FedEx Group is one of the world's largest express delivery companies. It uses a global aviation and land transportation network to provide express delivery services to more than 220 countries and regions, connecting the global GDP to more than 99% of the market.
Although the logistics environment continues to face challenges, after the cost-cutting measures achieved results, FedEx raised its 2023 fiscal year earnings forecast.
FedEx freight division's operating profit rose 14.5 percent year-on-year to $0.386 billion in the second quarter. Revenue per quintle, one part based on a rate increase of 21.1% year-on-year, while revenue per shipment increased by 11.3% year-on-year. Announcing its latest quarterly results, FedEx said that in response to declining cargo and parcel volumes and a weak economy, the airline is parking trucks, laying off employees and limiting new hires, focusing on improving production and revenue quality.
Express delivery has always been the main business of FedEx Group. As the business environment is still facing restrictions, the revenue of this business has dropped most obviously.
FedEx is aggressively pursuing a cost-cutting strategy, and while the cuts are sure to make headlines, they are not a signal that FedEx Freight or any other LTL carrier is heading for a runaway truck ramp. Instead, lower costs appear to be driving financial improvements, and FedEx Freight is expected to be better prepared for the next economic rebound.
Pricing retention
According to data from DAT Freight and Analytics, although FedEx did not directly mention the change in LTL rates on its earnings call, annualized revenue per cargo increased by 11.3% and LTL yields increased by 21.1%. These results highlight the divergence between the LTL industry and the more fragmented and larger trucking industry, in which contract rates fell by an average of about 14%. In contrast, the increase and reduction of LTL rates vary from carrier to shipper.
FedEx chief marketing and communications officer Brie Carere said that "the pricing discipline of the whole LTL industry is very strong, and we expect the market to remain rational".
some LTL shippers reported that they were offered LTL contract rate reductions, some of which were nearly 10 percent year-on-year, Jindel said LTL rate concessions were "uneven" rather than consistent or widespread. Other shippers also said there was no "market adjustment" or price war for LTL.
Forwardernet.com