Transportation
FedEx Profit Falls Below Expectations on Drop in Air and Truck Cargo
- Express unit profit margins sank to 1.3%, even after cost cuts
- Facing business moves away from just-in-time supply chains
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FedEx Corp.’s shares tumbled after an earnings report that exposed weakness at the company’s express air business, raising questions on whether deep cost cuts are enough to boost the profit potential of a unit that requires heavy spending to purchase, maintain and fly aircraft.
FedEx Express, the company’s largest unit by sales, is still struggling from weak freight demand and overcapacity as commercial airliners that also carry cargo resume international flights. The business was also hurt by customers who opted to send packages by a slower, less expensive mode of transport, including the US Postal Service.