Cash Collection Policies of FedEx Bangladesh

Cash Collection Policies of FedEx Bangladesh

This report was basically prepared on the company which is the world’s largest Express Transportation Corporation known as FedEx Express. This report is confined with the Global operations of the company but more focused on the Bangladesh Context of FedEx where they are being represented by the Joint venture and licensee of Federal Express Corporation named FedEx-Bangladesh Express co Ltd.

The main objective of the report is the company’s cash and credit collection policies/methods. FedEx does 90% of their business on credit. So credit customers are the most important aspect of their business when it comes to revenue earning. The credit customers have their profile account in FedEx and are invoiced with a monthly bill. They do their monthly transactions and pay the bill to FedEx for their service at the end of the month. There are special customers who are provided with discounts by the approval of the senior management team according to the amount of business they give to FedEx. This part of the topic is not covered in the report as the information of the clients and the discount rates are confidential. The sales personnel of the company plays a key role in approaching potential customers and also collect the due payments at the month end from them. The finance and accounts department makes the invoice and does the billing every month and keeps track of the receivables. FedEx is a service company, so their main functions are customer service and satisfaction. The financial aspects of the company are not as critical as other non-service companies. I was mainly appointed to work in the finance department and hence provided as much information that was provided by the head of the department. The various departments, operational overview, sales and marketing overview and other important areas of the company are concisely shown in the report.

Finally I have also suggested various probable recommendations, those I feel can be of help in order to improve the situation and recommended various other options to develop the overall credit collection strategy.


Overview of FedEx Express:

When the FedEx Corporation (from herewith to be referred to as “FedEx”) was founded by Frederick W Smith in 1973, it was called “Federal Express”. He started Federal Express with funds of over $80 million, making it the largest company of its time ever funded by venture capital.

Today, FedEx has over 143,000 workers worldwide, and delivers more than 3 million express packages to 220 countries daily. FedEx provides both document and freight deliveries as well as additional supporting services. Based in Memphis, FedEx Corp. provides a portfolio of transportation, e-commerce and business services through several divisions including FedEx Express, FedEx Ground, FedEx Freight, and FedEx Office (formerly Kinko’s).

FedEx Express, the largest segment of FedEx, is the worldwide leader in the global air express industry at the moment. The worldwide network of transportation and information system of FedEx Express set the industry standard for time-definite delivery, shipment processing and tracking technology, logistics management, reliable service and customer management.

FedEx live by their ‘Purple Promise’- where they try to “make every FedEx experience outstanding”. This is the foundation of their business. Having such values has helped FedEx maintain strong reputation in the market, receiving awards such as FORTUNE’s “Top 10 World’s Most Admired” and “100 Best Companies to Work for” (source: 2009Annual Report). Additionally, FORTUNE magazine recognized FedEx for its commitment to diversity and women among the “100 Best Companies to Work For.” FedEx is the largest company (by number of employees) and the only transportation company on that year’s list.

Following from the above overview, FedEx was at one points called FDX Corporation, FedEx Corporation was founded in January 1998 with the acquisition of Caliber System Inc by Federal Express. Through this and future acquisitions, FedEx sought to build on the strength of its famous express delivery service and create a more diversified company that included a portfolio of different but related businesses. With the purchase of Caliber, FedEx started offering other services besides express shipping.

In January 2000, FDX Corporation changed its name to FedEx Corporation and rebranded all of its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. A new subsidiary called, FedEx Corporate Services was formed to centralize the sales, marketing, and customer service for all of the subsidiaries.

FedEx Packaging:

  • FedEx Letter
  • FedEx Pack
  • FedEx Boxes
  • FedEx Tube
  • FedEx 10 Kg Box
  • FedEx 25 Kg Box
  • Customer Package


FedEx Regions of the World:

FedEx has divided its service regions of the world into 11 different regions. They are Africa, Asia Pacific, Australia, Canada, Caribbean, Central America, Europe, Indian Sub-Continent, Mexico, Middle East and South America.

FedEx Express 5-Point Strategy:

Federal Express has five strategies that govern business tactics. These are as follows:

  1. To improve service levels
  2. To lower unit costs
  3. To establish international leadership and sustain profitability
  4. To get closer to the customer, and
  5. To maintain the People-Service-Profit Philosophy.

