February 16, 2017
Column | outbound

Fred against the machine

FedEx founder Fred Smith will not shy away from fighting for the cause of free trade. That could lead to an intriguing set-to with Donald Trump.

By Mitch Mac Donald

Five months shy of his 73rd birthday, and with his place in business and cultural history secure, FedEx Corp. founder Fred Smith has embarked on what could be his most profound mission: To preserve decades worth of U.S. trade gains from Donald Trump's policy ax.

The battle was joined just one day after Trump killed the 12-nation trade compact known as the "Trans-Pacific Partnership." Critics of Trump's decision said it effectively robs U.S. exporters of the opportunity to compete for the wallets of 480 million customers and cedes Asia-Pacific leadership to China, a country with more than 15 years of bad acting under its belt since joining the World Trade Organization. Smith, who is one of those critics, hit national TV to warn that the administration's positions "are a little bit out of date with the reality of China today." He acknowledged the country's pattern of relentless mercantilism but argued that it is slowly yet systematically opening its markets. Retreating rather than embracing global engagement, he said, essentially cuts off our nose to spite our face.

The beat went on a week later when Smith told Congress that when companies like FedEx "help businesses access new markets, they expand and create jobs in their communities, a critical issue for those who are feeling left behind in this country." Citing forecasts that global e-commerce will become a $9.6 trillion market by 2020, he implied that U.S. firms could lose out on a portion of that without the support of forward-looking trade policies.

Equally telling over the past six weeks have been Smith's actions. In early February, he met in Washington with Vice President Mike Pence, whose pro-trade views are widely known and in whose home state of Indiana FedEx's second-largest U.S. air hub resides. The meeting was so hush-hush that those close to Smith knew only that he was out of town. That was followed by a tidbit buried at the end of a story in The Economist that Smith had quietly relinquished the president's role at the company he founded to concentrate on promoting free trade.

This opens a fascinating narrative that's as yet unspooled. The office of the president is vested with immense power. With a bully pulpit like Twitter at his fingertips, Trump has free rein to attack those who disagree with him or his positions. But the president will need more than an app if he goes after Smith over the merits of free trade. Smith is older, probably wealthier (tax returns, anyone?), and better connected politically than Trump is. His negotiating skills are well honed, and he can be just as ruthless as Trump if the situation warrants. His company is 17 times larger than Trump's, and its presence in 221 countries dwarfs Trump's empire. Tweeting "Failing FedEx" would be the fakest of news.

It should also be noted that Smith is a four-time decorated Marine, which would make any attempt to sully his name a PR disaster.

What makes Smith so formidable is that he is nobody's political lackey; legend has it he was invited to a meeting with President Obama to talk business and left complaining that Obama didn't seem to hear a word he said. Like us all, Smith has his political views. But his pragmatism trumps (pun intended) partisanship.

Trump would be wise to take Smith into his counsel. Perhaps he has. Yet Trump has a habit of roughing up his critics rather than turning to them for guidance. If he decides to follow that tack with Fred Smith, Trump is likely to find tempered steel in his path.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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