Unlocking the Cross-Border eCommerce Opportunity - with Alon Friedman, FedEx Express

This talk explores the impact of artificial intelligence (AI) on various aspects of life and business, highlighting its growing presence in everyday interactions. The speaker discusses the advancements in AI technologies, such as chatbots that can recall user interactions to provide personalized recommendations and guidance. He contrasts differing perspectives on AI's future role in the workforce, suggesting that while some believe AI will replace jobs, others argue it will lead to more employment opportunities through enhanced business efficiency. The speaker emphasizes the challenges of cross-border e-commerce, particularly in logistics and customer service, and stresses the importance of adapting supply chain processes to meet consumer expectations for speed and reliability. He also mentions the shift in consumer behavior towards online shopping and the importance of maintaining excellent service to build trust.

Good morning. I'm here to talk about crossborder, but I walked around all the booth and the other presentations and everybody's talking about AI. So, let's start with that as well. Let me ask you a question. How many of you are using AI? How many of you think you're using AI? We are all using AI whether we understand it or not every day. But here comes the more

interesting questions. How many of us of you programmed your Gemini chat GPT 4 5 whatever version you're using to tell them every morning how is their day going to be? Tough question. You know many people are doing that because AI remembers your mood, remembers your past questions, remembers your problems, the question you've asked yesterday. He puts everything together one by one. He listens to your voice, your

emotions. He knows everything and he remembers everything. So you can ask him in the morning, how will my day be? and he will tell you based on yesterday or based on your last questions, you're going to have a very good day or you should do something for yourself because lately your mood wasn't so good. This is frightening. You know how many people around the world are doing

it every day? 800 million per week. This is frightening. They're not talking to their wife anymore, their girlfriend anymore. They're talking to the AI telling them how do they feel in the morning. We don't want to be like that but we are going in this direction. You know Sam Alman who created chat GPT open AI recently said that in the foresee future AI robots or AI agents

may replace every employee. it can do any kind of job. This is crazy. On the other hand, Nvidia CEO Mr. uh Jen Sen Huang, one of the leading AI component uh companies in the world now said the contrary that companies will be so successful by using AI that they will hire more employees because according to him he never saw a company making a lot of money laying

off people. So we have these two different views about how it is going to influence our world. Either way we should be on our toes and alert. Let me give you a scenario. Very soon in some company the purchasing manager who is buying from a vendor whatever he's buying will be an AI agent and he will connect with an AI agent at the vendor. So they will

talk in gibberish binary language you know the squeaky sounds in seconds they will ask the questions and get the answers of what they need there is no personality we don't set the meeting we don't drink coffee I don't know him for many years the purchasing manager this is done this is gone and the purchasing robot will ask what is your NSL net service levels? How accurate are

your invoices? How good is your product? And what is the reliability of your product? And he will compare it with the history because he knows everything. And he will compare it with other products because he knows everything. And within seconds, he will make a decision who this company is going to purchase from. Imagine that. So, it's not going to be exactly like that because there is always

going to be what the Americans are calling men in the loop. Remember that men in the loop or women, okay? A personality because otherwise robots can make crazy things. So, at the final decision will be made by a person who can look at us, it doesn't make sense or make a lot of sense. So they will still need us in the near future. One thing is for

sure and especially since COVID all of us have seen how disruptive this world is. We are a world on steroids since co everything is changing all the time. Look at what's going on right now between US, Europe, NATO, China, taxes. We don't know where this is taking us. So remember that because AI is going to put that on steroids. Disruption is the new norm. Who needs that?

