FedEx (FDX) 19 Dec 172018 Q2 Earnings call transcript

Good day, everyone, and welcome to the FedEx Corporation Second Quarter Fiscal Year 2018 Earnings Conference Call. Today's call is being recorded.

If you have any questions for the conference call, please e-mail them to ir@fedex.com. Only questions submitted by e-mail will be discussed on the call today.

At this time, I will turn the call over to Mickey Foster, Vice President of Investor Relations for FedEx Corporation. ahead. go Please

streamed second X our The at release, stat via be are XX-page This replay where [Technical slides e-mail. Written and presentation quarter questions slides and will being slides accompanying earnings and for website our are book website, call the about Difficulty] available the earnings from year. on fedex.com. welcome our are

be please given address ir@fedex.com. inquiries information. When include question, your is your contact full e-mail long-term Our Preference a send will to of strategic and name you nature.

within may take that Act. I of of safe actual cause of or remind those regarding this forward-looking the all want forward-looking risks, such performance, implied provisions meaning statements Certain forward-looking to to subject FedEx by considered listeners from Corporation act. are harbor to and the call, other Reform desires to which be uncertainties such expressed projections differ materially conference advantage Private in statements statements Litigation Securities factors, Such as the future results could the statements.

releases on For press to our SEC. filings with please the refer information these factors, additional and

Please non-GAAP call fedex.com measures of the reconciliation for on website the measures. refer our directly at a Investor Relations portion this comparable most to to the discussed GAAP financial of

and CEO Freight. and Mike FedEx Joining Executive Rob Henry and FedEx Corporation; CIO; and Mark and President, Ducker, us Allen, of Secretary; Corporation; Vice CEO Subramaniam, FedEx Chairman; President Vice Chief on Officer, Executive Marketing Officer, Colleran, Ground; Executive President and Smith, Chief and the President President, FedEx President call Sales Chief Carter, CFO; and today General Information Operating Cunningham, Bronczek, Don Express; Graf, CEO Dave Communications are FedEx and Fred Vice Maier, of Officer; FedEx Alan President, Vice of President, Raj Services Vice Executive Counsel President David Executive

will Fred on share the his now, views Smith And quarter.

quarter earnings. conference provide webcast we results, for and FedEx the our and Strategic insight global Mickey. team second believe to welcome execution stronger to will financial and positioned call afternoon, are discuss and Thank improved our Alan further a by growth. we Good and you, drove economy outlook. long-term profitable well

on is across we're to season second portfolio outstanding quarter during service pleased world the say holiday record the and for shipping around FedEx our December. into has another track and the continued

season We plan daily peak volumes year round with challenges more demand the as deliveries. than can meet intense for residential of to the heavy e-commerce double average

every is keep than for FedEx important, Promise, Purple let the which the more our around members Most me simply team outstanding. efforts outstanding I XXX,XXX stated, will thank to world their make experience FedEx

It's when become increasingly be of and will to have networks more and doors. peak us Size, customers delivering clear to trends. they matter FedEx of the around strength say world. have brand choose and to macroeconomic and the of all reliability value great packages our their trust that reach, about speed who will the reliability to Raj

effects at FedEx very of the TNT. the We're the team of in progress made recovering the from cyberattack has proud

clock the the me FedEx unprecedented professionals mitigate event. Let thousands appreciation around worked tirelessly and our of to express to who this

discussion of you update overall will Dave operations. his in global

yield growth expect earnings half in and the all volume support will of fiscal revenue of We our transportation growth segments and XXXX. second at

remains versus and to cash returns, and margins, our to Express target billion on do remain in so. goal $X.X plans billion by And income are to confident $X.X fiscal Our improve we earnings, XXXX. increase FedEx the XXXX operating segment can at we fiscal flows

season. investment, incomes the have at competitiveness. economy, legislation all and increase Congress holiday Act will advancing Jobs hope We, and U.S. job Cuts in and legislation that you reform this opportunities, solutions moment. Tax the very expand of at pro-growth, enhance pro-business by This FedEx, business offers encouraged We're a tax improve wonderful power

the turn Alan. me let call now over to And

you, and afternoon, Fred, everyone. Thank good

Our year's per adjusted last and were an year's consolidated $X.XX adjusted for respectively. year. adjusted and earnings last earnings diluted was share share, This from $X.XX expenses quarter quarterly $X.XX of XX% the up for $X.XX, per TNT integration

