Category Archives: FedEx Corporation

FedEx CEO says he expects the economy to enter a ‘worldwide recession’

From MSNBC:

  • “FedEx CEO Raj Subramaniam told CNBC’s Jim Cramer on Thursday that he believes a recession is impending for the global economy.
  • The CEO’s pessimism came after FedEx missed estimates on revenue and earnings in its first quarter. The company also withdrew its full year guidance.”

Watch the interview:

FedEx Corporation issued this financial statement:

FedEx Corporation has provided a business update and announced the following preliminary unaudited consolidated results for the quarter ended August 31, 2022 (adjusted measures exclude the items listed below for the applicable fiscal year):

 

Fiscal 2023 Fiscal 2022
As Reported (GAAP) Adjusted
(non-GAAP)		 As Reported (GAAP) Adjusted
(non-GAAP)
Revenue $23.2 billion $23.2 billion $22.0 billion $22.0 billion
Operating income $1.19 billion $1.23 billion $1.40 billion $1.49 billion
Diluted EPS $3.33 $3.44 $4.09 $4.37

 

This year’s and last year’s quarterly consolidated results have been adjusted for:

 

Impact per diluted share Fiscal 2023 Fiscal 2022
Business optimization costs $0.07 $ —
Business realignment costs 0.04 0.19
TNT Express integration expenses — 0.08

First quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter. FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.

While the company took immediate and decisive action to adjust its cost base, the impact of cost actions lagged volume declines, and operating expenses remained high relative to demand. Please see the tables below for preliminary results for each transportation segment.

“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations,” said Raj Subramaniam, FedEx Corporation president and chief executive officer. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”

Cost Initiatives

 

The company expects the benefits of cost actions to mitigate the effects of reduced demand throughout the remainder of fiscal 2023. These cost actions include:

 

  • Reduction in flight frequencies and temporarily parking aircraft;
  • Volume-related reductions in labor hours and other linehaul expenses;
  • Consolidation of certain sort operations to drive productivity;
  • Reduction of Sunday operations at a number of FedEx Ground locations;
  • Cancellation of certain planned network capacity and other projects;
  • Deferral of staff hiring;
  • Closure of over 90 FedEx Office locations; and
  • Identification of five corporate office facilities to be closed, with additional real estate rationalization planning under way.

Outlook

 

  • As a result of the preliminary first quarter financial performance and expectations for a continued volatile operating environment, FedEx is withdrawing its fiscal year 2023 earnings forecast provided on June 23, 2022.
  • While continuing aggressive cost reduction actions, the company expects business conditions to further weaken in the second quarter. For the second quarter of fiscal 2023, FedEx is currently expecting revenue of $23.5 billion to $24.0 billion, earnings per diluted share of $2.65 or greater, and earnings per diluted share excluding costs related to business optimization initiatives and business realignment activities of $2.75 or greater.
  • Anticipated capital spending for fiscal year 2023 has been revised to $6.3 billion, compared to the prior forecast of $6.8 billion.
  • The company reaffirms its previously announced plan to repurchase $1.5 billion of FedEx common stock in fiscal 2023. The company expects to repurchase $1.0 billion of FedEx common stock during the second quarter.

Photo: FedEx Express’ Memphis (MEM) cargo hub.

These forecasts assume the company’s current economic forecast and fuel price expectations, no additional COVID-19-related business restrictions, successful completion of the planned stock repurchases during the second quarter, and no additional adverse geopolitical developments. FedEx’s earnings per share forecast is based on current law and related regulations and guidance.

FedEx plans to provide additional details on its cost initiatives and updated outlook during its upcoming earnings call, scheduled for 5:30 p.m. EDT on September 22, 2022.

Transportation Segment Performance for the Quarter Ended August 31:

FedEx Express

(Adjusted measures exclude the items discussed below under “Reconciliations of Non-GAAP Financial Measures to GAAP Financial Measures.”)

