The Wall Street Journal - 13.03.2020

B2| Friday, March 13, 2020 **** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A
Amazon.com.....B1,B2,R
Apache........................A
Apple...........................B
AQR Capital
Management...........B
AT&T............................B
B
Bank of America.......B
Bridgewater Associates
...................................B
Broadcom....................B
Bytedance....................B
C
Carnival.......................B
Chevron.....................B
Citigroup....................B
Clorox..........................R
CME Group................B
Comcast.................A6,B
D-E
Darden Restaurants.R
eBay.............................R
F-G
Facebook......................R
FedEx......................B1,B
GameStop....................B

Gojo Industries...........R

H-I

Home Depot................R

Instacart......................R

Intercontinental

Exchange.................B

I-J

Johnson & Johnson..B

J.P. Morgan Chase....B

Juul Labs.....................B

M

Marathon Oil..............A

Massar Capital

Management...........B

Matador Resources....A

Microsoft...................B

Morningstar..............B

N

National Basketball

Association...............B

Neuberger Bermann.B

Newmont...................B

Norwegian Cruise Line

Holdings....................B

O-R

Occidental Petroleum

...................................B

Royal Caribbean Cruises

.....................................B

S

Safeway......................R

Simpson Spence Young

...................................B

Sinclair Broadcast Group

.....................................B

Slack Technologies...B

Société Générale.......B

Space Exploration

Technologies.............A

Starbucks....................B

T-U

Trafigura....................B

Tupperware Brands.....B

United Parcel Service

............................... B1,B

V-W

VanEck Vectors Gold

Miners.....................B

Walgreen.....................R

Walmart......................R

Walt Disney..............B

Z

Zoom Video

Communications.....B

INDEX TO PEOPLE

BUSINESS & FINANCE

BYPAULZIOBRO

FedEx Strategist Devises Bold Path

GROUND

FedEx’spremiumExpressbusiness

andlesscostlyGroundbusiness

havehistoricallybeenoperated

asseparatenetworks.Hereis

howtheyworkandhowthe

‘LastMileOptimization’plan

willintegratethemto

increaseGround’sdelivery

densityandfreeup

Expresstofocuson

higher-yielding

premiumshipments.

Expressplanstocontract

withGroundtotransferit

certainpackagestodeliver

start-to-finishiftheywould

stillarriveintime.

Air-GroundIntegration

‘LastMileOptimization’

Duplication

Source: the company

Packagesreachtheirfinal

destinationviaadelivery

vehicle.Thenetworksoverlap

andcanwindupdeliveringin

thesameneighborhoodat

thesametime.

Ground’sdelivery

windowisgenerally

bytheendofa

designatedday,and

packagesaretaken

bytrucktotheir

destinationhubs.

FedExGround

FedExExpress

Expressgenerallycomeswitha

time-specificdeliverycommitment,and

packagesaretakenbyplanetotheir

destinationhubs.

1

2

3

4

EXPRESS

GROUND

GROUND

GROUND

UNDD

UND

EXPRESS

EXPRESS

RESES

SS

GROUND

GROUND

EXPRESS

FedExCorp. Chief Executive

Fred Smith has cut ties withAm-

azon.comInc., is phasing out the

U.S. Postal Service and is fully

embracing online shopping, part

of the most sweeping changes

ever at the shipping giant he

launched nearly 50 years ago.

The reason: his faith in Raj

Subramaniam, a marketing exec-

utive from India tapped as Mr.

Smith’s likely successor.

The latest moves were in-

spired by strategic reports that

Mr. Subramaniam, who turned

54 years old Wednesday, pro-

duced for Mr. Smith and the

company’s board. Hundreds of

pages long, the reviews outlined

a new playbook for FedEx, in-

cluding going all in on shipping

online orders, and discussed how

far the company had to go to be

a real player in the e-commerce

economy.

