Latest news with #Network2.0
Yahoo
4 days ago
- Business
- Yahoo
FedEx to close 30% of package facilities as network integration ramps up
FedEx Corp. plans to close 30% of its U.S. package distribution facilities within two years under its Network 2.0 consolidation program, which is gaining momentum and expected to contribute toward $200 million in savings this quarter, executives said during an earnings briefing. In April, the integrated parcel and logistics giant completed the optimization of its parcel operation in Canada. The company is now turning its attention to the U.S. market, where it synthesized 45 U.S. stations in the fiscal year fourth quarter that ended May 31, CEO Raj Subramaniam told analysts Tuesday evening. Since its founding in the early 1970s, FedEx (NYSE: FDX) has operated in a siloed manner, with each business unit running on its own. Management aims to improve the efficiency with which FedEx picks up, transports and delivers packages by integrating the legacy Express and Ground networks, with the ultimate goal of removing surplus capacity and $2 billion in annual costs. The plan is to have a single van deliver parcels to a neighborhood rather than different vans crisscrossing the same area multiple times per day. In June, Memphis, Tennessee-based FedEx blended the operation of 30 stations across 11 local markets and will optimize another 33 stations across nine markets by the end of the month, Subramaniam said. By then, about 2.5 million packages, or 12% of total volume, will flow through consolidated facilities on an average daily basis. Executives said the company expects to reduce structural costs by $1 billion this year, much of it through Network 2.0. About $200 million of the total benefit will be achieved in the current quarter through the network transformation and the final stages of the Drive campaign, which has taken out $4 billion in costs since mid-2023. In addition to closing 100 U.S. stations, FedEx optimized 290 stations by the end of the fiscal year. The program was unveiled two years ago, but the company says it is on track. Management stressed that it is methodically implementing the network transformation to ensure it meets and exceeds current levels of service. 'We're seeing good progress on both the reliability side, as well as the financial side, for those locations we have transitioned,' Chief Financial Officer John Dietrich said. 'We're seeing a 10% improvement on our pick up and delivery costs. And we're learning and adapting along the way.' By the end of the current fiscal year, FedEx expects about 40% of total volume to flow through redesigned facilities, Subramaniam said during the third quarter earnings briefing in March. 'We have to be mindful not to disrupt service. So this is not a speed race for us. This is a journey that we intend to get right, and we want to be sure we get it right to line up the 2.0 facilities in a way that delivers the results we want' without disrupting customers, Dietrich said last month during a Bank of America presentation. Dietrich said about 1 million of 1.6 million Express packages per day have a profile that allows them to be absorbed into the Ground network. Under a new organizational structure, FedEx Ground is now part of FedEx Express and no longer exists as a separate business unit. But the physical integration will take longer than the change at the corporate level. 'We believe there are meaningful benefits to be had from this [Network 2.0] undertaking, not just in terms of raw cost savings, but better planning and service as well,' said Stifel equity analyst Bruce Chan in a client note. Rival UPS is also in the process or downsizing and consolidating its parcel footprint in the United States. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. FedEx navigates tariff swings to modest profit gain FedEx retires a dozen freighter aircraft in efficiency move FedEx taps leaders from within for LTL spinoff, to Wall Street's dismay The post FedEx to close 30% of package facilities as network integration ramps up appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
4 days ago
- Business
- Miami Herald
FedEx's delivery mess is about to hit your doorstep
