FedEx Adds Data-Driven Solutions as Volume Continues to Stabilize
FedEx saw its volume continue to stabilize during the quarter ending May 31 after experiencing year-over-year declines.
In May, its FedEx Express U.S. domestic package volume was down 1% year over year, while its FedEx Ground was up 1%, its FedEx Express international export was up 9% and its FedEx Freight LTL was up 1%, according to a presentation released Tuesday.
“While we saw modest yield improvement and signs of volume stabilization across segments, we have not yet seen a notable increase in demand,” Raj Subramaniam, president and CEO of FedEx, said Tuesday during the company’s quarter earnings call.
The FedEx Ground volume growth was driven by Ground Commercial, while FedEx Freight saw a slight increase in average daily shipments, according to the presentation.
“In U.S. domestic package, year-over-year volume declines continued to moderate,” Brie Carere, executive vice president and chief commercial officer at FedEx, said during the call.
During fiscal fourth quarter 2024, the firm also completed its transition to “One FedEx,” consolidating FedEx Express, FedEx Ground and FedEx Services into Federal Express Corp. as of June 1, according to the presentation.
This new operating structure will reduce costs and “allow teams to move with speed,” the presentation said.
The firm also provided updates on two of its latest innovative, data-driven solutions in the earnings report.
In its healthcare portfolio, FedEx reported that more than $1 billion of its healthcare-related revenue comes from customers who also use FedEx Surround, the company’s solution that provides insights to help its customers monitor and solve their supply chain challenges, per the presentation.
“Surround gives customers real-time visibility into their shipment by combining information about the package with external data such as weather to predict delivery timeliness and to mitigate the risk of disruption,” Carere said.
In its eCommerce portfolio, the company launched Picture Proof of Delivery (PPOD) application programming interfaces (APIs) and signed several PPOD API pricing agreements with large retailers, according to the presentation.
Carere said during the call that PPOD “was a great new feature to improve customer confidence.”
“This is a great differentiator and represents what will be the first of many wins for our new FDX platform,” Carere said.
Looking ahead, FedEx expects to see growth in a low- to mid-single digit percentage in fiscal year 2025, according to the presentation.
The company expects this growth to be driven by improving demand trends in U.S. domestic parcel and international export. These are expected to offset “significant headwind” that will begin when FedEx’s contract with the U.S. Postal Service expires in September, per the presentation.
“Looking ahead, in fiscal year ‘25, we expect the demand environment to moderately improve as we move through the year,” Carere said.
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