In ‘People-Service-Profit’ philosophy ‘People’ goal is the continuous improvement of management’s leadership, ‘Service’ standard is 100 percent customer satisfaction and ‘Profit’ goal is much like any other company’s goal.

This philosophy governs how FedEx runs its business, and defines strategies. First-Mover Advantage of FedEx Express:

Federal Express has had first-mover advantage in several areas, including:

  • Being a global express transportation company.
  • Advanced technology and communication throughout the company’s operations.
  • Incorporating smaller companies with similar operations under its belt to synergize and control more of the market.

In 1994 Federal Express officially shortened its marketing identity to FedEx; a term that has become a synonym for “to ship overnight” FedEx was first use the web with a online package tracking service in November of 1994. Strategic use of

Information Technology and online package tracking systems, reliability, and faster service helped Federal Express gain market dominance in express market worldwide. In January 2000 FedEx Express became FedEx Corporation by acquisitions of FedEx Ground, FedEx Trade Networks, FedEx Customer Critical, FedEx Services, and FedEx Home delivery, FedEx Express, FedEx Freight.

Though the company did not show a profit until July 1975, it soon became the premier carrier of high-priority goods in the marketplace and the standard setter for the industry it established. In the mid-1970s, Federal Express took a leading role in lobbying for air cargo deregulation that finally came in 1977. These changes allowed Federal Express to use larger aircraft (such as Boeing 727s and McDougall DC-10s) and spurred the company’s rapid growth. Today FedEx Express has the world’s largest all cargo air fleet, including McDonnell-Douglass MD-11s and Airbus A-300s and A-310s. The planes have a total daily lift capacity of more than 26.5 million pounds. In a 24-hour period, the fleet travels nearly 500,000 miles while its couriers log 2.5 million miles a day the equivalent of 100 trips around the earth.

The company incorporated in June 1971 and officially began operations on April 17, 1973, with the launch of 14 small aircraft from Memphis International Airport. On that night, Federal Express delivered 186 packages to 25 U.S. cities from Rochester, NY, to Miami, Fla. Company headquarters were moved to Memphis, Tennessee, a city selected for its geographical center to the original target market cities for small packages. In addition, the Memphis weather was excellent and rarely caused closures at Memphis International Airport. The airport was also willing to make the necessary improvements for the operation and had additional hangar space readily available. Today FedEx is the world’s largest allcargo airline, with over 600 aircraft linking together a truly global network.

Everyday, 9 major sorting centers or hubs worldwide feed 39,500 delivery vehicles that cover an amazing 2.5 million miles around the globe. Over 140,000 employees at FedEx provide services in 215 countries, offering some of the fastest delivery. Providing on-time delivery builds reputation for FedEx.

Everyday FedEx successfully delivers over 26.5 million pounds of freight and nearly 3.2 million packages worldwide. FedEx’s service reputation helped fuel its growth from small beginnings in the US back in 1973 to today’s global turnover of more than $ 15.5 billion. The company entered its maturing phase in the first half of the 1980s. Federal Express was well established. Competitors were trying to catch up to a company whose growth rate was compounding at about 40 percent annually. In fiscal year 1983 Federal Express reported $1 billion in revenues, making American business history as the first company to reach that financial hallmark inside ten years of start-up without mergers or acquisitions.

Being a “first” company resulted in many firsts for awards and honors, too. In 1990, Federal Express became the first company to win the Malcolm Baldrige National Quality Award in the service category. It also received ISO 9001 registration for all of its worldwide operations in 1994, making it the first global express transportation company to receive simultaneous system-wide certification.

FedEx’s commitment, use of technology and innovation strategy has proven to be a key part of its success through the past two decades. FedEx was first to operate a hub and spoke distribution system and first to introduce full shipment tracking.

FedEx maintain control of customer’s shipment by scanning it at several stages of transit using hand-held computers, Super Trackers, so that where the shipment is can be easily and exactly known. Through the Internet customers can have access to on-line tracking, transit time estimates, country specific information, and many other on-line features.

