FedEx to Fresh Aire: Part One

     Running the FEDEX operation in Poland was not the typical FEDEX job. I doubt that many of the US-based employees of Fred Smith's Malcolm Baldridge Award winning organization would have believed that a Country Director for FEDEX spent time arranging overseas study and travel visas for contractors (and their children) as bribes for customs clearance assistance.  None of this was out of the normal scheme of doing business for our agent in Poland, PZL, the Polish State Aviation Agency. This was the company we had selected to carry out all deliveries and pickups in the country.

     PZL was suffering terribly financially from the fall of communism and viewed the Soviet demise as the biggest threat to their existence as a company. From day one, when I met Ryszard Leja, the Managing Director of PZL in Poland, he made it clear that our relationship would get better every day as long as we took care of each other first...and then FEDEX and PZL. And, as was customary in the old Soviet-style, we were obligated to bribe officials into holding up our competition's customs clearance processes. In the end, if everyone was bribing everyone else, I'm not too sure if ANY of the express delivery companies were getting faster customs clearance.  Corporations operating in Poland went from using DHL then switching to FEDEX or TNT or UPS all the time. In the end, DHL seemed to have the upper hand on everyone as far as delivery guarantees went. DHL was the first in the market and had employed a lot of former customs officials and their family.

     By 1992, it became clear that FEDEX's losses in Western Europe were going to bring the whole operation down throughout the rest of Europe. Keeping with the US model of financing air line hauls between all the major hubs, FEDEX was losing about $60M per year in keeping the operation going in Western Europe.  Most line hauls were less than 30% full of packages that would have been necessary to break even.

     Eastern Europe and Russia were operating much differently on bare bones budgets where the agents were carrying all the liability and costs.  FEDEX brought shipments in on commercial airlines and only paid agents for their successful pickups and deliveries. The agents had to figure out how to do it within the service agreements that they had signed. Not long after I took over the reigns in Poland, we were already operating in the black but the signs were clear that it was just a matter of time before pink slips would be sent to Eastern European agents and country directors (the only FEDEX employees in each country).

     My work at the US Embassy was steady enough (teaching for the USIA and doing my little jobs for the CIA Desk), but I began looking for ways to slide into another official role...preferably a corporate ex-pat job bringing another American or British firm into the region. I wasn't averse to doing some kind of trading in goods (and knew there was a lot of money to be made) but I really had no experience...other than the banknotes I had smuggled out of Poland and sold at auction in Los Angeles eight years earlier. Also, I was afraid of losing the small nest egg I was accumulating at my Deutsche Bank account in Berlin. It was my intent to buy a nice flat in Krakow and I did not want to put that money at risk.  It was clear to me, though, that the entrepreneurial activity abuzz in Eastern Europe and the former Soviet Bloc was making a lot of millionaires and I was not among that crowd. It bugged the hell out of me that I was delivering their contracts to their front doors but not invited ever to share in the wealth that was being made...and I wasn't sure how to transition myself to being a player in that game.