reported fuel higher $X.XX adjusted estimated quarter the for from favorable year and net primarily growth negative segments. impact of this rates, due quarter share. reflect each our the diluted TNT cyberattack per earnings impact improved the second As a volume Results transportation of base to and from at

from also foreign the Second paid foreign of approximately operations. associated or with diluted per $XX tax a benefit quarter dividend tax from include results our million $X.XX credits share

first tax rate effective half. for Our XX% was and the for XX.X% quarter the

$XXX Adjusted with operating efficiencies. Express. Turning and to by to continued fuel X.X%. to from and segments positive improved revenue Adjusted XX net XX% margin basis driven operating impact increased income million, the points starting and growth cost

at shipments impacted loss our by cyberattack as-reported The the and network. an revenue from the to estimated decreased in results million for primarily due Express $XXX TNT adjusted of segment, TNT

a as challenges TNT As the and X%. results. we were second our increased last cyberattack. cyberattack, the million accelerating GAAP the we from expenses for result included noted $XX international for of portions Express volume the integration integration package Despite are quarter, total quarter the of TNT in are average

to offset At to results network expansion $XXX on restraining cost, XX.X%. staffing by as higher increased self-insurance increased and to million, XX% as costs. income operating Operating continues increased Ground improved further due operating revenue work growth, and purchase reserves. to Ground, margin well partially transportation,

At X% income quality as points initiatives X.X% per increased basis operating $XXX improved to margin to million, increase Freight's a continue to shipment. by benefit in Freight, revenue year-over-year XXX revenue operating XX% results. LTL driven

quality, business to restoring by For solid are in this we summer's impacted FedEx demand and Corp., trends 'XX due cyberattack. increasing revenue FY our forecast success our enhanced

results financial second in improved see to half. expect the We

revenue prior our benefit and all segments are of Yield in second support mark-to-market earnings growth and to expected transportation adjustments. plan volume any at half growth the to

the are cost we FY various of In at reductions for implementing 'XX. addition, Ground remainder

lower impacts of ongoing expect of financial in in from the second revenues. We half diminishing but the cyberattack 'XX fiscal form the

certain Trade Networks now pension end FY and is to Express matters mark-to-market year before first forecast integration related FedEx accounting expenses $XX.XX diluted to excluding earnings for share quarter adjustments 'XX. legal $XX.XX per The and TNT

continued laws from growth, and This U.S. forecast cyberattack. assumes recovery moderate economic tax the current

spending forecast capital is if Act $X.X billion may the is Jobs 'XX still Tax although increase Our FY enacted. Cut this and for

continues, FY we TNT countries. The spanning of customs and sales delivery plan have over the integration 'XX, one pickup and and systems. regional to and and combined network end ground clearance, information global level, back the XXX technology By consolidated operations, at local operations office air

in over to expense integration the $XXX 'XX. billion, restructuring expect $X.X of expected now charges. million years be approximately is including X that FY expense Approximately We

the TNT information technology, has to investments and additional move integration FedEx for the estimate due commercial increased to and integration Our expenses process through operations a acceleration infrastructure our of platform.

periods to we our so to of beyond integration synergies In new have corporate may greater international identified tax expenses we benefiting FY to establishing our relates improve for 'XX. structure that the leverage business capabilities a portion ultimately international A profitability, addition, maximize incremental profitability opportunities new in rate. our integrated effective

our other well target $X.X business to operating in committed additional as FedEx billion Express across $X.X in profit synergies, segment includes FY global the remain and FedEx billion base to the operational entire FY TNT improvements as for of 'XX, versus We network. which 'XX

current continued the accounting growth, recovery assumes and cyberattack. laws rules from target moderate This U.S. economic tax and

is before XX% rate mark-to-market to tax accounting now effective forecast end XX% year Our pension adjustments.

from the any potential of the None lowered reform. end forecast of tax reflect range. our changes have We upper

