Wells Fargo Industrial and Construction Conference
Anthony Gallo
Analyst, Wells Fargo
Good morning. I think we can get started. Welcome. I'm Anthony Gallo on behalf of Wells Fargo.
We are very pleased to have Federal Express with us this morning. We have Dave Rebholz, President and CEO of FedEx Ground. Ground is the second largest division within FedEx, and I believe the most profitable. We're going to learn more about that today. We also have with us Mickey Foster and Jeff Smith.
Dave has been in his current position since 2007. And for all of you recent college graduates, you should know that he started at FedEx in 1976 as a part-time employee, so be willing to take those early jobs, right?
I think Dave has some introductory comments for us, and then I'll kick off the Q&A. When you do ask a question, please raise your hand. We are being webcast, so I want to make sure you get a microphone. Dave?
David F. Rebholz
President & CEO FedEx Ground
Well, let me just start by saying that I have a number of executives here with me. This is a developmental exercise. They're not pleased, but I am.
The net of it is we are very, very proud of our results and our performance. I think that we have defined a product that is competitively superior. We have a variable cost model that allows us to optimize. And in general terms, the future is extremely bright. We are very, very happy and we're very, very excited.
So, short of that, we love the brand, but we manage our business and we're successful.
QUESTION AND ANSWER
Anthony Gallo
Analyst, Wells Fargo
Thank you. So, you've had both margin and growth, which is a nice combination. Can you talk a little bit about, on the margin front, what do you think the two or three main drivers have been, maybe apart from yield, and then give us your perspective on maybe where we are in the yield cycle?
David F. Rebholz
President & CEO FedEx Ground
Well, I can't ignore yield. One of my jobs at FedEx was running the worldwide sales organizations, and yield management is everything. You have to have a superior product, and we do to our competition.
Having said that, you can't ignore it. The whole issue is what do you want to invest your money in? What's the rate of return? What's the ROIC? We don't want to grow for the expense of growing and being the largest market share provider. We really want to be able to get an adequate rate of return for the money that we invest.
Growth is a key driver for us. We continue to grow. We were talking at breakfast this morning, we have 54 -- 49 quarters of market share growth over our competition, and the runway is very long. We've got about 25% of the marketplace, so we have adequate room to continue to maneuver.
Throughout that whole process, as we've improved our service we have not had to trade down on price, okay? That's a very important point. I tell our people all the time that $10 million at 10% earnings is roughly $100 million worth of revenue.
And in this economy, you have two choices. Either the economy is growing or you're taking share. So, we take share because the economy, unfortunately for all of us in this room, is not growing. That's number one.
Number two, we have a variable cost model. It's hugely competitively advantageous. We -- to use an example, our primary competitor uses rail at a much more extensive rate than we do. I think we use roughly 5% to 6% of rail [correction: 2% of rail], relatively speaking. And those are for long haul East to West Coast lanes.
The reason why we don't have to do it is because, with our model, we are not inhibited with running teams. What is a team? A team is two players on a vehicle that can move 8,000 to 15,000 pounds depending on is it doubles, is it triples, right? It gives us great flexibility in ensuring that we have a service superiority. It's a big deal. We like that flexibility. Our competitors don't have it.
Rail is a fine option under the right circumstances. But, our model, if you will, our contractor model, whether it's line haul or whether it's PU&D, affords us a level of flexibility and, quite frankly, a competitive drive by the people who are operating the equipment. And so, as an advantage, we think, end of day service from our contractors and their employees puts us in a competitively superior position.
So, customers are coming to us. As a result of customers coming to us because of our competitively superior service, we can manage yields more effectively. We don't have to let everyone in the door. We're selective.
Anthony Gallo
Analyst, Wells Fargo
Very helpful. Okay. So, let's stay with that theme a little bit. You mentioned your service advantage, speed. But, in your competitors' results, we've recently seen some behavior where they're trading -- where the customer may be trading down to the deferred product. Some of that might be cyclical. Some of that might be secular. So, can you give us your thoughts around that? Is there a trend towards trading down, or is that more of a cyclical basis?
David F. Rebholz
President & CEO FedEx Ground
I think fundamentally there is an economic situation that is forcing customers to make very tough decisions. Secondarily, I think our service superiority is allowing them to trade down but not give up a competitive position as it relates to their customers.
