$FDX To Cut $2.7 Billion In Costs

Market Watch headline: FedEx plans up to $2.7 billion in cost cuts, higher shipping rates as demand weakens

Sub-headline: ‘There’s a time lag between the actions we can take on reducing the line-haul network. That’s all it is,’ CEO says

Last Updated: Sept. 22, 2022 at 7:30 p.m. ET
First Published: Sept. 22, 2022 at 3:10 p.m. ET


FedEx Corp. on Thursday announced between $2.2 billion and $2.7 billion in cost savings for the fiscal year ahead and said it would raise shipping rates for air and ground services in January, after what it said was a slowdown in volume and “weakening economic conditions.”

Executives, during FedEx’s FDX, +0.84% earnings conference call later in the day, said the higher rates were a response to inflation. The package delivery giant’s CEO, when questioned by analysts, expressed confidence in the executive team currently in place, and said the company was prepared for the peak holiday-period shipping season even as it scales back and hikes prices.

However, he said he hadn’t anticipated the “tremendous inflation of costs” that hit last year. And executives said they expected demand levels seen in late August — when they said spot rates for ocean and air transportation in parts of Asia took a sharp turn south — to continue for the rest of the year.

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