Who wants his world to change so often? We want stability. Give me some peace of mind. Unfortunately, we have to adopt as professionals and as individuals. Disruption is the new norm mainly due to AI but not only so in the meantime let's see some old-fashioned way of doing business bridging time and distance literally and this is where we bridge into uh FedEx unlocking unlocking the crossber e-commerce

opportunity Look at this amazing prediction done lastly in 2021. Very little AI was involved but this is the way we predict things. And the growth of G global crossber was in 21 $800 billion. Enormous amount. Okay, we all know it. We are all in these industries growing dramatically. But look what happens by 2030. 8 trillion. 8 Who can serve this kind of commodity and transactions? We need

to scale up. We're not there yet. But this is you want potential. This is crazy potential. You're talking blue ocean. This is the biggest blue ocean we have ever seen. When we compare global e-commerce and crossborder, it will even double the pace of growth will be doubled in that in the next 10 years. Who shops cross border? So 26 of consumers in the EU buy cross border.

Not necessarily that they understand that they buy cross border but this is the trend. 33% of their are younger. Nobody is surprised by that. Young people buy more. Even split between men and women. I'm surprised by that. Okay. Because I buy very little. So somebody must be buying more than me. But there is an even split on people who buy. And also not surprising university graduates. People

who have higher education buy more online. If you have ever been in Japan, you see people waiting in the train station, okay? And there is a big board with barcodes with QRS and they're doing the shopping and the cart will be waiting for them at home once they get there. This is how crazy it is. This I need one tomato, one bread, one cheese. do it in

the QR on the train and within 30 minutes it's already waiting for him at the door. Okay. So young generation are using more than that. My grandfather doesn't go to the ATM bec only to the person to take out money in person. I said why is that? He said I don't trust the person behind the ATM. So definitely the word belongs to the younger generation. The statistics

is just showing us how difficult our job is especially at the logistic arena. 55% of businesses find cross border online logistics difficult and it's true. We are sitting with them. We're trying to overcome these challenges. Plenty of challenges. Uh customs uh traffic whatever you want to call it. 25% of online consumers prioritize delivery speed and especially for us at FedEx. Uh we are a fast company, we

change the If we don't deliver on time, we don't do our job. So when you buy something online, you become sentimental about it and you want it tomorrow because you've been promised it will be there tomorrow. And if you buy a dress for the wedding that will happen tomorrow, you have to have this dress. This is another great opportunity. And this one can kill businesses. Up to

30% of shipments are being returned on average. This is mindblowing. And the companies who are this stuff is being returned to, they lose money on because they pay for the product, they need to replace the product, they do the shipping multiple times. This is a lost leading factor. This needs to be reduced. Everybody wants this to be at zero. But you need to have a clear return

policy otherwise close to 30% will not buy from you if you will not have a good return policy on the other hand. So this is a must. Not only that I want the product and the price is right and I will get it tomorrow, but I want to know if I want to return it if it's easy to return it to you. This is the opposite. So

almost 70% are very happy with crossborder deliveries. This is not enough. This is not enough. 30% of European businesses say that e-commerce goods are frequently delayed due to incorrect classifications. And everybody had this before, right? It's delayed. It's stuck in customs or whatever reasons. But let's talk customs because right now it's a big issue around the world. I heard a very smart person telling me every shipment

stuck in customs, the problem starts at origin. The problem is not at customs in the US or in Germany or in whatever it is. The c the everything starts at the origin. If the paperwork is correct, if the ages code is there, if the description is clear, if all the information is there, it will be cleared 99% of the cases. Okay? So the responsibility is on the

shipper. Everybody's blaming the company who is doing the releasing from the customs. Okay. Why you're not releasing? Why you're not handling this? We need to take care of it at the beginning not at the end. Again description we have discussed that. So main three challenges when we talk on the supply chain. First we have the selling process, the logistic process, the shipping, the warehousing, the collecting everything

around it and the return policies. If you have all of them in sync, then you're on the right way to success. But all of them create lots of challenges as you all know. So what do we do in FedEx? First of all, I don't know how many of you know, but uh FedEx is the largest cargo airline in the world. How many of you know how many