All of us shop online, right? I mean, we all do. And I haven't been into a store in I don't know how long, I mean, years. And if I never go into another one, I'm fine. That's just my own personal view. I can get anything online.
Our advantage is the retail segment. We have a huge position in the retail segment. Whether it is Wal-Mart, who has both bricks and online, and their online is growing faster. And as I tease them, your online is growing faster, but off of a base -- I'm into numbers, so off of a base of what is what? I don't care if you've got 10,000 packages and it's growing at 50%, it's nothing. I mean, you've got to be bigger, you've got to be greater, or Amazon.
Our position is unique in that we have three incredibly important product portfolios. We have a commercial business that handles the Wal-Mart distribution to store, okay? Very efficient, very effective. Wal-Mart is now online, never had been before. We have an enormous growth from them in those -- in that perspective.
If Wal-Mart doesn't want to use our commercial business and they want to use our retail sector that's called Home, we deliver Tuesday through Saturday. Well, you and I are home on Saturday, so it's a preference choice. We have many features that are very defined around you and I as consumers, okay?
And then, we have SmartPost. And SmartPost is uniquely different in that we have a relationship with the United States Postal Service. We are their largest customer, and that business is growing wildly.
The point is a company like a Wal-Mart can choose and pick based on your preferences what they want and how they want to do it. And we're absolutely appropriately suited to answer any of those needs that they have. So, we feel very good about that.
Having said that, the variable cost model that I mentioned earlier in all cases comes to bear. So, the reason why we have record margins is because we have the lowest possible cost. That is a religion for us. We have the appropriate venue, if you will, for a client without trading down price. And as I said earlier, trading price is where you lose the war. And I've been there. I've done that.
Anthony Gallo
Analyst, Wells Fargo
Sticking with the e-commerce theme, so our panelist, Matt Nemer, has done a lot of work on this subject. And he sees a lot of the traditional retailers finally coming around to this notion that they need to stop being the showroom for Amazon. That's his phrase, not mine.
You mentioned Wal-Mart has found a way to do this. You can buy online, pick up at the store. You can buy online and have it delivered at home, or you can buy at the store. If you look at your retail customer base, what percentage, roughly, do you think has that level of sophistication, that multichannel model versus those that don't? And then, how do you go into those that don't and help them through this competitive challenge?
David F. Rebholz
President & CEO FedEx Ground
I think that's a really good question. There are a wide range of options available to our clients. Automation has diminished the level of sophistication required for shipping. It's just reality. They're out there.
We have a lot of customers, a very broad spectrum, who use optimization models. They pick and choose when and where and how they're going to go. The real key is what is you, the consumer, decided. Now, in the retail sector, one of the things that -- I hope I don't get in trouble by saying this. So, Mickey, correct me.
A lot of shippers make money off of transportation. What you pay is not what they are charged, okay? And so, if you're watching -- let's pick innocuous Fox News at six o'clock in the morning, which I turn on for the headlines for 15 minutes and I turn off, okay? I just get all the headlines, then I'm done, right?
And if you buy now for $19.99 you get two, just pay the extra shipping and handling. You're getting hosed, okay? You're getting hosed because the product has no value. The real issue is the economics of the processing, shipping, and handling.
And so, there are a number of clients that we recognize and we advise that they need to be cautious and confident about the quality of their product versus the transportation of their product. There is an outfit in California who does -- I'm trying to be careful here, who does educational videos for computers. I've been there, okay? They got 28 employees. You pay $30.00 for the DVD. It costs them $0.17 to make a copy, okay? All their money is in shipping and transportation.
Now, as an economy, we can't afford to do this forever. I mean, there isn't enough substance at the base, if you will, to allow this to happen forever. And consumers will get brighter as they become more knowledgeable and effectively more aware of information, which is what this whole online world is all about.
We, on the other hand, are very straightforward, forthright in offering options to a client who can use any advantage that we have in the marketplace with our competitively superior services. And I mean that seriously. I mean, we measure it. We know we're better. We're proud of it. We've had our competition admit they're not going to be as good as us. And we can do it at price points where we're trading off value.
So, if you, as a consumer or a shipper, want something of less value for transportation, we've got an option for you. If you want customization, we have an option for you. You're going to pay for what you get, and the beauty of it is that it doesn't have to leave our network. We don't have to force people to trade up or trade down. Our future is bright.