“We had to adapt, change and

be ready for the market that’s

evolving,” said Mr. Subrama-

niam, who was appointed chief

operating officer last year and

joined the FedEx board in Janu-

ary. “And so we made some very,

very bold steps.”

FedEx began reducing its reli-

ance on the Postal Service, which

for years had delivered millions

of the carrier’s packages to

homes each week. The company

also started making deliveries

sevendaysaweek,upfromsix,

to satiate the never-ending

schedule of online shopping. It

launched new services to quickly

ship packages from stores to

homes. It forged ties with retail-

ers to add thousands of new

stores, including in rural areas,

to a network of locations to pick

up and drop off packages.

“He did all of the research

and foundational planning for

the strategy that we are execut-

ing today,” Mr. Smith said in a

recent interview. “For all intents

and purposes, Raj is the archi-

tect of that.”

Last month Mr. Subrama-

niam, a three-decade veteran of

FedEx, unveiled the company’s

latest break from longstanding

practice with his plan to mix

some packages between the

company’s two main divisions:

Express, which ships critical par-

cels using aircraft and often

guarantees deliveries by a cer-

tain time, and Ground, a slower

service that uses a network of

trucks and targets deliveries to

arrive by a certain date. FedEx

will hand off some of its Express

packages to Ground if it can

meet promised delivery times.

Mr. Smith for years has re-

sisted investor calls to integrate

the two units to save money,

saying keeping them separate

was vital to maintaining the

promise of speedy delivery by

Express.

Analysts and investors

cheered the move, saying it

could save FedEx hundreds of

millions of dollars a year at a

time when profits have shrunk

and its share price has tumbled.

Mr. Subramaniam, who grew

up in India, left the country on a

scholarship to Syracuse Univer-

sity, where he earned a master’s

degree, and later finished an

M.B.A. at the University of Texas

during the early 1990s recession.

He went months without a job

offer. He got the phone number

of a FedEx interviewer from a

roommate who had decided to

return home instead of applying

for a job at the delivery com-

pany.

Mr. Subramaniam started

with FedEx as an associate mar-

keting analyst. Six months in,

Mr. Smith spoke at a quarterly

staff meeting about the interna-

tional opportunities at FedEx,

saying the company needed mar-

keting minds to help develop the

network and service to sell to

customers. “I said, ‘Hey, I get

this. Put me in,’ ” Mr. Subrama-

niam recalled.

CarryingtheLoad

FedEx’sGroundbusinesshas

drivenmuchofitsU.S.growth.

Averagedailyvolume

Note: Fiscal year ends May 31

Source: the company

FedExExpressU.S.

FedExGround

12

0

2

4

6

8

10

million parcels

FY2010 ’12 ’14 ’16 ’

port and other travel restau-

rants get paid flexible time,

and that it is following federal

guidelines that don’t recom-

mend service workers wear

masks.

Starbucks said Wednesday it

would pay any U.S. workers in

a 14-day quarantine after expo-

sure to the coronavirus. Star-

bucks also extended the benefit

to all employees who are above

the age of 60, pregnant or have

underlying health conditions.

“Our commitment is to al-

ways do what’s best for you,

our customers and our commu-

nities,” Rossann Williams, ex-

ecutive vice president for Star-

bucks stores in the U.S. and

Canada, said in a letter to em-

ployees on Wednesday.

Starbucks already granted

paid sick leave and insurance

to employees who work at

least 20 hours a week. But not

all franchisees extend all the

same benefits as company-

owned stores. Starbucks owns

8,867 cafes in the U.S., and li-

censes an additional 6,321 to

franchisees.