I are us lot changes of possible questions So as turning result to a there a tax of reform. that. about know for

capital of me We system qualifying territorial a cover and much are can. into of let expensing tax possibility as I corporate XXX% So as signed law. provisions if lower the welcome tax rate, these

members. for CapEx replacement grow benefits If cash from Any XXX% technology. for capital tax of capture we the be acceleration our business uses expect of optimizing include, expensing primarily our tax would equipment to would is to mobility upward further for even and more enacted, reform create savings the FedEx and of team

the our board pension where as forecast. our plans repurchase current stock current our beyond Funding in makes modest investing Increasing and Continuing it M&A our sense. approve. program our levels, at may dividend

occurs, of capital incremental would could to and reform. As as additional next we discuss, GDP result increase likely growth. Raj materially will accommodate a tax this from expenditures triggered U.S. If U.S. increase volumes this GDP the year hiring

earnings the as primarily the to increase This $X.XX our diluted tax adjustments, to we share liabilities. $X.XX end in Act pension $X could per last deferred for per by fiscal per XXXX estimate to 'XX. our months mark-to-market the a FY due 'XX earnings of X accounting due for Cuts an revaluation enacted share Conference includes rate net fiscal If forth is range the $X.XX and on Report, to Tax year estimated share lower Jobs tax of set Joint diluted also before

corporations tax This like would level way times a U.S. corporate in the a competitive we As reform go taxes. for we stated many playing globally. more in bill making have based to long field see would past,

have service that our of levels all working this closely team of record forecasting dedication hundreds the also and thousands setting We to with to seasonal of great make manage customers delivered that careful members to this and thanks volumes again planning thanks results peak the over our world from happen.

the to call turn over we'll Now Raj.

and I you, discuss performance with industry to the everyone. some on FedEx and segment our outlook Thank and conditions broader Alan, revenue trends our and portfolio. and enhancements business and provide economic each afternoon, in commentary will update good open

We economy. see moderate growth in the global

for readings is year's materially a the show at momentum. a world up industrial best the sector the could Globally, next slightly XXXX Passage volume is U.S. is upturn U.S. GDP growth forecast PMI XX-year U.S. trade Consumer this high, of forecast growth. our since supporting forecast. Our tax current GDP solid add with reflects and synchronized global on to next reform expanding. and year confidence solid

that slides allow Overall, volume the grow our are and volumes strategies performance increase yields across show details revenue, it's succeeding clear yield so. in by doing and transportation next few and segment. portfolio to pricing of us The

yield express and and domestic business, U.S. our revenue X%, For respectively. X% increased

due the Excluding package revenue per fuel our yield increased on focus continued X% to quality. surcharge,

at TNT, yield Despite the export package FedEx of X% cyberattack X%. year-over-year impact increased QX, and revenue increased in International

impact, slightly. fuel and exchange Excluding yields declined rate

growth XX% well, as volume growth. e-commerce up segment drive saw continues revenues Ground double-digit yield The QX with at in as to and

yield package per fuel, increased Excluding X%. the

At mainly revenue FedEx by our driven Freight, X% efforts. shipment the increased LTL quality per revenue

Excluding up the LTL was X%. per impact shipment surcharge from fuel revenue revenue,

I exciting Turning very some provide wanted to to updates. peak.

days in of we As FedEx. history even Fred have mentioned, the of the the provided of busiest terrific on are some service proud we

experience growing packages; larger, many We and to on been demand increased of demand in Mondays. trends heavy that the the recent continue years: for heavier have

we the who to to are deliver customers, the our opportunity able continuing the team XXX,XXX and like this provide season. take around excellent world than members the to I'd collaboration of to close holidays engineer more hard to stretch home Thanks during thank work plan our and with were networks to service. our the

they're and delivering focused business, team the experience for on one outstanding always our thing: Our the customers. are members best in an

the well-known FedEx to approximately retail continues customers hold locations at are we year, or grow, increased to Express have can FedEx. access FedEx retailers, including Onsite off with and location pre-labeled This for can FedEx options looking X,XXX Walgreens. e-commerce Customers added with to As FedEx to new for or our access pickup. also returns. FedEx network They for Ground shipments shipments redirect Onsite drop a Office dramatically a

convenience available vast locations. including over is in FedEx on grace: a network procrastinators, X,XXX and than the now here's Walgreens, for Kroger, have Office, now We And of locations. Albertsons, Day a Walgreens other locations, XX,XXX saving more those Christmas participating majority of pickup

has peak Our stronger been is than today. during never presence it

thousands Delivery FedEx as almost of to Manager well. deliveries have almost Enrollments We doubled options and to of enrollees use Manager also secure the residential packages, percentage and year-over-year, locations. direct have FedEx convenient delivered being encourage Delivery doubled to hold customers

year packages, we have We packages unique but this an all additional additional or handling. to require residential also applying oversized not peak strategy peak packages a are surcharge pricing that for only

next is mindful continue was others customers. is monitor we be seen year's we to in measure marketplace, our informal medium and decisions and small of pricing and not and it very the medium we strategy will small This peak felt customers, have the but over from Obviously, good for but traction season. peak the different to important with

for are to we customers in around once across positioned outstanding the portfolio proud again, the world. quarter so leading provided forward remaining second the this arrive peak the holidays Once season. days well and service up our believe the look far the We to very helping again for we of results Christmas the and are

turn me Dave call now Let his to over for the Dave? remarks.