Anthony Gallo
Analyst, Wells Fargo
Let's talk a little bit about the economics of the residential delivery market.
David F. Rebholz
President & CEO FedEx Ground
Yes.
Anthony Gallo
Analyst, Wells Fargo
So, there's a couple of schools of thought. One is that you're never going to have the density that you have in the commercial market. Density matters to transportation.
David F. Rebholz
President & CEO FedEx Ground
Right.
Anthony Gallo
Analyst, Wells Fargo
But, at the same time, you've got the independent contractor model. You've got SmartPost, so maybe that helps. But, as e-commerce grows, some think that density increases. So, walk us through all those moving parts to the economics of the home delivery, or should we not think about it as a density issue?
David F. Rebholz
President & CEO FedEx Ground
No, no. It's fair to think about the density issue, because the residential marketplace for all competitors is about 1.1 pieces per stop. You have two primary drivers in the residential marketplace. One is pieces per stop and one is miles or time between stops. I mean, those are the key drivers.
Having said that, I don't know that any of us get -- other than Christmastime where the volume just surges, we don't get more than a piece at our house. I think we're appropriately positioned with our surcharges and our time definite or day definite product line in Home, which continues to grow almost at double-digit -- at times does grow at double-digit levels. SmartPost is clearly growing at greater rates than that.
So, really what it comes down to is not that there are economics in the cost structure, there are economics in the pricing structure. Said another way, if you want to give me a package to Home and if you want special services, we've got that answer for you. If you want a package to go to Home and day definite is not critical for you, then we have an answer for you called SmartPost with our partnership with the USPS.
But, as a practical matter, this business trend is not going to change. I'm no different than you. I don't go to malls. I just don't do it. And as a result of that, my presumption is the key driver will be the time and distance between stops with more stops than more packages per stop, even though that's a huge leverage.
Anthony Gallo
Analyst, Wells Fargo
Okay. One aspect of it that we didn't talk about was this idea of a missed delivery or where you have to go back to the house once, twice.
David F. Rebholz
President & CEO FedEx Ground
Yes.
Anthony Gallo
Analyst, Wells Fargo
A little bit of color on maybe how you're trying to avoid that, and then tie that to this UPS idea of My Choice and how something like that might evolve for you in terms of not missing those deliveries.
David F. Rebholz
President & CEO FedEx Ground
Well, I think the industry is cognizant of the fact that the shipping population needs to be more responsive to we the consumer. And we the consumer need to have choice. Example, I ordered some shoes from Zappo, right? Anyone ever get shoes from Zappo? They're cheap, they're good, and they have the big ones that I need.
Anthony Gallo
Analyst, Wells Fargo
So, was that a UPS box that showed up on your door?
David F. Rebholz
President & CEO FedEx Ground
Yes, and it pissed me off. (Laughter.) And so, I told them, I said -- no, no, no. I would rather ship FedEx. And I get a discount as an employee of FedEx, and I said use my account number. And then, Gretchen -- I called Financial Controls and I said make sure that they don't use my account number for anything else.
But, my point is I don't have the choice. And this goes back to the point I was raising earlier. Shippers need to stop making money off of shipping. They need to make money in their core business. What we do is -- with our variable model is we ensure that people are paid, compensated, whether they're a contractor or an hourly employee, off the basis of the value that they produce. And a number of these organizations don't do that.
Now, why do I go to that length of explaining it? Because, in reality, I think we have all the answers. I can tell you that we have a pipeline that's dramatically full, and it's from people who have variable different distribution models and variable destination situations, consumers. And they think that we're a better mousetrap.
So, I think in the final analysis what we need to do is, as companies, figure out what our value is and not take it on the margin, because, quite frankly, that's a losing -- that runs out -- it runs out of gas.
Anthony Gallo
Analyst, Wells Fargo
I'm going to stick with a couple more e-commerce questions. The audience should feel free to raise their hand here.
David F. Rebholz
President & CEO FedEx Ground
Absolutely.
Anthony Gallo
Analyst, Wells Fargo
You mentioned Amazon, so I'm willing to talk about them as well. The Amazon Prime product seems to have got a lot of traction. Are there other customers looking for these loyalty programs? And then, how do you participate in the customer trying to drive loyalty that way?
