Business

Worsening economic conditions lead to fall in global shipping volumes: FedEx

Transport company to close 90 office locations, defer staff hiring, cancel projects, reduce labor hours volume

Worsening economic conditions have led to decline in global shipping volumes, according to the US-based multinational transport firm FedEx.

“First quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter,” the company said in its financial results statement late Thursday.

The firm said its financial results were impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts.

Due to deteriorating financial conditions, the company decided to close over 90 office locations and five corporate office facilities worldwide, defer staff hiring, cancel certain planned network capacity and other projects, and reduce labor hours volume.

FedEx saw its operating income declined to $1.19 billion in June-August period, down 15% from $1.4 billion year-on-year, according to the statement.

The company also revised down its capital spending estimate for fiscal year 2023 to $6.3 billion, from its prior forecast of $6.8 billion.

FedEx said in June that lower economic growth and supply chain disruptions led to lower shipment demand in the March-May period this year.

Although the company’s operating results improved during that period by its revenue management actions, “global volume softness, driven by COVID lockdowns, geopolitical uncertainty, and slower economic growth, partially offset the year-over-year improvement,”it said in Thursday’s statement.

“Volumes declined year-over-year due to efforts to constrain economy volume as well as slower customer demand,” President and CEO Rajesh Subramaniam said in a statement on June 23.

Source
aa

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button