good and want leading more team in thank Raj, afternoon, to Thank of dedication Okay. year-round I to for also our members XXX,XXX you, up than and everyone. their these all Christmas. especially days

they're and They're now. on are the at the probably holidays in right they're the These the working team road, around your members air, delivering doorstep world.

operational FedEx across to by driven and strength are the report We portfolio. proud financial results, improved

success is among the our marketing sorting, of globe. and operations. up, frontline, sales, Operations, results from over picking packages collaboration This incredible all delivering course,

in some and But working the marketing day, sales of in our service world. year has all FedEx with the our marketing, and customers the our innovating smartest long, around portfolio minds every industry constantly

First, profits, the international cyberattack. Express. mentioned, let are with TNT Cost their the very FedEx services. The me also underlying business efficiencies remained off of despite grew fundamentals the and growth with base higher They Express start just and freight Alan of improving. as revenues strong, in rates package and impact

productivity. which For fleet aircraft we continue example, increases reliability, our to see higher

cyberattack. June complete. strong IT also levels, say I'm normal very to are and process seeing happy recovery service are at to is back the TNT, operations after The we that

have increasing security, we expedite integration process. of to our reliability, portions investments improved our are improved our have and also we the We

successful our While the been far, of key restoring our customers confidence so in we efforts goal. is our full have

We the results on expect our the financial diminish fiscal impact half. in to cyberattack second of our

Our course our priority focus on hardening customers, our our environment. remains IT and customers' to service

Express FedEx TNT reaffirming. over the and remain which we key for of target $X.X operating FedEx income successful billion to now improvement are a 'XX Express billion results, FY integration The $X.X of 'XX FY driver

revenue Next, implementing from We're to the to conditions. income. in we FedEx business the benefit evolving Ground cost-cutting operating significant and address achieved growth measures are starting

pricing capacity reviewing are and plans We and expansion capital revenue quality to improving growth. volume long-term with balance

FedEx ever we the are best having at best at and add the service Ground. FedEx should I peak having ever are perspective, FedEx we Express a Freight. peak From

Bob in also FedEx are pleased there. Ground the Pittsburgh that We Henning joined has the team as CFO

with coupled Ground the FedEx immense finance strategic will for as course chart and we instrumental the industry knowledge the of team's in experience be Ground future. Bob's our trend operations

improve growth with strategies profitability efficiency. and And least, tremendous out FedEx certainly benefit finally, safety revenue not in investments but we last Freight and as stands to pricing disciplined from and

decade. to this years to this expect best for its continue segment and a one over look We of have in

of returns. goals, cash our global earnings, increasing With include flows portfolio, our our our we're confident increasing margins, to ability our which achieve and

And we it will answer and back to your turn I'll questions, that, submitted over with Mickey.

Okay.

questions from submitted Internet. have We the

the to we that a me few right answer. made, Mickey, directly came let a and were that as to people in in assigned of that came the list they Okay. we take a apply that of then remarks couple have questions meeting before

increase more So expense. Wolfe Group of Bank, Amit about Tom Mehrotra Alan's Wadewitz UBS of about Deutsche and Scott of TNT integration all the clarity would comments in like

So Alan?

million, I'll then the are we to answer is, yes. David of it start, the $XXX return concern additional I'll the clearly on get going over to the investment is turn Cunningham. If

in that of remarks. period the mentioned come earlier Somo will 'XX beyond as FY I my

passes. know $X.X in substantial will and you that billion tax that also quantified the law You significant structure that we new new amount will That should we're -- that a if and never $X.X on even our for line, below spending to billion. have tax with the the benefits the is be

the A decided and lot little So that the doing here. cyberattack, turning FedEx to hardening a Cunningham aggressively we're color and on much add right that. was where can think of more I'm a this result convinced and move thing to the Carter Rob we platforms, I David of

that in add to terms the of is a the just Alan, results just the to billion marketplace. I are said. generate spending billion $X.X lot that not going Well, additional beyond $X.X we mean, in to well you I would there's add convinced what