David F. Rebholz
President & CEO FedEx Ground
Yes, there are a number of customers that are looking at these programs. We were talking this morning at breakfast about Amazon in particular. They're an interesting enigma, because at some point in time there are only so many warehouses and so much bypassing of transportation costs that you can do.
Having said that, Amazon's great strength is in their information. And their greatest growth is from small customers like you and I who might have an idea but we don't have the wherewithal to put up either distribution or information systems, the latter being more important, the information systems, so you get an access to a marketplace.
All of the retail sector is looking at how they can expand loyalty. What they haven't transitioned to is understanding that the consignee has some value, we, the receiver, and has some choice. Now, I think we're perfectly situated. I mean, we leave a package. You can get a signature required. We can do it through the Post Office. We can do it to the store. We do it, in a certain regard, to a time definite basis for some of our clients.
All up, I think they're all really struggling and not cooperating with changing the dynamics of the marketplace. And the changing dynamics of the marketplace is being foisted upon us through information technology. You and I know as much as anyone else in the world today. It is unbelievable.
If you're willing to give it to me at a certain time, if you're willing to give it to me at a lesser price, if you're willing to give it to me under a set of features that I think are important, I'll take you. But, that information is available to both of us. It's amazing, isn't it, how radical the world has changed, certainly in my lifetime.
Anthony Gallo
Analyst, Wells Fargo
Last e-commerce question maybe. Traditional retailers, are they using the expedited offering as a way to counter -- or I should say add convenience?
David F. Rebholz
President & CEO FedEx Ground
Well, all right. I'm going to belabor the point, but it's true. The general retail population has peaks and surges, okay? Monday is our busiest day by a wide margin. And the reason why it's busiest is they want to take advantage of the lowest cost and the time-destination relationship that exists with our network.
It is absolutely common -- all of my clients at FedEx Ground use FedEx Express or UPS or USPS. They optimize -- to your earlier question, they optimize to ensure that the quality of the experience is appropriate for the client base for the circumstances they're in.
So, one of the things that we decided, I don't know, six years ago was to have the broadest portfolio of the greatest level of options so that the client base could take advantage of us versus a competitor and keep it in one house. You know why? Gross revenue equals discount. It's that simple, right? You give me a million packages, you give me 250,000 packages a day, and we do have clients that give us 250,000 packages a day, you're going to earn a discount because we get some synergies and some benefit.
But, if we didn't have a competitively superior offering and we didn't have the portfolio that allowed them to switch, right, I don't know that we would be in the same position we are today.
Anthony Gallo
Analyst, Wells Fargo
Question up front here?
David F. Rebholz
President & CEO FedEx Ground
Yes.
Unidentified Audience Member
(Inaudible -- microphone inaccessible.)
David F. Rebholz
President & CEO FedEx Ground
Yes. Well, we have a variable cost model with our contractors and their employees. And while we increase incentives for those people, our vendors and their employees, as a practical matter we get an enormous amount of benefit from growth. I mean, growth is key to us. We want to grow at roughly 5% to 10%. We think we can do that.
Number two, we keep costs in check. The larger we grow, the more efficient our contractors become, which lowers their unit cost which lowers my need to increase their compensatory values.
Number three, capital. Capital is a huge issue for us. It might be a 17% margin, but we should not be investing at a rate beyond $600 million. I mean, that's our relative rate of the high end of investment for expansion.
We use automation exclusively to lower our efficiency -- or increase our efficiency, lower our labor cost. And we are very effective at that. We can process a package through a venturi or a window, if you will, in a shorter period of time with greater accuracy than anyone else.
Number four, fuel -- or five, fuel. Fuel is a drag on the economy. It's a drag on us. We certainly have the fuel surcharge. We're cognizant of that. We keep looking at new technology to reduce our consumption of fuel, whether it's in a facility or in a vehicle for our contractors. I mean, we try to advise them of new technologies that exist, and we invest in new technologies that exist or are under development to help them lower their unit costs, because, again, it takes pressure off of us.
Those are the big ones. And my assumption is and remains to be where we are right now, short of a few one-off experiences which will occur to any company, we're in a really good spot. 17%, 18% is within range.
I've said it on the call with my boss, who drives me crazy telling me to get 20%, and I haven't figured it out yet, okay? I get 20%, you guys are going to jack my share price and I'm going to be a happy guy. Go ahead. So, I'm in. I'm in.
Yes, ma'am?