In January 2000, FDX Corporation changed its name to FedEx Corporation and rebranded all of its subsidiaries. Federal Express became FedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. A new subsidiary called, FedEx Corporate Services was formed to centralize the sales, marketing, and customer service for all of the subsidiaries.

Overview of FedEx-Bangladesh Express Co. Ltd:

Bangladesh Express Company Limited (BANEX) was established in 1991. It is a private limited Company – registered in Bangladesh. The company is the exclusive licensee of Federal Express Corporation of USA since May 1991. BANEX is the Global Service Participant (GSA) of Federal Express. The company, with its 18 world service centers and about 295 staff offers express export and import services assisted by electronic communications system.

BANEX currently has access to around 368 airports in 214 countries through the operations of its principal, FedEx. The company maintains online communication system for faster shipment trace and tracking.

BANEX uses Electronic Communication System for faster shipment tracing & tracking and also for the integrated communication with all the FedEx service centers worldwide. The company has to follow the rules and regulation of FedEx that is reflected by the monthly SRG (Service Reference Guide), but can take sales and marketing plan independently. Like FedEx, BANEX’s top priority is to achieve service excellence and 100% quality. Customer satisfaction is the ultimate goal of BANEX. Keeping this in view, BANEX created a vast network with its customers by visiting every week and providing solutions to their problems. Also through online, Customer Service Agents are always keeping track of shipments of customers. BANEX is totally committed to provide quality services that always meet the needs and expectation of customers for reliability, safety, economy and on-line delivery of shipments. The company exercises Quality Management System (QMS) and continual improvements of its services, that can be comply with the requirements of ISO 9001-2000.


Mission Statement of BANEX:

Bangladesh Express wants to be acknowledged as the market leader in the express transportation solutions and services. They shall continuously strive for excellence by using their dedicated team of professionals and the development of the infrastructure; they will set them apart from the other. BANEX shall adapt to the latest technical know-how in enhancing productivity and creating a truly world class customer friendly organization.

We will ensure that everyone across the organization understands our mission. It will be like a beacon of light that will show us the way and take us from one year to another and also allow us to reaffirm that we are not only the right path but also the path we had exactly planned to take. We will be leaders through business excellence, clearly of operational process and the value and quality of our service.

Above all, our growth strategies will be defined and clear to all our workers and associates. We will always have the all-for-one mentality”

Quality Policy of BANEX:

A quality policy describes the total plan of a company for providing the feathers and characteristics of a product or service that bear on its ability to satisfy most of its customers. The Managing Director of BANEX adopted a quality policy. The quality policy is as follows:

“BANEX is totally committed to provide quality services that always meet the needs and expectation of customers for reliability, safety, economy and online delivery of shipments. To achieve this objective, BANEX provides all the necessary resources to ensure a well equipped, adequately trained and experienced manpower to take proper care of customer requirements. BANEX emphasizes that quality is the shared responsibility of its entire staff. The company ensures that all the personnel are familiar with and work to the company’s work policies as well as in conformity with the legal and other obligatory requirements and are determined to comply with the requirements of ISO 9001, 2000 and continually improve its services and Quality Management System (QMS). This QMS has brought the unique opportunity for BANEX to review the quality objectives and achieve business excellence through continual improvement. Customer satisfaction is the company’s ultimate goal.”

Objectives of the Report

The report contains the following broad objectives:

  • Orient the reader with FedEx in brief.
  • Gathered an idea about the function and operation of Bangladesh Express Co. Ltd (BanEx).
  • Analysis the current outbound and inbound practice of shipments in BanEx.
  • Analysis the policy guide lines of F&A department of BanEx.

Report Preview

The report is divided into three major parts. The first part describes the Federal Express Corporation in brief followed by an overview of Bangladesh Express Co. Ltd. In the second part. In the third and final part, current outbound and inbound practice of shipments in BANEX Co. Ltd. is described and recommendations are made.

Type and Sources of Information

Only secondary data has been used to formulate this report. For the organizational overview, information were collected from various sources that includes previously carried out research works, interview with the respective authority of BANEX, inter office notice boards, publications that includes monthly SRG, GSP News, the Internet and other prospectus of FedEx, and the personal experience of the writer during the Internship.