airplanes FedEx has? Drop a number. How many planes do we have? Throw a number. Airplanes. How many? 50,000. 50,000. Okay. It's a little bit too high. It's how many airplanes does Air Bulgaria have something like that. How many planes FedEx has? Okay, let me give you the number. It's 700 planes. It's one of the top five airlines in the world. It doesn't take passengers, it take packages,

but 700 planes brings it to be We serve 99% of the global GDP, more than 200 countries, and we ser and we uh have more than 500,000 employees. In Europe, we have, by the way, 27 European road hubs, okay? And 61 air gateways to serve the cross border within Europe. This is a snapshot of the flight map we do every day from Europe to the Americas and

from Europe back door and front door into Apac. Hundreds of flights with 700 planes. This is how our uh road hubs look in uh And let's jump into the real business. Historically, logistical companies had either express or economy. You could either have it very fast or very slow. Nothing in between. Okay? So, let's say everybody knows next day or within a few days, three, four, five depending

on your destination. With e-commerce, FedEx have new products. So let's let's just take Europe. Let's say for example we have next day Europe that's obvious and in economy we had 3 to 8 3 to 8 days. E-commer it's not good enough. This is too expensive sometimes and this is too slow sometimes. You need something in between for us as consumers. I want it's okay for me three

days but I want to know that it will be there within 3 days. 8 days not good enough. one day I'm not willing to pay. Okay. The shipping is more expensive than the package itself sometimes. So we have created specific solutions. Oh, sorry. We have created specific solutions for that purpose. Now let's see my skills to fix it very fast. rule. Okay, move on. Over here you

can see a coverage. The dark purple is the coverage we have for the specific e-commerce solution FedEx International Connect or Connect Plus all of Europe. Move on to the next one. You will see it worldwide how we cover with specific e-commerce solutions the Next For me as a shop, as a as a company that is doing e-commerce, what do I have to have? I want to have

the estimated delivery day, the create I want to create shipping documents, um notification on delays, successful delivery. I have to have it within my systems. What does my um customer needs? He needs maybe a future date of delivery. Maybe leave it at my neighbor's step. I want to change my address or add a driver instructions. And on top of that, we also have proof uh picture proof.

So he says, "Just leave it at my door. Take a picture of that so I know you left it at the right door. Send me the picture and I prove it as if somebody signed for it. It's working. Thank you. So, we want to control our returns. We need expert guidance from our supplier provider FedEx. Customize return labels, manage return shipments. This is, as we said before,

30% of the customers uses that. If it's easy to use, they will be probably buying from you again. Now that's very interesting. Uh people do look into the environment and 52% are saying we will buy from you if you have a positive impact on the environment. We care about the environment. So if you are selling something and you will emphasize that this is recyclable or you're using

a vendor that is using uh uh not using too much fuel or whatever using more electrical vehicle to deliver you you're more likely to sell and close to 80% of online shoppers consider options to make deliveries into orders more sustainable. This is the new generation. This is the zed generation. So last word first I have a quiz but before the quiz let me remind myself and you

and the sentence is true for business and for life. We are as good as our last shipment. We can do business for a long time, but if I failed on my last shipment, if you bought something from an online uh store and the last shipment came out late or wrong or what damage or whatever, this is your impression of their products of this company. I do the

same with my children. I do the same with my wife. My last interaction with her is her last impression of me. Okay? So, don't forget that. And the quiz is, can somebody locate the arrow within the FedEx logo? Just raise your hand. You see the arrow? Okay. You see too? Okay. Now, this was created in the 70s without AI. This is just human geniosity. Today, AI would

have done it much faster, right? So you can see we are a fast company. We are a moving company. Look at the arrow over Okay. Now you you saw it. Your ma your brain saw it. You just didn't realize And it works on our brains. They didn't intended that because the company was called Federal Express. They just made it shorter. and shortening the word brought this geniosity

and when we look at FedEx now everybody says okay it's a moving company it's a fastmoving company it's a reliable always moving forward thank you very much for your