Unidentified Audience Member
Sorry. Just touching on the fuel costs, what technologies are you most optimistic about as far as improving your fuel efficiency of the fleet?
David F. Rebholz
President & CEO FedEx Ground
Well, we have a large-scale effort in our Company, and I'm going to belabor it a little bit because I want you to understand. We don't control or own the contractors or their employees, so we can't tell them what equipment to buy. So, what do we do?
Well, one, pallets, garbage, roofing that has solar panels to reduce our utility rate, investment and time with Eaton and -- Eaton Corporation and other corporations who are trying to find solutions to a gas engine, hydraulics, electricity. I mean, all of those things are in play.
You do need to understand that, as an industry, part of the problem that I have with our contractors, they leave the building with 200 or 300 packages on a truck. You can't put enough batteries in today's technology in that truck to make it work efficiently. You can in New York, okay? You can in Chicago. You can in San Francisco, but you can't go out on the road.
So, we're looking at other things like hydraulics to see how we could blend the appropriate energy usage and redevelopment of energy vis-a-vis the hydraulics, almost like renewable on the road, such that we could carry the load factor that we have and then bring it home.
We also work with Cummins Diesel. Cummins is a great company and they're very much into new hybrid technologies that would handle the loads that we carry today. We carry single 53 footers. We carry doubles and triples.
We are working legislatively to push for 33 footers, because we think, from an energy consumption standpoint, it's a cheaper date. Government has different views, but they're safer.
There are a lot of different areas. We're all over the board trying to find ways. We are a consumer of energy. It is to our advantage to invest and find solutions that lower our energy cost.
Unidentified Audience Member
(Inaudible -- microphone inaccessible.)
David F. Rebholz
President & CEO FedEx Ground
Not yet. Yes, not yet. We are -- that is exactly what we would do. We would change the compensation, understanding the capital investment.
But, as a practical matter, none of the technologies that are being talked about are readily available and are easily utilized in the marketplace. That's the big struggle for this country. The infrastructure does not exist, you know, and we need to get there.
So, natural gas, perfect example of technology that we're investing in because we believe that there is probably a play there and there's certainly a robust amount of natural gas, to your point. But, we will not dictate a direction until we are confident that our contractors can effectively optimize what's available.
And we talk to our contractors, and they're cognizant of the changes. What we don't want to do is put ourselves in a position to advocate a particular process or policy that cannot be satisfied.
Anthony Gallo
Analyst, Wells Fargo
Let me ask one while we're moving the mic around.
David F. Rebholz
President & CEO FedEx Ground
Yes.
Anthony Gallo
Analyst, Wells Fargo
Let me ask one quick -- well, it's not a quick question. Sorry. US Postal Service, a customer and a competitor, they're going through some challenges right now. Can you give us a couple of scenarios that might work out in your favor and maybe a couple of scenarios that would be more of a challenge for you in terms of how they approach the marketplace going forward?
David F. Rebholz
President & CEO FedEx Ground
Well, first of all, let me tell you that I have the greatest respect for their executives. And it just reminds me how well the free enterprise system works as opposed to the semi-governmental oversight. They got a mess and they know it. They're very cognizant. They know what to do.
So, I think in the current environment there is not the political will, as there is with just about anything that we want to talk about, to radically alter the United States Postal Service from the way they operate today. Truthfully, and this is just my opinion, I don't really care about Saturday delivery as a consumer of the postal product.
I'm a victim of credit card fraud. I don't do banking online as a result. After they called me and told me I was $45,000 in the hole -- my first call, $45,000. I went -- are you kidding me? And it took me a year, so I don't do online banking because I'm afraid, okay? I just -- it was bad juju. It took me a year to straighten it out. And so, I guess at 59 I'm a little too old to transfer into that mindset, okay?
I don't think the Post Office is going to go away. Forget what comes to you. And most of the people I know do banking online. It's just my personal experience that precludes me from using that decision. It's certainly more convenient.
They have a few things on their list. Clearly they should reduce the number of locations. They have roughly what, 40,000, 39,000, 38,000? 39,000, yes, locations. These are all pork barrel deals that Congressmen got in their district. About 8,000 of the postal units produce about 90% of the volume, okay, that you and I go to and do business with.