A-B
Andresen, Matt..........B
Barber, Jim..................B
Berezow, Alex.............R
Buffett, Warren........B
C-D
Chambers, Jonathan..A
Courtney, Tim...........B
Cuban, Mark................B
Dalio, Raymond.........B
F
Fabian, Matt...............B
Fernandez, Miguel......B
Finio, Damian..............B
Fishman, Neil..............R
G
Gates, Bill...................R
Gorsky, Alex..............B
Goudis, Richard...........B
Greenfield, Rich..........B
Grierson, Claire.........B
H
Haigh, Michael..........B

Hayhurst, Emma.........R

Hodulik, John............B

Hollub, Vicki..............B

I-J

Iger, Robert.................A

Johnson, William........B

Juenger, Todd............B

K

Kaya, Hakan..............B

Kounis, Nick................A

Krinsky, Jonathan.......B

Kuritzkes, Daniel........R

L

LaPorte, Wesley.........R

Levy, David..................B

Lipsitch, Marc.............R

M

Mason, Mark.............B

Matuson, Roberta.......R

Musk, Elon..................A

N-O

Nathanson, Michael....B

O'Leary, Christopher...B

P

Pai, Ajit.......................A

Panigirtzoglou, Nikolaos

...................................B

R

Rahim, Saad..............B

Rakau, Oliver..............A

S

Sandhu, Paul.............B

Smith, Fred.................B

Subramaniam, Raj......B

T-W

Tan, Hock....................B

Tusar, Greg................B

Weigold, Adam...........B

Williams, Rossann......B

Wong, Tai..................B

Y-Z

Younes, Marwan.......B

Zhang, Lidong.............B

Zhang, Nan..................B

Zhang, Yiming.............B

was exposed to the virus on a

flight.

Royal Caribbean Cruises

Ltd. will continue to sail its

planned itineraries, a spokes-

man said.Norwegian Cruise

Line HoldingsLtd. had no im-

mediate comment on trip ad-

justments.

The cruise industry, along

with much of the travel sector,

has suffered from the fallout

from the pandemic. Over the

weekend several Princess

Cruises were delayed or can-

celed after U.S. health officials

required testing of crew mem-

bers. On Wednesday, President

Trump said the U.S. would re-

strict air travel from much of

Europe.

Princess Cruises, which has

18 ships, is in the midst of re-

moving passengers from the

Grand Princess in Oakland, Ca-

lif., where at least 21 people

have tested positive for the

new virus. A passenger from a

previous sailing of the Grand

Princess later died in Califor-

nia. Hundreds became ill in

January aboard the Diamond

Princess before they were dis-

embarked in Japan.

“We were not prepared for

something like this and neither

were the health authorities in

Japan and the U.S.,” said a

Princess executive. The com-

pany’s decision to cancel sail-

ings is its latest effort to avoid

even more lasting damage to

its business. “We have to get

out of the headlines,” this exec-

utive said.

Carnival employs an average

of 92,000 people on its ships

and a further 12,000 full-time

staffers shoreside. Most of its

ship officers are from Italy, the

U.K., the Netherlands, Germany

and Norway.

Princess Cruises canceled all
its voyages for the next two
months and will cut short some
current trips, after two of its
ships suffered coronavirus out-
breaks.
It is the first ocean carrier
to suspend sailings as a result
of coronavirus. The suspension
applies to voyages departing
March 12 to May 10, Princess
said Thursday. The cruise line
is owned byCarnival Corp.
Current trips with less than
five days remaining will con-
tinue, but those extending be-
yond March 17 will be cut
short.
Two Princess Cruises
ships—the Diamond Princess in
Japan in January and the Grand
Princess in California in
March—have had to halt trips
and quarantine thousands of
passengers because of the ill-
ness.
The State Department has
advised Americans not to take
cruises. Bookings have plunged,
industry executives say.
Shares of Carnival, the
world’s biggest cruise operator,
sank 31% Thursday. Entering
Thursday, the stock had fallen
62% so far this year.
Carnival said it had no plans
to cancel voyages for its other
brands, which include Holland
America, P&O, Costa and Cu-
nard.
Viking Cruises, which has 79
mostly smaller vessels, said it
was suspending all voyages un-
til May 1 in response to the vi-
rus. In a letter to customers,
the company’s chairman said
29 passengers on a river cruise
in Southeast Asia were being
quarantined after one guest

BYCOSTASPARIS,DAVE
SEBASTIAN ANDERINAILWORTH

Carnival Says Princess

Cruises Are Canceled

For Next Two Months

Treasurer Deborah Goldberg.

