FedEx struggles market weakness, cut costs

FedEx is continuing to focus on cost saving initiatives in response to weak express demand as it reported revenue of $21.7bn in its first quarter 2024, ended August 31. The company attributed a 19% improvement in reported net income to $1.1bn to its ‘DRIVE’ programme t0 improve operational efficiency and reduce expenses. “First quarter results improved primarily due to the execution of the company’s DRIVE program initiatives and continued focus on revenue quality. The improvement in operating results was partially offset by ongoing demand weakness,” said the company. Revenue at FedEx Express was down 9% year over year, but the division benefited from reduced operating expenses. “Volume remained pressured though total Express volume declines moderated sequentially,” noted Brie Carere, executive vice president, chief customer officer. FedEx Express operating income increased 18% during the quarter. “Cost reductions and transformation efforts at FedEx Express included structural flight reductions, alignment of staffing with volume levels, parking aircraft, and shifting to one delivery wave per day in the US, all of which more than offset the impact of lower revenue,” added John Dietrich, executive vice president, chief financial officer.