Global logistics giant FedEx has lowered its financial forecast, citing ongoing economic challenges within the US industrial sector. The company attributes this decision to weaker-than-expected demand for freight and business-to-business services during the third quarter. As a result, FedEx shares dropped approximately 5% in after-hours trading. Management emphasized that while there was some improvement compared to the previous period, it was insufficient to align with earlier projections. In response, FedEx is implementing cost-cutting measures and efficiency improvements to mitigate these adverse conditions.

During their recent earnings call, FedEx executives highlighted several key issues affecting performance. CEO Raj Subramaniam noted that macroeconomic uncertainty remains persistent, suggesting little likelihood of significant improvement before mid-2026. CFO John Dietrich further elaborated on how reduced contract revenues from ending an agreement with the US Postal Service added pressure to the current situation. Additionally, discussions around tariffs revealed limited preemptive action by customers seeking to avoid future import charges.

Brie Carere, chief customer officer, mentioned observing slight fluctuations in Asia-Pacific markets toward late February and early March. However, she stressed that advancing shipments to circumvent tariff increases proved impractical for most clients due to inventory management complications. Looking ahead, Carere indicated potential price hikes as businesses prepare for anticipated cost adjustments.

FedEx's revised outlook underscores broader concerns about the resilience of the US industrial economy. By acknowledging these headwinds and taking proactive steps to optimize operations, the company aims to stabilize its position amidst challenging market dynamics. Despite near-term difficulties, FedEx continues exploring strategies to enhance value for stakeholders amid evolving global trade environments.