 

Fiscal 2023 Fiscal 2022
As Reported (GAAP) Adjusted
(non-GAAP)		 As Reported (GAAP) Adjusted
(non-GAAP)
Revenue $11.1 billion $11.1 billion $11.0 billion $11.0 billion
Operating income $174 million $188 million $567 million $660 million

FedEx Ground

Fiscal 2023 Fiscal 2022
As Reported (GAAP) As Reported (GAAP)
Revenue $8.2 billion $7.7 billion
Operating income $694 million $671 million

 

FedEx Freight

Fiscal 2023 Fiscal 2022
As Reported (GAAP) As Reported (GAAP)
Revenue $2.7 billion $2.3 billion
Operating income $651 million $390 million

FedEx Express aircraft photo gallery:

FedEx donates $3.5 million to Orbis in support of sight-saving ‘Flying Eye Hospital’

FedEx Corporation has announced its renewed commitment to Orbis International’s sight-saving mission with a US$3.5 million donation to help provide financial, logistics and operational support to the organization and its Flying Eye Hospital over the next five years.

The Orbis Flying Eye Hospital is a mobile teaching hospital that travels the world providing vision-saving eye surgeries and training to local eye care teams. Orbis’s cadre of more than 400 volunteer medical experts – including doctors, nurses, and others – carry out the trainings and procedures free of charge. FedEx donated the MD-10 aircraft and provides aircraft parts, maintenance, and pilot training at no cost to Orbis. The aircraft is flown by FedEx Express pilots who volunteer during their time off to navigate the plane around the world on Orbis missions. FedEx has supported Orbis for more than 33 years through more than US$27 million in donations and in-kind shipping.

Onboard a FedEx-donated MD-10 aircraft, Orbis’s iconic Flying Eye Hospital is the world’s only fully equipped ophthalmic teaching and training hospital. Orbis is a global organization that brings people together to fight avoidable blindness, restore vision, and help ensure no one loses their sight to preventable or treatable conditions. For nearly four decades, the Flying Eye Hospital has traveled the world delivering best-in-class training for eye care professionals in areas with the greatest need.

Last year, Orbis’s virtual Flying Eye Hospital projects had over 850 enrollments by participants from nine countries. Orbis expects to reach 20 countries through its virtual Flying Eye Hospital projects this year

These efforts are part of the FedEx Cares 50 by 50 campaign to positively impact 50 million people around the world by our 50th anniversary in 2023.

FedEx becomes Official Sponsor of the UEFA Champions League, celebrates the 100th Boeing 767

"100th Boeing 767 FedEx" special logo

FedEx Corporation and UEFA have signed a three-year agreement in which FedEx will sponsor the UEFA Champions League commencing at the start of the 2021/22 tournament and extending for three editions through to 2023/24. The agreement also includes sponsorship rights for the UEFA Super Cup, UEFA Youth League finals, the UEFA Champions League Futsal finals and UEFA eChampions League.

The sponsorship builds on the existing relationship with UEFA. FedEx became a main sponsor of the UEFA Europa League in 2015 and a UEFA National Team Football sponsor in 2019.  FedEx is also the Official Logistics Partner of UEFA EURO 2020 taking place in the summer of 2021 across multiple European host cities.

This new sponsorship of the UEFA Champions League reaffirms FedEx as a long-standing sponsor of UEFA.

In 2016, FedEx became the first sponsor to begin collaborating with the UEFA Foundation for Children, using football as a tool to deliver positive and social impact in communities around the world. Alongside sponsorship of the UEFA Europa League and UEFA EURO 2020, FedEx and the UEFA Foundation have delivered safe community football fields in Spain, Poland, Brazil, and South Africa and have rolled out a co-funded “Football for Employability” program benefitting young adults in Romania, Hungary, England and Ireland. FedEx also invited local children to be player mascots at UEFA Europa League finals in collaboration with non-profit organizations in Stockholm (Sweden), Lyon (France) and Baku (Azerbaijan), where an all-girl player mascot line-up made footballing history.

