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FedEx to cut up to US$2.7 billion in costs, fears global recession
来源：shippingazette 编辑：编辑部 发布：2022/09/27 09:29:42
FEDEX has announced US$2.2 billion-$2.7 billion in cuts are in the works, plus a hefty increase in shipping rates for air and ground services in January, reports New York's MarketWatch.
"There's a time lag between the actions we can take on reducing the line-haul network. That's all it is, said CEO Raj Subramaniam.
Mr Subramaniam said recession is coming for the global economy. The CEO's pessimism came after FedEx missed estimates on revenue and earnings in its first quarter.
The package delivery giant's CEO, when questioned by analysts, expressed confidence in the executive team currently in place, and said the company was prepared for the peak holiday-period shipping season even as it scales back and hikes prices.
However, he said he hadn't anticipated the ¡°tremendous inflation of costs" that hit last year. And executives said they expected demand levels seen in late August - when they said spot rates for ocean and air transportation in parts of Asia took a sharp turn south - to continue for the rest of the year.
Mr Subramaniam said the company ran a complex operation, making it difficult to respond to conditions in the air and on the ground more quickly as demand faded.
Airing FedEx's cost-cutting plans following its pre-announced quarterly results that stunned Wall Street and raised deeper anxieties about the company and the US economy.
The cuts, which added specific figures to cost-reduction plans announced last week, will largely come from FedEx's big, internationally focused Express business, which offers overnight and expedited air and ground deliveries in the US and abroad.
"There's a time lag between the actions we can take on reducing the line-haul network. That's all it is, said CEO Raj Subramaniam.
Mr Subramaniam said recession is coming for the global economy. The CEO's pessimism came after FedEx missed estimates on revenue and earnings in its first quarter.
The package delivery giant's CEO, when questioned by analysts, expressed confidence in the executive team currently in place, and said the company was prepared for the peak holiday-period shipping season even as it scales back and hikes prices.
However, he said he hadn't anticipated the ¡°tremendous inflation of costs" that hit last year. And executives said they expected demand levels seen in late August - when they said spot rates for ocean and air transportation in parts of Asia took a sharp turn south - to continue for the rest of the year.
Mr Subramaniam said the company ran a complex operation, making it difficult to respond to conditions in the air and on the ground more quickly as demand faded.
Airing FedEx's cost-cutting plans following its pre-announced quarterly results that stunned Wall Street and raised deeper anxieties about the company and the US economy.
The cuts, which added specific figures to cost-reduction plans announced last week, will largely come from FedEx's big, internationally focused Express business, which offers overnight and expedited air and ground deliveries in the US and abroad.