Latest news with #RajSubramaniam
Yahoo
2 days ago
- Business
- Yahoo
FedEx Freight announces C-suite leadership for spinoff
This story was originally published on Trucking Dive. To receive daily news and insights, subscribe to our free daily Trucking Dive newsletter. FedEx Freight, an LTL segment slated for a spinoff next year, is filling out its C-suite. The business detailed longtime FedEx leaders who will take over oversight of the new company and also announced an outsider as part of the mix, according to FedEx CEO and President Raj Subramaniam in an earnings call this week and an investor presentation. Those seasoned staff and their new roles are: Eddie Klank as chief human resources and legal officer. Klang has nearly three decades with FedEx, including most recently as corporate VP for corporate governance securities and tax law. Mike Lyons as the chief specialized services and commercial officer. He's been with FedEx for nearly two decades, most recently as SVP of custom critical and freight strategy, per his LinkedIn profile. Clint McCoy as chief operating officer. With nearly three decades at the company, his positions have ranged from operations supervisor to SVP of operations support and engineering. Departing from that internal hiring trend, the business recently hired Michael Rodgers as chief technology officer, the company said. He recently served as CTO for Pilot Flying J and has a background in retail and finance. As previously announced, former FedEx Freight President and CEO John Smith is returning to the role. He currently leads the LTL business along with U.S. and Canada ground operations for Federal Express. R. Brad Martin, who became chair of FedEx's board following the death of Fred Smith on June 21 at age 80, will also serve as chair of the FedEx Freight board. Recommended Reading FedEx Freight operating income drops 6%
Yahoo
2 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
3 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
3 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
3 days ago
- Business
- Yahoo
FedEx Shares Down Almost 6% Despite Q4 Earnings & Revenues Beat
Shares of FedEx Corporation FDX have lost 5.96% in after-market trading on June 24, 2025. The downside came on the back of the statement given by Raj Subramaniam, FDX's president and chief executive officer, on the company's earnings call. He stated, 'The global demand environment remains volatile. We're staying close to our customers to help them plan and adapt as they navigate trade policy changes.' Citing uncertainty surrounding U.S. trade policies, especially with regard to China, FDX did not unveil any earnings and revenue predictions for the full year. This too displeased investors, resulting in the stock sliding despite reporting solid fourth-quarter fiscal 2025 (ended May 31, 2025) results. FDX's earnings and revenues surpassed the Zacks Consensus Estimate in the quarter. Quarterly earnings (excluding 81 cents from non-recurring items) of $6.07 per share beat the Zacks Consensus Estimate of $5.93 as well as improved 12.2% year over year. Share repurchases boosted fourth quarter earnings by 28 cents per share. Revenues of $22.2 billion came ahead of the Zacks Consensus Estimate of $21.7 billion and improved 0.5% from the year-ago fiscal quarter's reported figure. Quarterly results benefited from cost reduction benefits from the DRIVE program initiatives, higher volume at Federal Express and higher base yield at each transportation segment. Operating income, on a reported basis, increased 15% to $1.79 billion from the year-ago fiscal quarter's reported number. Operating margin rose to 8.1% from 7% in the year-ago reported quarter. Operating income and margin improved in the fiscal fourth quarter, as the company achieved its DRIVE structural cost reduction targets. Operating expenses (reported basis) decreased by 1% to $20.4 billion. FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation Quote Raj Subramaniam, FDX president and chief executive officer, stated, 'I am proud of the FedEx team for a solid finish to the fiscal year, delivering excellent service for our customers while achieving our structural cost reduction target, in the face of ongoing headwinds. We will continue to leverage the unique scale and flexibility of our global network to support our customers as the demand environment evolves. Looking ahead, I'm confident that our transformation initiatives, which are focused on integrating our networks and further reducing our cost-to-serve, will create meaningful long-term value.' Federal Express and FedEx Freight now represent the company's major service lines and constitute its reportable segments. Further, the results of FedEx Custom Critical are now included in the FedEx Freight segment instead of the Federal Express segment. FedEx Express segment's revenues grew 1% year over year to $18.9 billion. The Federal Express segment was aided by cost reduction benefits from DRIVE, increased U.S. and international export volume, and higher base yield. These factors were partially offset by higher purchased transportation and wage rates, one fewer operating day, and the expiration of the U.S. Postal Service contract. Our estimate is pegged at $18.1 billion. FedEx Freight revenues fell 4% from the year-ago fiscal quarter's reported figure to $2.29 billion (in line with our model estimate figure). The FedEx Freight segment was hurt by lower fuel surcharges, reduced weight per shipment, higher healthcare costs, increased wage rates and one fewer operating day. These factors were partially offset by higher base yield and a $33 million gain on the sale of a facility. Average daily shipments fell 1% year over year. Capital expenditures for the reported quarter came in at $1.47 billion. FedEx exited fourth-quarter fiscal 2025 with cash and cash equivalents of $5.50 billion compared with $5.13 billion at the end of the prior quarter. Long-term debt (less current portion) was $19.1 billion compared with $19.5 billion at the end of the prior quarter. During fiscal 2025, FDX returned almost $4.3 billion to shareholders, which includes $3 billion of share repurchases (above the original $2.5 billion stock repurchase plan) and $1.3 billion of dividend payments. Repurchases during fiscal 2025 totaled almost 10.9 million shares or 4.5% of the shares outstanding at the beginning of the year. As of May 31, 2025, FDX had $2.1 billion available for repurchases under its 2024 stock repurchase authorization. For the first quarter of fiscal 2026, FedEx expects revenue growth in the range of flat to 2% rate on a year-over-year basis. Effective tax rate (ETR) is estimated around 25%. Diluted earnings per share (EPS) are anticipated between $2.90 and $3.50, and after excluding costs related to business optimization initiatives and the planned spin-off of FedEx Freight, EPS is expected between $3.40 and $4.00. For full-year fiscal 2026, FedEx anticipates permanent cost reductions of $1 billion from the DRIVE and Network 2.0 transformation programs. Pension contributions are now expected to be up to $600 million, compared with $800 million in fiscal 2025. FDX anticipates capital spending of $4.5 billion, prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation. For fiscal 2026, FedEx stays focused on rewarding its shareholders, including the previously announced 5% dividend hike (28 cents per share), which translates to $5.80 annualized per share. The company also aims to continue a robust share repurchase program. FedEx currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. United Parcel Service, Inc. (UPS) reported first-quarter 2025 earnings (excluding 9 cents per share) of $1.49, which beat the Zacks Consensus Estimate of $1.44 and improved 4.2% year over year. Revenues of $21.5 billion surpassed the Zacks Consensus Estimate of $21.1 billion but decreased 0.7% year over year. GXO Logistics (GXO) reported solid first-quarter 2025 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings of 29 cents per share beat the Zacks Consensus Estimate of 26 cents but declined year over year. Revenues of $2.97 billion outpaced the consensus mark of $2.91 billion as well as improved year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Parcel Service, Inc. (UPS) : Free Stock Analysis Report FedEx Corporation (FDX) : Free Stock Analysis Report GXO Logistics, Inc. (GXO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research 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
