(FORTUNE Magazine) – When FedEx's pilots threatened to strike last fall, David Shoenfeld's first thought was for the company's relationship with its customers. Recent strikes at archrival UPS and Northwest Airlines had made it clear what not to do: allow customers to be caught by surprise. "Customers made it very clear," says Shoenfeld, now senior vice president for worldwide marketing, customer service, and corporate communications. "They wanted us to let them know in advance, let there be no surprises. But if we let them down on those points, then it would be a new day."

Shoenfeld decided that the best way to deliver the news straight up was via the company's Website. "Long before there was even the slightest hint of a concrete fear, we went out on the site," Shoenfeld recalls. Soon a daily Pilot Negotiation Update box appeared on the first screen of fedex.com, putting updates just a click away. Telemarketers were converted to e-mail address collectors, allowing messages to be pushed out to over 30,000 customers. Even FedEx invoices bore a line pointing customers to the website for news. As it turned out, there was no strike, but the Website had prepared customers for the worst.

FedEx has understood for years the power of serving customers through technology. Its 20-year-old information network, Cosmos, has always kept track of packages for customer reps handling anxious calls. Over the past few years the company has begun to tie Cosmos to the Web. When fedex.com launched in late 1994, it had just two screens: one with a box where you could enter a tracking number and a second to show where your package was. Today fedex.com has grown to over 8,000 pages, 315,000 packages a day going to 209 countries are tracked on-site, and a program called interNetShip helps business customers handle all their shipping needs without ever picking up the phone--the program even lets them print out shipping labels from any recent Web browser. "Our objective is to make the online experience the preferred way of doing business," says Shoenfeld.

Customers are gradually becoming converted to the convenience of web-based service; Web page views now outnumber calls to the company's 800 phone number. That lets the staff of FedEx's 16 U.S. call centers focus on problem solving rather than simply finding information. The company has even equipped its phone service reps with Web access, because that gives the reps better tools to track packages and direct customers to drop-off locations.

All this online customer service delivers the most tangible benefit of all: a more profitable bottom line. Laurie Tucker, FedEx senior vice president for electronic commerce and customer service, says that if not for online services, the company would need ten more call centers.

--Ann Harrington