Aggravating the volatility

are fundamental changes in

municipal-bond ownership

over the past decade. There

are far fewer buy-and-hold in-

vestors while mutual and ex-

change-traded funds have

added $353 billion in the de-

cade ended Dec. 31, an 82% in-

crease. If investors decide to

flee from those funds, they

can exhaust their cash on hand

and end up selling bonds at a

discount.

Broker-dealer Headlands

Tech Global Markets received

more than 50,000 requests for

bids on muni bonds a day on

Wednesday and Thursday,

compared with a typical

15,000, said Chief Executive

Officer Matt Andresen. The

number of firms that bid on

each request, which typically

averages around eight, has

fallen to three, he said. Often,

Headlands is the only bidder.

Adam Weigold, who man-

ages $5.5 billion in municipal-

bond mutual funds at Eaton

Vance, said he was surprised

to see so many funds selling

bonds in response to outflows,

rather than using cash to re-

imburse investors.

“I would have thought there

would have been more cash

out there,” he said.

Several market profession-

als said the large number of

traders working from home as

part of efforts to mitigate

community transmission of

the virus may have further re-

duced liquidity in the market

because their response times

may have been slower without

access to multiple screens and

sophisticated trading floors.

Not everyone had a bad

day. Mr. Weigold, encountered

a seller asking 103 cents on

the dollar for bonds that

Eaton Vance’s analysts had

pegged at 110. He ended up

taking a pass, he said, when

the seller wouldn’t agree to

lower the price to 101.

“For me, this is a great op-

portunity,” Mr. Weigold said.

to do a $268 million bond deal
on Thursday to fund its capital
plan, but public officials pulled
the deal Thursday morning.
On Wednesday, when the
deal was still expected to go
forward, the state had added a
disclosure to its bond prospec-
tus saying the coronavirus
could adversely affect the
state’s economy.
“There is no way to avoid
financial impact,” said State

Continued from page B

Municipal

Bonds Fall

Sharply

Through Wednesday, UPS

shares have fallen 19.2% over

the past year, and are down

10.9% over the past five years.

In recent years, Atlanta-

based UPS has filled its lead-

ership ranks with outsiders. It

hired a PepsiCo Inc. executive

as finance chief in 2019 and a

Walmart Inc. executive in 2017

to oversee its transformation

efforts.

The company was run for

five decades by its founder,

Jim Casey. It was employee-

owned until an initial public

offering in 1999. The Atlanta

Business Chronicle earlier re-

ported that Mr. Abney was ex-

pected to step down from his

roles.

—Colin Kellaher

contributed to this article.

which resulted in management

bonuses being paid out at

around 40% of targets, leaving

some employees expecting

change at the top.

A company spokesman said

the recent performance wasn’t

tied to the management

change, which he said was

part of long-range succession

planning conducted by the

board.

Continued from page B

UPS Chief

Hands Off

To Outsider

The 200,000 workers at

StarbucksCorp.’s U.S. cafes

are on the rapidly shifting

front lines of the service indus-

try’s confrontation with the

coronavirus pandemic.

Workers who pour coffee for

millions of Americans risk ex-

posure to the virus if infected

customers visit their stores.

They are also under pres-

sure to keep cafes cleaner than

ever to reassure customers as

confirmed cases multiply

across the country.

“We take cash from custom-

ers. They are sneezing and

coughing and not covering

their mouths,” said Lacreshia

Lewis, a 27-year-old employee

at a Starbucks at Orlando In-

ternational Airport who is in-

volved in a union-backed cam-

paign for more benefits.

Ms. Lewis, who is pregnant,

wants the licensee of that Star-

bucks store, HMSHost, to pro-

vide her paid sick time and

face masks. HMSHost said

workers at its 1,520 U.S. air-

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