Why Federal Express Became FedEx

Why would a company with a name so recognizable that it has become the generic equivalent of overnight delivery service choose to revamp its identity? For Federal Express, global success demanded a change. The challenge came in preserving its brand equity, while ensuring that its identity stood out from a growing field of global competitors.

Under a cloak of secrecy on June 22, 1994, a mysterious aircraft landed on a darkened runway in Memphis and was swiftly guided into an awaiting hangar. Only a handful of security guards standing watch against intruders witnessed the late night operation, which took less than 20 minutes to complete.

Two days later the whole world knew the secret. With news media, public officials and 4,000 FedEx employees present (and another 100,000 employees watching the event on the company's private FX-TV), the world's largest overnight delivery carrier unveiled its new corporate identity -- the culmination of two years of research and design and weeks of clandestine implementation. Video relays around the globe carried an event that usually doesn't get much play beyond a company's in-house newsletter.

In typical style, FedEx had arrived in a bold way. The company that spawned an industry in overnight package delivery services, won the first Malcolm Baldrige National Quality Award in the service category, and ranked among the top ten of "The 100 Best Companies to Work for in America" in 1993, again showedthe world how to do it right.

What's more it chose to undertake an identity review while at the forefront of its industry, acting from a position of strength. As early as 1988, FedEx management discussed overhauling its original identity system designed by Richard Runyan in 1973, believing it did not represent its expanding global interests.

Indeed, things had changed. When FedEx originated the industry in 1973 -- based on a hub-and-spoke concept that FedEx founder and CEO Fred Smith had earlier outlined in a Harvard MBA paper (which got low marks) -- it was the lone player in it. The fledgling company started with 14 Falcon jets. Employees used their own cars and a small fleet of rented vans to pick up and drop off packages. Nationwide door-to-door overnight delivery was considered so radical, skeptics abounded. Xerox Corporation even tested the system by shipping empty boxes for two weeks before entrusting Federal Express with real documents.

But work it did. Today FedEx operates in more than 200 countries, using a fleet of 458 aircraft (making it the nation's third largest airline) and 45,000 vehicles to deliver an average of two million packages each day. Given this growth, Federal Express asked itself whether the "big and bold but friendly and accessible" image it wanted to convey was getting across. That question also entered the mind of Landor Associates, a worldwide brand and identity design consultancy, as it considered changes occurring in the air freight industry. In 1990, Landor presented this case to Federal Express management. Although it created a favorable impression, the timing wasn't right for FedEx. With millions of logo applications on vehicles, aircraft, storefronts, uniforms, drop boxes, packaging, collateral material, stationery and business forms involved, "the need hadn't yet reached a critical mass," recalls Gayle Christensen, FedEx managing director of corporate marketing. "That happened only when it was clear that our image no longer looked fresh and our logo no longer worked in all the different ways it had to be applied."

In late 1992, Federal Express invited Landor back. "We were asked to take a good hard look at the company and its markets, assess Federal Express's position, and make any needed adjustments," says Lindon Leader, senior design director at Landor. Over the next year, Landor's research unit conducted some 40 focus groups with employees and customers and interviewed industry leaders in 12 markets around the world. It also compared Federal Express's existing identity with the identities of a range of technology-smart companies known for innovation and marketing savvy.

Its research showed the existing identity had two great strengths: the strong brand equity of Federal Express (and its popular verb form FedEx) both closely identified with speed, reliability, innovation and customer service, and the power of its signature colors purple and orange to communicate urgency and leadership. Research surveys also uncovered problems with the word federal. In 1973, the word had given the company immediate equity, an official alternative to the post office, but today it was more often associated with being bureaucratic and slow. In Latin American countries, it conjured images of the federales, and in some other parts of the world, people had trouble pronouncing Federal Express.