“Our global sponsorship of UEFA Champions League will deliver unrivalled opportunities for our brand, team members, customers, and communities. Aligning our brand with world class sports performance allows us to connect our services to our audiences through the passion and emotions generated by sports and enables us to contribute positively to our local communities,” said Brie Carere, executive vice president, chief marketing and communications officer, FedEx Corp.

“We’ll continue to explore powerful social responsibility collaborations with the UEFA Foundation for Children, as we have done throughout our UEFA Europa League sponsorship.”

“FedEx has proved to be an incredibly valued UEFA partner. We are delighted they are continuing their evolution with us, which started in 2015 and now sees them supporting our flagship club competition, the UEFA Champions League,” said UEFA marketing director Guy-Laurent Epstein. “The UEFA Champions League is the world’s greatest club competition, and we are looking forward to working with FedEx closely over the next three years to help them activate their numerous projects. They will benefit not just the footballing community, but also look to have a positive impact on the environment”.

In other news, the company is preparing to take delivery of the 100th Boeing 767. N277FE carries this special logo on the rear fuselage.

Top and Above Copyright Photo: FedEx Express Boeing 767-300F ER N277FE (msn 66246) (100th Boeing 767 FedEx) PAE (Nick Dean). Image: 953640.

FedEx aircraft slide show:

FedEx commits to carbon-neutral operations by 2040

FedEx Corporation, home of the world’s largest cargo airline, announced an ambitious goal to achieve carbon–neutral operations globally by 2040.  

To help reach this goal, FedEx is designating more than $2 billion of initial investment in three key areas: vehicle electrification, sustainable energy, and carbon sequestration. 

This includes a pledge of $100 million to Yale University to help establish the Yale Center for Natural Carbon Capture, accelerating research into methods of carbon sequestration at scale, with an initial focus on helping to offset greenhouse gas emissions equivalent to current airline emissions.   

“We have a responsibility to take bold action in addressing climate challenges,” said Frederick W. Smith, Chairman and CEO, FedEx Corp. “This goal builds on our longstanding commitment to sustainability throughout our operations, while at the same time investing in long-term, transformational solutions for FedEx and our entire industry.” 

Key steps toward reaching the carbon neutral goal include:  

  • Vehicle Electrification. By 2040, the entire FedEx parcel pickup and delivery (PUD) fleet will be zero–emission electric vehicles. This will be accomplished through phased programs to replace existing vehicles. For example, by 2025, 50% of FedEx Express global PUD vehicle purchases will be electric, rising to 100% of all purchases by 2030.  
  • Sustainable Customer Solutions. FedEx will work with customers to offer end-to-end sustainability for their supply chains through carbon–neutral shipping offerings and sustainable packaging solutions. 
  • Sustainable Fuels. FedEx will continue to invest in alternative fuels to reduce aircraft and vehicle emissions.  
  • Fuel Conservation and Aircraft Modernization. FedEx will build on its successful FedEx Fuel Sense initiatives designed to reduce fuel consumption in its aircraft. Since 2012, the FedEx Fuel Sense and Aircraft Modernization programs have saved a combined 1.43 billion gallons of jet fuel and avoided over 13.5 million metric tons of carbon dioxide (CO2) emissions. 
  • Facilities. FedEx will continue efforts to make its more than 5,000 facilities worldwide more sustainable through continued investments in efficient facilities, renewable energy, and other energy management programs.  
  • Natural Carbon Sequestration. FedEx funding will help to establish the Yale Center for Natural Carbon Capture to support applied research into natural carbon sequestration solutions.  

The path toward sustainability requires new strategies for removing and storing Earth’s excess carbon. The Yale Center for Natural Carbon Capture will catalyze interdisciplinary research across the natural sciences and engineering in an effort to accelerate this work.  