I'll speeding about the security up much the add more aggressive we've technology integration the posture, just cyberattack, improving of platforms. and on and the very The thing reliability of heels only become is concisely the

successful We've those, at the going on systems. fronts. stable very the we're three mentioned to and more enterprise Dave been aggressively but all FedEx moving TNT reliable

speaks] [what Rob was spoke just he - That obviously entering not he he there, CIO, all Okay. who said knows sure there. he but our that Carter, was I'm [ph].

we over Fargo, Ravi tax go EPS? flow of an next Troy it levels tax, and Wells much free will over Now as free cash proposed questions about about or cash Shanker, the on performance CapEx absolute three did basis your years, decline? flow as three resolution, Matt cash dollar flows CapEx. have the up

from in asked, remainder Bloomberg Klaskow recognize it will then finally, be similar free further tax 'XX?" of And Lee talk of will million about why flow… foreign FedEx credits last Intelligence, answer FY the $XX Alan, He the XQ? to and don't you in one cash that

tax are and Matt's do to point. anymore credits done Things to that questions plan can Ravi's recognize don't need this we change, year. We related. the Obviously, foreign for but this think I plan Okay. we've

I I've that the in several we last think the that that we on absolute of increase at likely an would our meetings basis. law, got expensing, if tax as with CapEx XXX% said new

important the would possibility of if that project that, most our there re-fleeting the we look the company and at. fleet that there's in One have return it's is we're things doing it's to out – we that highest something Express. accelerate And

define cash opening that I'm I how Ravi, way cash measure would And mention to make the comments, So flow. reduction not free plan but in did a additional in pension sure it, free you fund be my I we flow, that contributions.

about since color that as go won't CapEx. of hope said up that, much Although gives that. I people it EPS count optional, that as you what some you don't Having because I it's need. said the

Okay.

of big a growth cargo replacement are or Hoexter know like And aircraft Lynch is. the Merrill Cessna we and Ken in know airplanes about that new they feeder Becker of that the this some CapEx door airplane, large of XX-XXX Helane advance. aircraft submitted to like to how were ATR two the turn both. the Let's ordered, recent to questions or would would program the CXXX,

Cunningham? David So

of our a modernization. Difficulty] as part replacement [Technical fleet capital and

XX with XXXs cargo years and bulk-loaded. by XXXX cockpits, the is years of first large XX being which And we containerized are glass fleet These are when will others. door, XX also be are to the current aircraft they old deliveries. ATRs Our approaching versus modern and twin-engine than different take

to the creating the handle some this efficiency lot we're to we're creating a point. markets we opportunity handle aircraft of to smaller that in so also of able And been to but haven't product

excited very we're So about this.

are roughly of XX wide-body the year. XX is about talking to And are and one orders capital The XX. orders equivalent we're XX and aircraft XXXs, the that ATRs aircraft per The options.

ATRs, the year. of terms in per talking aircraft So talking we're XX aircraft year. about the per XXXs, X And we're about

questions next margins, also to handle make Ground in Ground Jairam Nathan see Helane Should sense e-commerce about Daiwa, do The does you it long-term the we are stronger-than-expected from invest expansion this how expect wanting Becker, FedEx another to to know, facilities? deliveries given growth continue capacity binge? of year?

I'm on we've not ever expansion. binged sure

I joke. And pretty they've well, increased it rates That's growth well-planned. surpassed a think CapEx, been expectations. as

those. to to So going of take I'm ask Henry both

for Thanks afternoon. the good questions. Yes,

the industry-leading Our investments continued factor our service and and capacity is a in the years at the we year, key growth. service, in busiest last reliable automation believe enabled our including of over have several times

we're begin will you to network back see expansion critical already we underway. capacity where dial us However, complete point projects a approaching transition certain as CapEx

productivity do still capacity. growing while of network e-commerce automation can improves technology efficiency, markets because we serving and this and And the utilization effectively