Customer Service & Operations (CSSV & OPS) Department:

The customer service & operations department works under the supervision of both Managing Director and Executive Director of the company.

The department also has a DGM, two Assistant Managers for Hub-Operation and CSSV & OPS, four In-charges, some couriers and dispatchers. Front counters, Customer Service Agents of Call Center, Senior Executives of Import and Export and Chief C & F are also included in this department.

During the Internship period, the report writer observed that, officials of this department remain extremely busy for coordination with the customers and processing of shipments. The people of this department also entertain the new comers-for example; conduct of the newly recruited employee and internship program was the responsibility of this department. The most important job of this department is all the necessary formalities of outbound and inbound shipments.

Therefore, this department is the backbone of the company.

Operations of CSSV & OPS in brief as follows:

  • Operations of Outbound Express of CSSV & OPS (Document & Non-Document)
  • Welcoming walk-in-customers and receiving shipments directly from them
  • Receiving of customers call, recording it into pick-up sheet and assigning of courier to the attend customer
  • Receiving of shipments form customs and bringing it to WSCs
  • Verifying, processing of shipments and forwarded to central hub.
  • Tally with transfer challenge for checking, verification and sorting of shipments at hub
  • Consolidation, manifest, and dispatching to airport
  • Receiving of shipment at airport, addressing airport formalities, and handling over the shipments to airlines
  • Sending pre-alert to all gateways-Dubai, Singapore and Hong Kong.
  • Operations of Inbound Express of CSSV & OPS (Document – DOX)
  • Receiving pre-alert from Dubai, Singapore and Hong Kong and passing the prealert information to senior executive import
  • Collecting of MAWB form freight import at airport for customs release of documents console bags
  • Bringing document shipments to freight transit area for scanning and then to BANEX cage
  • Examination and release of documents shipment and bringing to hub
  • Scanning & sorting at hub and forwarding to WSC for delivery
  • Tally with shipment challenge and starting delivery
  • Proof of Delivery (POD) scan and preparation of non-conformity.
  • Operations of Inbound Express of CSSV & OPS (Document – NON- DOX)
  • Receiving pre-alert from Dubai, Singapore and Hong Kong and passing the prealert information to senior executive import
  • Collecting of MAWB form freight import at airport for customs release of nondocuments console bags
  • Bringing non-document shipments to freight transit area for scanning and then to BANEX cage for Received In Country (RIC) reporting, sorting, miss-routed, shortages and overages.
  • Preparing of Shipment Arrival Notice and delivery of it to consignees
  • Clearing of NON-DOX shipments from customs if consignee authorize
  • Consolidation of cleared NON-DOX and transportation to import dept. and then forwarded to XSCs
  • Delivering of shipments by respective XSCs
  • Proof of Delivery (POD) scan and preparation of non-conformity report if applicable
  • Investigation of customers complain in case if non-conformit.

The following items are NOT acceptable for transportation via any FedEx Express USA service (package or freight)

  1. Cash, currency, collectable stamps, and coins
  2. Live animals, including birds, reptiles, fish except via our Flying Tigers Air Cargo Service. Edible seafood, such as live lobsters, crabs or other types of shellfish for human consumption are acceptable, provided the shipper is in compliance with state and federal laws.
  3. Animal carcasses will not be accepted. Animal heads and other parts for taxidermy may be accepted but must be properly packaged. Restrictions do not apply to materials intended for consumption.
  4. Human corpses or body parts, cremated or disinterred human remains
  5. Shipments whish require us to obtain a federal state or local license for their transportation.
  6. Shipments, which may cause damage or delay to equipment, personnel other shipments.
  7. Lottery tickets and gambling devices where prohibited by federal state or local laws.
  8. Hazardous waste, used hypodermic needed less and / or syringes or medical waste.
  9. Packages/shipments those are wet. Leaking or emit an odor of any kind
  10. Packages that are wrapped in Kraft paper
  11. Shipments whose carriage is prohibited by law, status or regulation of any state in which the shipment may travel
  12. Shipments whose carriage is prohibited by applicable federal, state or local law.