Anyone who's ever waited for a delivery knows the drill. You get the shipping confirmation. You check the tracking page once…then again… then 17 more times. It's "out for delivery," until suddenly it's "delayed." Maybe it's weather. Maybe it's a reroute. Maybe it's entered a parallel universe and is now vacationing in Bermuda. And when it finally shows up, the box looks like it lost a fight with a forklift. These days, it feels like more and more packages are falling into that black hole of uncertainty. Related: Nike fumbles its biggest launch of the year Online forums are filled with complaints about missing shipments, unexpected delays, and vague tracking updates that stop mid-route. For some it's not just disruptive. Especially when you've planned your day around a signature. Or when the item is time-sensitive, expensive, or irreplaceable. Of course, some delays are inevitable. But when the problems become systemic, it raises a bigger question: What's really going on behind the scenes? Because this isn't just a case of bad luck or a one-off blip. Something is shifting inside the system - and if you've felt it, you're not alone. As of May 31, FedEx confirmed it had shut down 100 stations and converted 290 others as part of its yearslong Network 2.0 rollout. That number is set to climb even higher with 63 more stations in 20 markets undergoing changes by the end of June. The company says the goal is to streamline operations, eliminate overlap, and combine Express and Ground into one unified delivery system. That all sounds clean and your package gets caught in the middle of a network that's being rebuilt in real time. Related: Lululemon makes drastic cuts as part of strategy change On the company's latest earnings call, CEO Raj Subramaniam said FedEx expects about 2.5 million daily packages to flow through these newly optimized stations by the end of June. That's a big chunk of the 13.8 million average daily U.S. shipments the company handles. Executives insist the transformation is going smoothly. Subramaniam said, "I was just so delighted to see how well they have done, the morale of the team and how the team is working together." But with physical facility closures, re-routed delivery paths, and fewer pickup appointments, there's no denying the customer experience is changing. And everyone's noticing that it's not always for the better. FedEx is betting big on Network 2.0. The company expects the changes to eventually save $2 billion annually by the end of fiscal year 2027. If it works, that's a huge win for FedEx. But in the meantime, the move puts pressure on an already fragile system. By consolidating pickups and adjusting routes, FedEx hopes to be more competitive with UPS and simplify the process for shippers who no longer have to schedule separate pickups for Express and Ground. But fewer stations and more centralized routes could mean longer wait times, less flexibility, and more strain on remaining hubs. Brace for a fresh wave of delivery rage. FedEx is also planning pricing changes in August to reflect its new system. What that actually means for customers remains to be seen, but history says price hikes are more likely than discounts. So yes, this overhaul could make the network more efficient. But the question for customers is: efficient for whom? Because when a shipping giant starts slashing stations and calling it "progress," the people waiting on the other side of the door, often empty-handed, don't always agree. In the meantime, I'll be over here refreshing my tracking page…and praying it doesn't just say "in transit" forever. Related: Amazon's Alexa AI upgrade is even worse than expected The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
5 days ago
- Business
- Yahoo
FedEx closes 100 stations through Network 2.0 overhaul
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. FedEx has closed 100 stations as of May 31 as part of the carrier's plan to combine its separate Express and Ground networks, President and CEO Raj Subramaniam said on an earnings call Tuesday. The yearslong combination effort called Network 2.0 is picking up pace this year. By May's end, FedEx had converted 290 stations to handle combined volumes, Subramaniam said. This month, the company expects to integrate 63 additional stations across 20 markets. "That means we exit June with roughly 2.5 million average daily volume flowing through Network 2.0-optimized stations," Subramaniam said. FedEx's average daily U.S. volume was 13.8 million in Q4 of fiscal year 2025. Through Network 2.0, FedEx is shuttering dozens of facilities and adjusting others to move toward a future without overlapping Express and Ground delivery routes. Executives on Tuesday's call said they were pleased with the initiative's results so far. "We're seeing good progress on both the reliability side as well as the financial side for those locations we have transitioned," EVP and CFO John Dietrich said. FedEx has already fully optimized its Canada operations for Network 2.0 and is now implementing the overhaul in larger U.S. markets, per an earnings presentation. The carrier expects to see $2 billion in savings by the end of fiscal year 2027 as a result of the plan. Beyond financial upside, FedEx is counting on Network 2.0 to improve its position against competitors like UPS. The company is consolidating its pickup activities through the plan so shippers won't have to juggle separate Express and Ground appointments. FedEx is adjusting its pickup prices in August to support that effort. The earnings call came a few days after Fred Smith, FedEx's founder and executive chairman, died of natural causes. Smith, whose company became a logistics powerhouse and express delivery pioneer after launching operations in 1973, was 80 years old. FedEx's board of directors elected Vice Chairman R. Brad Martin to take over as board chairman, per a securities filing. Recommended Reading FedEx Network 2.0 closures hit California, Massachusetts