Ground. the Ground specific Wetherbee Citi. So What question margins take mid-teens? to we of have Christian improve financial steps and another you benefits can are to on

can kinds of But margins would plans with public. improve to we're general none willing of confident tax we the do to say all and Ground these the things, have we we so. just discuss be at I'll there,

to want pickup drop-off Fowler to percent savings delivery? range Raj, to Todd shipments you drop-off a the general home going currently? Ground a locations there and versus cost What that? Is of of take location KeyBanc. do on delivering for are

out delivering FedEx single the delivery imagine, you thank We cheaper the and packages break a multiple pickup far than operational Office. package Onsite But location question. cost is or for percentage Todd, of a FedEx or can Yes. a to don't for for you home. retail to as delivering volume

providing consumer the here key customers and our advantage the FedEx solution is we for But of is and that for the the for a ultimately the provide win-win-win FedEx. shipper, convenience Onsite real

example, the allayed is that piracy significant As a be porch can an concern service. by

you. very, Now usage have we as pleased locations, I with Onsite far. trends seen already, and than we mentioned more FedEx Thank so that have the we very are XX,XXX

TNT So from one for cyberattack. EPS Alan, got Citi about Wetherbee from here Chris Alan? the estimate the

the Chris, you it - question estimate had the asked $X.XX and to the a from second $X.XX but still quarter. a second in is year? good quarter quarters, first for We've the So about first dropped significantly

So worthy to I'm even half year. the discussing second be the of it's not of sure going us

can answer give you So this that's best point. at the I

of Morningstar. of So number now on and we have from a e-commerce Schoonmaker questions Amazon Keith

is of deliveries customers delivery beneficial Or detrimental and in-house their the the on stronger cost handling peak a it than deliveries? demand, stress capacity residential some to density Given demand from effect high of actually negative relief? is some the have take

question not with exactly will what We've the in think talked about and deal of sure the We're mind. that this it explanation me give XXX% have I how we yesterday. let question answer broad these you a but is, issues,

get on of number gone on balance into occasions, I've goals. effectively said we Raj, too commercial profitability and has our and a and one, a we're business as so residential Dave detail don't deliveries in Henry match far is Maier secret that the this, our out Bronczek's to, achieving and lot As of

those bow over we to lot are returns network. we And as our as improvements over and Now long-term has a improve wave going again, Alan expenses discussed, profitability. we expand to have put anticipate just substantial and to ground of and said

Inc. than And mean over seems say, someplace that rather one can on perhaps And can segment, I the the investments and knocking times, one some again of in term like FedEx to you some Ground, longer their we're this make FedEx Inc. so improve trying FedEx ball are is then by else park that, we we of or Inc. talk mentioned out of many the when Corporation, we profitability. about call things it Express, that over I've

and them opcos our portfolio deal or run returns all to every us make of quarter we we being as by a are solutions, long-term with maximize couldn't this not investment. of So

got to disciplined a of the commercial residential going you've to and the packages. So have mix back question, approach to

said investments Henry are profitable talked at can we've these that quite amounts automated in larger of Having made, that, rates we of about. because packages vastly the e-commerce that future confident handle we facilities the

two next hubs year substantial online These this coming after a basis. on profitable, have handle long-term traffic major more improvements and ability couple We that. to are of our type a to

The you missed other thing our during that mention customers massive I evaluations requires that seasons. is these to it often these business, industrial these the or would and in a to between comments about FedEx e-commerce the collaboration systems choreograph close peak

We with Dave will outstanding not successful. an of eating. Year's relationships you is prerequisite close the major business our pudding season. very next I a And planning in we proof think you having the investments Well, customers. because will and planning New And told or we're we begin literally the be this have that's customers. the close the peak of day for our after peak. in that's And with do the

far, And to but year a knock little so seem much, two had boy, is We've of right but planning planning, our some to wood. bit the want in facilities not I that great place. service been because reemphasize on sometimes this and miss long-term those points, the having of outstanding and it off we questions

can where who from, it. traffic a managing of coming residential have it's have major you got lot you mix. know so you your is secondarily, prepare e-commerce for to this close have And that collaboration customers third, it handle and And a with

miss So of lot points. for I those long but of the apologize answer key kind these questions a

competing So go-to-market business, your would then how Vernon impact -- Vernon shipping David that if strategy? starts for asked, Amazon

Raj about address don't I'm maybe wants sorry, this. But comment we hypotheticals. David. to Obviously,

I single customer that should add We'll has of to is can however, more noted than be FedEx all or that. a represents long-standing X% customer volume. say Amazon that that revenue FedEx. no Well, But just of it

how orders? Landry retailers handling on Allison to and about in And reverse Raj? plan addressable the to of returns So growth the capitalize for online capable does logistics. market FedEx this wants know opportunity? Are

