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  • Writer's pictureTeam CargoTalk

FedEx sees revenue decline by 2% to US$ 10.1 bn

FedEx saw its profits improve in the third quarter of its fiscal year despite revenues coming under pressure due to weak market conditions.

Looking at third-quarter divisional performance, FedEx Express saw revenues decline 2% to US$10.1 bn but operating income was up 96% to USD $233m. The company’s share price was up last week as a result of its better-than-expected profit performance. FedEx said the improved profit performance was a result of its DRIVE cost-cutting scheme that aims to reduce expenses by USD $4bn. In the third quarter, its ground network achieved savings of USD $290m, air costs were down USD $110m and general/admin expenses reduced by USD $150m. The savings in the air network are down to a “focus on structural transformations and reduction of flight hour costs” and optimizing its network in Europe. The company has also parked aircraft to help reduce costs and in response to weaker demand levels.

Last year, FedEx said it planned to reorganise its air network to better suit the demands of various shipment types as part of efforts to cut costs. The move will allow the company to prioritise shipments such as e-commerce to meet demands for faster transits while shipments such as general freight can be shipped at less busy times and outside of the hub and spoke system.


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