Yahoo
23-06-2025
- Business
- Yahoo
Citi Cites FedEx's (FDX) Cost Cuts and Freight Spin-Off to Support Buy Rating
FedEx Corp. (NYSE:FDX) is one of the 10 most undervalued industrial stocks to buy according to analysts. A weaker industrial economy has impacted FedEx's growth, and the company had to lower its profit guidance early in the year due to higher-than-expected inflation and softening demand. Since its last earnings report in March, little has improved on that front, and the stock has reflected this weakness, falling 19.4% year-to-date. However, Citi analyst Ariel Rosa remains constructive on the name. Rosa, in a note dated June 18, reiterated a Buy rating on the stock, with an unchanged $267 price target. She highlighted a series of strategic changes intended to strengthen its long-term position, which serves as the basis for her optimistic view. Her rating also reflects confidence in FedEx's ability to improve efficiency and earnings despite near-term challenges. pio3 / The company is moving forward with its Network 2.0 plan, integrating its Express and Ground units to streamline operations. It is also preparing to spin off its Freight business, a move seen as unlocking more focused growth potential and value from this business. In addition, FedEx continues to benefit from its DRIVE cost-cutting program, which has already delivered notable savings and is expected to support margin improvement over time. While the demand backdrop remains uncertain, especially with global trade slowing, Rosa believes FedEx's restructuring efforts and leadership changes could pay off in the longer term. FedEx Corp. delivers packages and freight to multiple countries and territories through an integrated global network. The Company provides worldwide express and freight delivery, ground small-parcels, less-than-truckload, supply chain management, customs brokerage services, trade facilitation, and electronic commerce solutions. While we acknowledge the potential of FDX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and . Disclosure: None.
Yahoo
10-06-2025
- Business
- Yahoo
FedEx (NYSE:FDX) Increases Annual Dividend by 5% to US$5.80 Per Share
FedEx recently increased its annual dividend rate by 5%, highlighting its commitment to delivering shareholder value. Over the past month, the company's shares rose by 2%, in line with the broader market's positive movement. The dividend announcement likely reinforced FedEx's positive trajectory within the context of the company's ongoing privacy enhancements with clients. Meanwhile, the market was buoyed by optimism surrounding U.S.-China trade talks and strong corporate earnings reports, creating a favorable backdrop for FedEx's performance in conjunction with these broader trends. Every company has risks, and we've spotted 1 warning sign for FedEx you should know about. Find companies with promising cash flow potential yet trading below their fair value. The recent dividend increase by FedEx underscores its commitment to enhancing shareholder value, which aligns with the company's ongoing initiatives like the DRIVE, Network 2.0, and Tricolor strategies mentioned in the analysis. These efforts are geared toward cost-saving and network optimization, potentially improving margins and efficiency—factors that could significantly boost revenue and earnings forecasts. In turn, this might positively influence analysts' earnings expectations and drive investor confidence, reinforcing the company's projected growth trajectory. Over the last five years, FedEx has delivered a total return of 81.50%, inclusive of dividends, indicating strong longer-term performance. This contrasts with a recent one-year performance where FedEx exceeded the US Logistics industry's negative return of 20.4%, highlighting its resilience in challenging market conditions. Relative to the broader market, these numbers position FedEx as a stable performer in the logistics sector. Despite recent share price movements, FedEx remains approximately 23.2% below the consensus analyst price target of US$277.78, reflecting potential upside as per market observers. The current share price, coupled with strategic efficiencies and revenue-enhancing measures underway, suggests that achieving the projected earnings increase to US$5.9 billion could help narrow this gap, supporting upward stock performance over the longer term. Click here to discover the nuances of FedEx with our detailed analytical financial health report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:FDX. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
