees to follow suit.
As customers, remember you can always choose who you do business with and who you will not.

January 29, 2014 at 12:24 am
(22) Fiona says:

This article makes me laugh, partially because I used to work for FedEx. The writer claims that FedEx made the mistake because ” In the initial order there was a mistake on the street address where the package was to be picked up.”

Well, Ms. Farfan, who exactly made that mistake? Did YOU give them the wrong address when arranging to have the package shipped? (at the end of your rant you do admit that you’re the customer in question). I can tell you with some authority that this is exactly why FedEx requires the CUSTOMER to fill out airbills or ground bills themselves. True, computers are used when processing a shipment, but if an address doesn’t match up with a person’s name and is still a viable address, FedEx will probably ship it. I’m laughing at you right now, because you’re the one that caused the package to take a two-week journey. And like another commenter said, if you think FedEx has employees who do nothing but call numbers to make sure an address is correct, you’re living in fantasy land. Bottom line: YOU screwed up and you want to blame someone else. Butch up and take some responsibility for YOUR mistake.

February 19, 2014 at 12:35 pm
(23) Richard Hesel says:

I have been a regular FedEx shipper but no longer. The prices are outrageous and the service is slipping badly. Example: shipped a small, well-padded package of plastic parts yesterday. They arrived completely smashed, as if FedEx had run over the package with a steam roller.

Frankly, the USPS now does a much better job at much lower cost. I’m done with FedEx. They’ve just become another example of corporate crap.

April 8, 2014 at 11:45 am
(24) Jose says:

Fedex by far the best service in the USA, (still use others like USPS , UPS, DHL) but Fedex are simply better in prices shipping time customer service)
poor narration by the way.

April 14, 2014 at 2:47 pm
(25) Kathleen T says:

Even if Ms. Farfan takes the hit on an incorrect pickup address, there is still a systemic issue within FedEx to address routing problems. It should have taken ONE phone call from Ms. Farfan to FedEx to correct that address once the package was not recovered on the requested time/date.

May 2, 2014 at 7:14 am
(26) dee says:

I’m sorry M’aam but YOUR mistake cost YOU. I agree with the majority of comments. If something starts with an error, how well do you really expect to end. Put on your grown up panties and fess up, you f’d-up NOT FedEx, YOU are to blame. Shame on you for being so oblivious and entitled to not even admit your fault in the debacle.

May 11, 2014 at 6:26 am
(27) Frederick Rotgers says:

Not surprisingly, FedEx continues with this nonsense even months later (despite all the objections of FedEx loyalists and employees, this company is rotten–in the literal sense!). Add to the laziness and negligence that created this problem dishonesty. I was scheduled for a FedEx delivery yesterday and waited at home all day until 2:30 when I checked the tracking site. At no time did I leave the house, yet there, in BOLD RED TYPE was the message that a delivery exception had been made because “Customer unavailable or business closed”! I will certify and swear an affidavit (and plan to as I join in the pursuit of honesty and proper service from FedEx) that I was ALWAYS available, and was ESPECIALLY available at 12:37 PM, the time the FedEx driver alleges he/she attempted to deliver my package. Rotten? Absolutely! Dishonest?
No question in my mind! I have already stopped doing business with any vendor who uses FedEx. Perhaps we all should. That might provide a wake-up call!

Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.