Center researchers will develop methods that build on natural carbon storage systems, including biological ecosystems and the geological carbon cycle, improving, where possible, how quickly carbon can be absorbed, how much can be contained, and how long it can be stored. Through these efforts, Yale scientists aim to create a portfolio of carbon removal strategies that have impacts on a global scale.  

Building upon initial successes in the aviation sector, the center will broaden its scope to address additional global sources of emissions – publishing and sharing its findings so that businesses, industries, and governments can benefit from work that will accelerate the adoption and implementation of natural carbon capture strategies around the world. 

“Addressing climate change is a complex challenge that demands urgent action, and natural carbon capture strategies will be one key part of that action,” said Dr. Ingrid C. “Indy” Burke, the Carl W. Knobloch, Jr. Dean of the Yale School of the Environment. “Through the creation of the Yale Center for Natural Carbon Capture, we aim to develop measurable carbon capture strategies to help offset carbon emissions globally.” 

The FedEx commitment builds on a history of sustainable practices. Since 2009, the company’s efforts have contributed to an approximately 40% reduction in CO2 emissions intensity across the enterprise while package volume increased 99% during that period. Recently, FedEx was ranked first in its industry on JUST Capital’s 2021 list of “America’s Most Just Companies” in the environment category and first in the travel, transport and logistics sector of Newsweek’s “America’s Most Responsible Companies 2021.” 

“While we’ve made great strides in reducing our environmental impact, we have to do more. The long-term health of our industry is directly linked to the health of the planet, but this effort is about more than the bottom line – it’s the right thing to do,” said Mitch Jackson, Chief Sustainability Officer, FedEx Corp. “At FedEx, we are committed to connecting people and possibilities resourcefully and responsibly. The steps we are taking today will contribute a positive impact for generations to come.”  

FedEx Express aircraft photo gallery:

FedEx Express aircraft slide show:

First ATR 72-600F is delivered to FedEx Express, operated by ASL Airlines Ireland

FedEx Express, a subsidiary of FedEx Corp. and the world’s largest express transportation company, has announced the delivery of the first ATR 72-600F aircraft to its feeder aircraft network. The delivery of the new state-of-the-art freighter was made from ATR to FedEx in Toulouse, France.

The ATR 72-600F is the first-ever production freighter built by ATR and can carry heavier payloads than ATRs converted from passenger configuration. The aircraft has a large cargo door, allowing for carriage of bulk cargo as well as Unit Load Device (ULD) configurations. It has a bulk capacity of 2,630 cubic feet (74.5 cubic meters), and when in ULD mode it can accommodate up to seven LD3 containers or five 88” x 108” pallets.

FedEx originally announced the purchase agreement with ATR in November 2017. Under the agreement, FedEx Express made a firm purchase of 30 ATR 72-600F aircraft with options to purchase up to 20 more. Subsequent deliveries will be about six aircraft per year over a five-year period. The first ATR aircraft will be operated by ASL Airlines Ireland, a FedEx ATR operator since 2000, as part of the FedEx Express Feeder fleet.

FedEx currently deploys 364 feeder aircraft operating in 56 countries. Most of these feeder aircraft are owned by FedEx and leased and operated by different third-party air carriers under their own operating certificates. The FedEx feeder fleet is comprised of aircraft under 60,000 pounds maximum gross take-off weight and allows the company to provide fast, economical services to small and medium-sized businesses around the world.

The first FedEx Express flight with Pfizer’s COVID-19 vaccine departs from Grand Rapids for Memphis

FedEx Express’ first flight (FDX 884) with Pfizer’s COVID-19 vaccine departed Grand Rapids, MI Gerald Ford Airport (GRR) at 11 am local time today bound for the Memphis hub.

The flight is being operated with Airbus A300F4-605R N669FE (below).