Call Center

One of the busiest departments of the company is call Center. Customers call at FedEx Call Center for the status of shipment, complain, credit balance, rate, etc. and highly efficient and expert Customer Service Agents (CSA)

Provide complete solutions with a you-view-point, “Hello, FedEx Call Center, how may I help you?” Accessing the FedEx international package information system, COSMOS, agents can quickly advice customers about such things as paperwork Requirements, packaging, customs procedure and acceptable commodities. Call Center is open 24 hours. There is an In-Charge of Call Center who coordinates and assists CSAs.

Operations of Call Center in brief:

  • Tracing and tracking of shipments 24-hour basis
  • Customer complains, claims, inquire handling
  • Reporting on service failure to Dubai
  • Addressing non-conformity and report to Dubai.


The responsibility of Sales Department is to sell BANEX / FedEx Products / Services and enhance company’s image in the market by understanding and reviewing customers needs and requirements at different levels. The Deputy General Manager, Sales fixes a sales target for all sales personnel at the beginning of BENEX financial year based upon the decisions of management. A weekly planning of sales activities is also done and discussed in the weekly meeting of the sales department for its effective implementation.

Sales people have to make minimum seven sales calls daily including two new and five existing customer through face-to-face sales and also through Tele sales.

The sales people also evaluate the credit worthiness of the clients and the amount of credit is approved by the DGM, Sales.

Vision statement of Sales Department of BANEX:

  • Maintain year over year IP growth by at least 15%-20%
  • Identify new customer segments and develop them according to their projected growth
  • Develop the existing accounts further
  • Increase the number of agents in strategic locations to tap new business and
  • ensure our presence across the country.
  • Introduce various FedEx products in the Bangladesh Market
  • To meet the future demands of the market we will devote ourselves to introduce and sell various FedEx products in the Bangladesh market such as IXF, IPF, IPD and IEF.
  • Invest in the development of Sales professionals
  • Effective training for the sales professionals in FedEx products, services, and solutions, self-development and motivation to make them tremendously competent and the best in their field. Create conviction, commitment and passion in selling FedEx
  • Provide logistical support to the sales force like access to computers, Internet and FedEx related information that can be used as a selling tool
  • Access to customer data to analyze customer behavior, patterns, trends and customer segmentation for future business strategies.

The department accomplishes the following sequentially tasks:

  • Search & target prospects and plan for sales call (weekly sales planning through internal, external and other sources)
  • Set primary & alternative call objective and face-to-face calls daily (7calls daily including 2 new and 5 existing)
  • Access business needs of customers and offer BANEX services
  • After negotiation with the customer propose rates and services for approval through the Area Sales Manager
  • Prepare offer letter with net rates and obtain acceptance (verbal or written) from customer
  • Signing service contract with credit customer and open profile account
  • Distributing account profile among concerned dept.

Finance and accounts Department

The major objectives of Finance & accounts Department are as follows:

Verification of the physical existence of all company’s assets and thus ensuring custodianship. Monitoring as well as assessing proper IT requirements pertinence to the activities of the company and there by facilitate accounting procedure and achieve financial growth. To implement the financial policies of the company and to revise the policies as per needed. In Accounts parts of this department have —-

Billing section: This sector monitoring all the prepaid accounts postpaid accounts preparing monthly, fortnightly, weekly and export miscellaneous invoice for exporting shipments and importing shipments with their duty and taxes.

Sequentially the activities of billing section are following:

  • Airway bill entry in to computer system and storing.
  • Validation sheet checking.
  • Discount brand.
  • Customer profile for new customers including customer instruction (if any).

Miscellaneous sector: This sector controlling the cash in flow and out flow Like walk in customer payment, credit collection from profiled customer and internal and external expenses. Sequentially the activities of imprested accounts section are following:

  • Checking time period.
  • Storing vouchers, getting approval
  • Verifying figures with summary statement
  • Posting accounts into imprested accounts.
  • Maintaining staff recorded on attendance recruitment transfer, interest and promotion.
  • Preparing/verifying salary statement–paying /transferring bank accounts.
  • Consideration of income tax.
  • Payment revived with documents and making payment. Posting of accounts as per accounting standers.
  • Providing and distributing different report as required. Implementing /attending internal and other financial audits and addressing issues of any.
  • Assessing / paying VAT, income tax –as per regulatory requirements.
  • Submitting return to government authority in time.