Based on its worldwide focus group research, Landor recommended that the company shorten its brand name to "FedEx" and adopt the tagline "The World On Time" to sum up its key message -- global scope, accessibility, speed, reliability -- in four succinct words. Federal Express was retained as the official corporate name. With a green light from Federal Express senior management to develop a design, Landor "came up with 400 preliminary sketches," recalls Christensen. "Together we worked it down to five alternative identity systems, which we presented to five of our senior executives, including our chief executive officer and chief operating officer."

"We were fortunate that our client had a good understanding of the objective enterprise that design really is," says Leader. "People tend to look at a new identity and dismiss it as a logo change. FedEx understood that it's really a byproduct of the overall repositioning of the company. Our logo design was the visual fait accompli of a year's worth of thorough research and analysis."

"We have a CEO [Fred Smith] who understands the power of design," says Christensen. "Because of his leadership, corporate image is not viewed as something frivolous."

Federal Express management also understood the delays caused by committee approvals and removed the usual bureaucratic barriers by designating one company decision-maker -- Christensen -- once it approved the design. Leader praises the choice of Christensen. "Gayle had a genuine appreciation of the process," he says. "She very skillfully rode the fence between interpreting [to her company] what we were trying to accomplish, and communicating to us the ultimate strategic objectives of FedEx management." This true collaboration between designer and client led to a design that incorporates several ingenious graphic elements. By shortening the name, replacing the 1970s typeface, removing the restrictive purple field around the logotype, and adding the tagline, the company's strongest attributes are captured visually.

Company vehicles have become moving billboards. "Whereas `Federal Express' only permitted 58-inch letters on the side of a trailer, the letters spelling FedEx can stand six feet tall," says Bruce McGovert, Landor's implementation director. "Airplanes can be read across an entire airfield." Costs was also a major concern. FedEx insisted that the changeover be economically smart as well as strategic. "The research, development and launch of our new corporate identity costs less than the production and placement of one average TV commercial," Christensen reveals. For example, reducing the use of the purple field on large FedEx trucks cut thousands of dollars. "Eliminating the purple field can save as much as $1,000 in labor and materials on one 53-foot tractor trailer alone," McGovert says. "And the company owns 10,000 of that type vehicle." Aircraft paint jobs also will cost much less without purple covering nearly half of the jet, and even better, its absence will reduce surface temperatures of the aircraft by 40 degrees, thus lowering energy needed to cool the planes and allowing FedEx to cut back on fuel costs per flight.

With 30,000 FedEx drop boxes across the country, any savings can be significant. To avoid the expense of repainting boxes in every location, Landor designed a decal system with increased legibility to retrofit over the old logo portion of existing decals. New boxes will look completely different, taking advantage of the larger horizontal logo. "Ultimately we aren't just looking for expedient solutions to a client's image problem," explains Leader. "We're looking at how our design affects its bottom line."

Watching out for the bottom line was what turned the launch schedule topsy-turvy, however. Original plans called for a phased-in changeover of all identity components. But after approving the overall identity system in February 1994, FedEx management asked that Landor design the applications of all compo- nents and have them ready to launch in just four months.

"What was driving FedEx management to get the identity up and running that fast was the need to capture opportunities and save costs," explains Leader. A large number of new trucks and aircraft were about to be delivered and planes newly purchased from Lufthansa had to be re-identified. "Having those aircraft circling the world with the old logo for the five years it would take before their scheduled repainting made no sense." The intensity of the marketplace was another motivating factor. New marketing initiatives and technologies like FedEx Ship (a proprietary software used by customers to track or ship their own packages) were close to introduction, and management wanted them all to carry the new look.

With a June 24 deadline looming, the design team worked 70-hour weeks. The launch of the new FedEx name was a closely guarded secret, intended by management to catch the public -- and the competition -- unaware. "We wanted to make an event, to create a whole new identity as if it had happened overnight and get as much coverage as we could," says Christensen. Two days before the event, a newly converted MD-11 was secretly flown from a paint hangar in Mobile, Ala. and hidden behind the immense doors of FedEx Hangar Ten in Memphis.