So, I can't speak for New York, but when I'm in Chicago if I go to the John Hancock, in the basement -- if you've ever gone up to the top of the John Hancock, in the basement is a little kiosk window and there is a Post Office there. And it's for the people in the building, okay? Extremely inefficient overcharge. They know that. They don't need it.
Saturday is another example where they could optimize sortation. That does not affect us. That does not affect SmartPost, okay, not in any way, shape, or form. As long as we can go ahead and leave off packages at the postal unit, we're in good shape.
They want to raise their rates. I mean, there is a yield issue -- they're not getting enough money and the Postal Rate Commission precludes them from doing an open market kind of scenario. They certainly have gotten aggressive with their Priority Mail and their flat rate box. We could do that. Maybe we will. I don't know. Maybe UPS will. Maybe they won't. I don't know, or let's just say I'm not going to speculate on it.
They do a good job. There's an example of where you get a little higher rate for a little less volume, because the things that move in packaging, generally speaking, are not weight maxed out. They're cubed out, okay?
I think -- not only as their largest customer with SmartPost but as their largest vendor with priority mail, I think we have a great working relationship. It is very much arms length because it's a government agency.
And I couldn't buy Pat Donahoe a drink if my life depended on it. And Pat lives in Pittsburgh. He's the head of the Post Office, Postmaster General. He wouldn't take one at my house. That's how crazy they are. I mean, come on over, have a drink, let's talk. Nope, not going to happen.
They're very, very concerned with their cost structure. But, like most of America in the public sector, their cost structure is not being driven by the decisions they can or can't make. It's being driven by pension, healthcare benefits, and all the crap that's gotten legislated -- excuse my language, but legislated that is not justifiable. It's crazy.
Yes?
Anthony Gallo
Analyst, Wells Fargo
Got time for a couple questions in the audience still.
Unidentified Audience Member
My wife orders something every day. Every day the FedEx guy comes.
David F. Rebholz
President & CEO FedEx Ground
I love you, man. (Laughter.)
Unidentified Audience Member
But, why don't you figure out how to incent her to take seven packages once a week instead of one a day?
David F. Rebholz
President & CEO FedEx Ground
I think that's a personal problem. (Laughter.)
Unidentified Audience Member
No, I'm serious though.
David F. Rebholz
President & CEO FedEx Ground
I know. I know what you mean, yes.
Unidentified Audience Member
I mean, why aren't you actually looking at telling her she's got that one coming from (multiple speakers)?
David F. Rebholz
President & CEO FedEx Ground
Yes, right.
Unidentified Audience Member
Because I don't think anything is priced that way.
David F. Rebholz
President & CEO FedEx Ground
Honey -- oh, it's not. Honey, if you would just order on one day and have them received on one day, we'd both be happier and I could get a discount.
Unidentified Audience Member
Yes. But, if you -- I mean, it seems to me you could just look at all her ordering stuff and just keep it for a week and then bring it once a week.
David F. Rebholz
President & CEO FedEx Ground
Yes. Well, the problem is that we are random. I wish we were not. If we weren't and if they wanted to hold it -- although you'd be charged for holding it, because where the hell do you put it, right? I mean, you've got to hold it, right? But, in reality, you could trade off transportation costs for holding costs. It's called demurrage, I mean, the old air freight world.
But, as a practical matter, I got to tell you the random nature of purchasing is bizarre. The real key is why doesn't the seller of the goods put some logic around it? We're an intermediary. We simply take what they give us.
What we're trying to press them towards is use logic in how and what you do, and allow the consumer to have choice. You might only want it on Saturday. We could deliver to you seven packages a day on Saturday. We don't have any choice. We're not involved in the transaction.
Zappos doesn't ask me other than what color shoe I want or what size. They should ask me -- by the way, Dave, how would you like this? I'd like it FedEx. I would like it express. I want it tomorrow. I want it two days from now via ground. I want it via SmartPost.
They don't ask us these questions. They could be more efficient if they got logical about the choices that were available to you and I. And God, I would love to deliver you seven packages on one day. Seriously, I really would. I mean, it's a beautiful thing.
Anthony Gallo
Analyst, Wells Fargo
I think we're going to finish there. Thank you very much.
David F. Rebholz
President & CEO FedEx Ground
All right.
Anthony Gallo
Analyst, Wells Fargo
Dave, thank you. Well done.
David F. Rebholz
President & CEO FedEx Ground
Thank you.