FedEx Chairman Frederick W. Smith Urges Greater U.S.-EU Cooperation, Customs Reforms and Open Skies Agreements

PARIS - January 17, 2005 -Today, Frederick W. Smith, Chairman, President and CEO of FedEx Corp. (NYSE: FDX), said the key to increased prosperity for both the United States and the European Union is increased cooperation and a concerted effort to erase existing barriers between the two economies.

Speaking to a gathering of European policy makers, business leaders and international journalists in Paris , Smith’s address focused on a number of pressing issues related to free trade and the global economy. Among the topics he covered included the role of the air cargo industry in facilitating global commerce, the importance of the EU and U.S. as trading blocs and as trading partners, and regulations that inhibit the free flow of goods around the world.

Since it pioneered the air express industry more than 30 years ago, FedEx has been an outspoken advocate of free trade and has maintained a strong record of promoting multilateral and bilateral agreements that open up markets.

Breaking Down The Barriers

According to Smith, continued liberalization of trade and the breaking down of regulatory barriers, such as aviation protectionism and archaic customs procedures, will ultimately expand choices and opportunities for the world’s citizens and businesses.

“There are several issues that France and all EU members must address to ensure that we continue to enjoy the free flow of goods and the benefits of world trade for all countries,” noted Smith. “I compliment France for its farsightedness in concluding a highly flexible air services agreement with the United States . I would ask France and its like-minded European partners to encourage the conclusion of a similarly open U.S.-EU bilateral agreement.”

France and the U.S. reached an “open skies,” or bilateral air services agreement, in 2002.

“In Europe, the adoption of an ‘Open Skies’ policy between the U.S. and individual EU member states would be key in helping both sides realize the full economic benefits of the global economy,” Smith said. “If a full agreement is not possible at this stage, we would recommend that an all-cargo deal be considered as an alternative first step.”

In respect to customs reform, Smith urged every country in the world to streamline its customs clearance processes to more readily facilitate global commerce and productivity. He added that productivity was key in an economy that is being increasingly defined by goods that arrive to final destinations “just in time.”

Smith also noted the increasing interdependency of both the cultures and the economies of the two trading giants--the U.S. and EU--and stressed the critical importance of continued cooperation.

The Role of the Air Cargo Industry

Smith elaborated on the role that FedEx and the air cargo industry play in facilitating global trade by enabling companies of every size and description to source, assemble and sell their goods anywhere in the world.

FedEx is optimistic about the future of air cargo, especially international air express. According to industry forecasts, air cargo traffic is projected to expand at an average annual rate of 6.2 percent for the next 20 years, in effect tripling current traffic levels.

In response to the estimated growth in the international air cargo sector, FedEx continues to invest in its infrastructure in order to facilitate anticipated demand. FedEx was the first North American carrier to purchase the Airbus A380-800F aircraft in order to meet the growing needs of its international customers. The company will acquire 10 A380s and expects delivery of the first aircraft in August 2008.

The investment in the A380 is part of FedEx’s international growth strategy. With a capacity to carry nearly 40,000 cubic feet and 330,000 pounds, and boasting a range of about 6,000 nautical miles, the A380 will be able to complete a single trip in what now takes two or more FedEx Express flights, creating enhanced efficiencies in the FedEx system and enabling FedEx to take advantage of global growth trends.

About FedEx

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $27 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 250,000 employees and contractors to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, please contact FedEx Media Relations, 901-434-3900.