Tue. Jul 23rd, 2024

FedEx preps for $500M headwind after US Postal Service split

June 27, 2024

READ FULL ARTICLE AT » www.supplychaindive.com

  • FedEx expects a $500 million headwind in fiscal year 2025 from the looming expiration of its U.S. Postal Service air cargo contract, FedEx EVP and CFO John Dietrich said in a Q4 earnings call Tuesday.
  • The delivery giant is preparing to aggressively reduce Postal Service-related costs following the contract’s Sept. 29 expiration to minimize the impact to its bottom line. FedEx has already permanently retired 22 Boeing 757 freighters in its U.S. network to match capacity with demand needs, according to an earnings release.
  • “We’ve got a pretty good hold on what those costs are,” Dietrich said of the $500 million headwind. “We’re going to be aggressively going after them beginning in Q2 and it’s going to flow into Q3. And those aggressive mitigation efforts should start to really take hold in Q3 and beyond.”
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