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Before becoming the billionaire founder of FedEx, Fred Smith was a Vietnam veteran with a passion for flying and a small fleet of planes available for hire. He recalled, “They’re hiring me and this whole damn airplane to carry this little part,” as he transported goods for companies like Xerox. Soon, tech giants like Burroughs, Sperry, UNIVAC, and IBM began utilizing his services to transport parts from Asia to the rest of the world, marking the beginning of the automation of society.
Smith spoke at Goldman Sachs’ annual Builders and Innovators Summit, discussing how data from FedEx, which moves $2 trillion worth of goods annually, predicted the rise of companies like Tesla and Nvidia. He emphasized the company’s ability to identify trends in the economy and foresee future developments.
Founded in 1971, FedEx has grown to operate over 700 aircraft and 200,000 vehicles, generating billions in revenue. Smith attributed the company’s success to software that enables real-time tracking of goods in transit, revolutionizing logistics.
By leveraging data provided by their tracking software, FedEx can anticipate trends and adapt their services accordingly. For instance, the company is currently shipping Nvidia chips and John Deere pallets to various destinations. Smith also highlighted the trend of supply chains regionalizing on a “China Plus One” basis, with investments shifting to locations like Eastern Europe and southern Mexico.
Despite geopolitical tensions and trade disputes, Smith believes that imposing tariffs is not a sustainable solution. He argues that global markets are interconnected, making it difficult to isolate one nation without affecting others. Instead, he advocates for more nuanced approaches to international trade that acknowledge this interconnectedness.
Smith emphasized the complexity of global supply chains, where goods flow seamlessly between nations, challenging the effectiveness of tariffs in addressing trade issues. He believes that understanding the interdependence of markets is crucial for developing effective trade policies.
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