GRR issued this statement (photos by FedEx):

The first cargo plane carrying Pfizer’s COVID-19 vaccine for domestic use departed from the Gerald R. Ford International Airport at 11 a.m. today – the first of tens of thousands of shipments that will deliver the life-saving vaccine to locations around the nation and then the world.

After the FDA authorized the vaccine for emergency use, the first doses arrived via truck from Pfizer’s headquarters in Portage at 9:45 a.m. The mood was jubilant on the airfield as crews began loading the Airbus A300 in preparation for the one hour and 30-minute flight to Memphis, Tennessee.

Transportation plays a key role in distributing the vaccine, which must be kept at negative 94 Fahrenheit. A wide-body aircraft, the Airbus A300 can carry up to 105,000 pounds of cargo.

“This is a big day for West Michigan and a historic milestone for the world that marks the beginning of the end to the global pandemic,” said Torrance Richardson, president and CEO of the Gerald R. Ford International Airport Authority. “The Ford Airport is honored to play a key role in ensuring the vaccine gets into the hands of healthcare professionals around the country.

“Our continuing investment in infrastructure has ensured we are able to meet the demands of the aggressive delivery schedule. We train and prepare for this all year long to ensure we are ready for whatever challenges come our way.”

The Ford Airport is the closest commercial airport to Pfizer’s Kalamazoo manufacturing operations with the infrastructure needed to support the transportation process. Ford Airport has a 10,000-foot runway, dedicated cargo facility, appropriate ground support and the capacity needed to stage and transport billions of doses of the vaccine.

Talks continue with four global carriers that have expressed interest in transporting the widely anticipated vaccine, which is seen as the beginning of the end of the global pandemic.

Since the beginning of the pandemic, Ford Airport has taken a number of steps to make its guest experience as safe and comfortable as possible through its Fly Safe. Fly Ford. campaign. It also recently announced it is serving as a COVID-19 drive-up test site for guests and the community.

Previously GRR issued this statement:

As the Food & Drug Administration gives the green light to Pfizer’s COVID-19 vaccine, the Gerald R. Ford International Airport is prepared to serve as a national and international gateway for distribution.

The Ford Airport is the closest airport to Pfizer’s Kalamazoo manufacturing operations with the infrastructure needed to support the transportation process. Ford Airport has a 10,000-foot runway, dedicated cargo facility, appropriate ground support and the capacity needed to stage and transport billions of doses of the vaccine, which must be kept at negative 94 Fahrenheit.

Airport officials have been in talks with four global carriers that have expressed interest in transporting the widely anticipated vaccine, which is seen as the beginning of the end of the global pandemic.

“We’re here, we’re ready to help and we’re eager to get to work,” said Torrance Richardson, president and CEO of the Gerald R. Ford International Airport Authority. “We have invested in the infrastructure needed to accommodate the wide-body aircraft that will be used to transport the vaccine – and we have the team in place to handle the aggressive delivery schedule.

“Ford Airport is honored to be a key part of the distribution chain for Pfizer’s life-saving vaccine. We often say our Airport is the gateway to the world – this gives us the opportunity to underscore that in an exceptionally meaningful way.”

Since the beginning of the pandemic, Ford Airport has taken a number of steps to make its guest experience as safe and comfortable as possible through its Fly Safe. Fly Ford. campaign. It also recently announced it will serve as a COVID-19 drive-up test site for guests and the community.

FedEx commits to more than $3.2 billion in wage increases, bonuses, pension funding and expanded U.S. capital investment

FedEx Express Boeing 767-3S2F ER N121FE (msn 43545) SAN (Michael B. Ing). Image: 932269.

FedEx Corporation (FedEx Express) (Memphis) on January 26, 2018 three three major programs following the recently enacted U.S. Tax Cuts and Jobs Act:

1) Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance-based incentive plans for salaried personnel.

2) A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.

3) Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States.