Marketing Department works under the supervision of the Executive Director. This department consisting of Marketing Specialist whose main job are planning and implementing of marketing activities such as advertising, promotional campaigns, public relations, providing market information to Sales department and communication with FedEx. BANEX present advertising includes billboard ads, brochures & booklets and directories. Presently BANEX is not using media like television, newspaper for advertising. Promotional campaigns include festival bonus, complimentary gifts, and discounts. BANEX also sponsors sporting events, fairs, trade shows, etc for keeping relation with public as its marketing strategy.

The major activities of this department can be listed as follows:

  • Develop marketing plans and strategies to maximize FedEx
  • Brand awareness and visibility in Bangladesh
  • Take care of FedEx brand promotional activities
  • Carry out market research, customer satisfaction survey
  • Collect and review information on market, top competitors.

Electronic Data Processing (EDP) and Information Technology (IT)

Information Technology Department of BANEX acts as a bridge between management team and operation. A software named COSMOS, developed by

IBM, used by FedEx worldwide as well as BANEX. The major job of IT dept. is to provide 24-hour trouble-free operation of BANEX communication system.

The department accomplishes the following tasks:

Electronic data processing for manifestation AWB, credit cash, AFR, credit PP, etc.

  • MIS related activities, report producing, and data backup and system security.
  • Planning and executing maintenance activities of IT and net work equipment
  • Software programming, system support, system design and analysis.

Human Resource department and Administration:

Sequentially the activities of human resource department are following:

  • Develop and implement HRD policy
  • Select and higher staff
  • Assess executive training need, if decided by the management
  • Schedule and executing training
  • Evaluated training effectiveness
  • Staff administration.
  • Year performance evaluation of staff
  • Plan and schedule training on monthly /six monthly basis.


The success of the express companies is largely depends on reliability, faster service, and 100% accuracy. Express companies have to engage themselves into more strategic decisions to keep the business sound. FedEx uses innovation strategy and strategic use of information Technology and online package tracking systems, reliability, and faster service helped Federal Express gain market dominance in express market worldwide. Bangladesh Express Co. Ltd. also practices the strategy being the part of FedEx. BANEX is offering such a service that has a unique value in our day-to-day busy life. There is little scope to recommend. Because, BANEX is practicing FedEx operation very effectively and efficiently. The recommendation below only depends on the personal experience of the report writer during the internship period.

The recommendations are:

  • Couriers need to be more careful for the processing of shipments and executing Air Waybills. It may reduce time as well as miss routing. All the necessary export documents should be attached with the shipment accurately.
  • The sales people should be given more training on communication for effective sales and faster credit collection
  • The company should enhance advertising and promotional campaigns like exclusive TV ads, more billboard ads. Though FedEx is renowned name worldwide as well as in Bangladesh, exclusive TV ads may result more market growth.
  • Cost is a major factor in Bangladesh. If there is any scope to reduce cost, the company should do so. Because, competitors like D H L is gathering more market share in Bangladesh by reducing cost.
  • Proper trend manpower add for different sectors like to attend inbound call, out bound call to provide and receive e-mail, fax and tracking in the present position of shipments in call center
  • Current situation of Hub cross the label of satisfactory but there is a lot of opportunities for improvement—like addition of skilled manpower to perform the work more effectively by efficient work force.



Banex service in Bangladesh, is the strong brand of Federal Express Corporation of USA, has been tested by the people form all profession but the highest numbers of consumers who have tested BANEX services are from the readymade garment industries. From the consumer survey it is clear that US exporter switch over strong brands Europe base exporter are generally hard core loyal to their brands DHL and UPS. Banex service is the highest selling of Fed Ex brand in Dhaka Metro in non-document market .It has 55% weight shear of the nondocument market of Dhaka metro no other brand of FedEx has a constant trended of sales in non-document market. So it can be said, Banex service does not face any tough competition from other brand. The sale personal play an important role in motivating a consumer to purchase a strong brand.32% of the consumer were attracted by Banex /FedEx service for its image building capability. It was also found that Banex attracted 35% of the consumers by its modern concept.

They think this brand gives them separate value for money from other competitors.