FedEx’s Problems Are About FedEx, Not the World
The company’s dire pronouncements most likely stem from festering operational issues and not a sudden global macroeconomic calamity.
FedEx would benefit from combining its Express and Ground units.
Photographer: Luke Sharrett/Bloomberg
The new chief executive officer of FedEx Corp., Raj Subramaniam, is off to a rough start. Late Thursday, he warned of a worldwide recession as inflation ravages consumers’ buying power, central banks jack up interest rates to subdue overheated demand and China’s policy to stamp out every case of Covid-19 becomes more of a self-inflicted wound on production. The company made the unusual decision to pre-announce earnings well below consensus estimates and pull its annual financial guidance, which it had just provided in June.
Investors promptly shaved off more than a fifth of the company’s market capitalization. Before the market goes into a prolonged panic based on FedEx’s pronouncements, though, it would be prudent to check with United Parcel Service Inc. and Deutsche Post AG’s DHL unit to see whether they are experiencing the same sudden calamity.