The company has made no change to its fiscal 2018 earnings or capital expenditure guidance as issued on December 19, 2017, as a result of these actions.

Copyright Photo: FedEx Express Boeing 767-3S2F ER N121FE (msn 43545) SAN (Michael B. Ing). Image: 932269.

FedEx Express aircraft slide show:

Boeing, FedEx Express are collaborating on the latest ecoDemonstrator Program testing

Boeing-FedEx "ecoDemonstrator Program"

On July 6, 2017 Boeing made this announcement. Now the program is ready to proceed with a dedicated freighter.

As part of the continuing effort to accelerate aerospace innovation, Boeing and FedEx Express, a subsidiary of FedEx Corporation and the world’s largest express transportation company, will work together to fly the next ecoDemonstrator.

Starting in 2018, a new Boeing 777 Freighter made for FedEx Express will test emerging technologies, such as propulsion advancements and flight deck innovations.

The ecoDemonstrator program, now in its fifth iteration, serves as a series of flying testbeds designed to improve the environmental performance and safety of future airplanes.

“The ecoDemonstrator program is focused on harvesting exciting new technologies that will benefit our airline customers, the flying public and the environment,” said Mike Sinnett, vice president of Boeing Commercial Airplanes Product Development.

The collaboration on the newest ecoDemonstrator project is the latest in a 38-year relationship between Boeing and FedEx.

“FedEx is committed to developing and implementing innovative solutions that connect the world responsibly and resourcefully,” said David Cunningham, president & CEO, FedEx Express. “We’re proud to work with Boeing and use our 777 Freighter to play a key role in bringing future benefits to the entire aviation industry.”

This round of ecoDemonstrator testing includes installing a compact thrust reverser developed by Boeing designed to save fuel, flight deck improvements that can improve efficient operations in and out of busy airports, and flying prototype airplane parts using cutting-edge manufacturing techniques that reduce material waste.

Flight testing is scheduled to last approximately three months before the airplane returns to the FedEx fleet.

Top Copyright Photo: FedEx Express Boeing 777-FS2 N878FD (msn 40684) (ecoDemonstrator Program) PAE (Nick Dean). Image: 939725.

Bottom Copyright Photo: FedEx Express Boeing 777-FS2 N878FD (msn 40684) (ecoDemonstrator Program) PAE (Nick Dean). Image: 939726.

Boeing-FedEx "ecoDemonstrator Program"

FedEx and TNT Express march towards their merger with no object from the European Commission

FedEx Corporation logo

FedEx Corporation (Memphis) and TNT Express N.V. (Hoofddorp, Netherlands) have jointly issued this statement concerning the on-going acquisition by FedEx of TNT stock:

TNT logo

This is a joint press release by FedEx Corporation, FedEx Acquisition B.V. and TNT Express N.V. pursuant to the provisions of Article 5:25i paragraph 2 of the Dutch Act on Financial Supervision (Wet op het Financieel Toezicht) and Article 4 paragraph 3, of the Decree on Public Takeover Bids (Besluit Openbare Biedingen Wft) in connection with the recommended public offer by FedEx Acquisition B.V. for all the issued and outstanding ordinary shares in the capital of TNT Express N.V., including all American depositary shares representing ordinary shares. This announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in TNT Express N.V. The Offer is made solely pursuant to the offer document, dated August 21, 2015 (the Offer Document), approved by the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten). Terms not defined in this press release will have the meaning as set forth in the Offer Document.

FedEx Corporation (FedEx), FedEx Acquisition B.V. (the Offeror) and TNT Express N.V. (TNT Express) hereby jointly confirm in response to recent media coverage, that to date they have not received a Statement of Objections from the European Commission. The internal deadline of the European Commission for issuing a Statement of Objections would have expired on October 23, 2015, but FedEx and TNT have been informed by the European Commission that no Statement of Objections will be issued. FedEx and TNT continue to expect that the Offer will close in the first half of calendar year 2016.