Thank question, Yes. your you for Allison.

the to XX% about say amount that, of especially continues as scale of grow And purchased in consumer they for apparel have XX%. complexity the returns by all directly running at We estimated with roughly online - returned, are goods of are that retailers spending. impacted business and

Now uniquely because merchants provide success in we integration has FedEx customer have Chain some end-to-end exciting expectations, of positioned solutions for will provide most from and for we this our Supply robust new growing with the our and part, consumers. both the developments us that market existing very portfolio surpass here underway value

to addition preference. core emerge - returning online be continues in in-store and to all this, a Now buying consumer as

point As we talked like several drop-off to have provide a times, consumers network the for opportunity that an alliances, we Office and Walgreens, returns. a retail vast of convenient offer FedEx ideal

online a So Allison had with strategies? follow-on collaborate question. Do that successful have we traditional brick-and-mortar retailers

collaborate we in customers. about e-tailers. you that group. question right The with Colleran, deal and people want make to with pure there, big solutions your very yes Because We are And closely that? answer it's Don is our to comment time. do the that a

Sure, Fred.

very sit share month the is where XX wonderful to where those put approximately explaining surgical we top I think you XX operating the we down position terms companies and We It so together want of plans. and the resources. our did in customers specific job process. there's process a with a alignment very

that of the our the we our customers set of customers. operational with as well level year, excellence flawlessly do top experienced because playing that operating at we've as But the broader it's ongoing worked and is company this

where year time good feel the sit last about we So going we this of into the really week.

this part often as So the missed we a tax there in of expensing, anticipated, will in growth have the significant a couple and in the politics of involved GDP. that the other on questions is conversation and is CapEx works if here because bill be situation

for bill the that CapEx that and Well, tax Roundtable capital And membership anticipated making a employment. the expenditures, than any increase they did passing XX% that in would and they're BRT that Business this substantially XX% prior if pass it to not other reason their is employment anticipated increasing of the remember additional and did market growing. would survey it increase

except So the thing. market there's we increase you Alan so said, replacement net if if is forth. just as than get increase right In because be not your get value any that you the returns of earlier in in expensing, it you money a capital present flows the will and money more But of CapEx the capital cash of back. think place for other piece growing. it we and in, We make expenditures, willy-nilly one case interest increasing is for and because increase can

it money extent, would the tax we'll GDP if induced growth for forward spending in important we later. bringing increase the CapEx. is by and be is of part do It's rates rate that. And any that that which not which identify to CapEx So the the it

So on something Alan, here, the... you've got

Nothing. good. We're

there question some to a on Okay. Carter software... Rob was

This us update Yes, this is Amit redirect initiatives. from deployed? from on Carter. Please is Rob Bank. software be When SmartPost will Mehrotra address-matching Deutsche

already proximate SmartPost Ground and FedEx network. we moving taking deliveries at it's the is FedEx and capabilities into software paying and address-matching deployed, That even are big dividends Ground capabilities where

scale, So that experiencing we summer was at and the are deployed this benefits.

capability. probably customers next making to We time in available are also Hold year, our the SmartPost a planning at frame, Location on coming

Onsite to also you'd any network. shipments convenient, those be So our than redirect the able in XX,XXX more locations of to

Okay.

towards more So directly [ph] consumer, evolving broad buyer, your evolve? here's are merits attitude with What Hartford. retail transactions the a the network? a retail distribution and from marketplace to Ben linked question form FedEx marketplace customers, of is to How consumer drawbacks closer migrating

put with asking I ourselves. up our a is strongly that what think, not our you're marketplaces. and Well, we big there compete customers don't we have should believe customers, Ben, we why marketplace

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regard. our So that's policy in that

a There's focus Has Express' question China shifted FedEx of David Cunningham? all domestic about Schoonmaker deliveries. Morningstar. Keith the to import-export? nearly

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business and and the our domestic of with wholly is important proposition growing in a company value domestic only foreign part Our international We're China. owned an unique business.

integrated closely is our aligned business The import-export domestic is product great. doing that with and international

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e-commerce. Matthew secular FedEx here the international Goldman best need and investment Ruestle cross-border any, and make will opportunity. Sachs to opportunity Raj? what, about to of capture if question a there's wants to additional know So the

faster, thank question. market faster. XXXX, cross-border but roughly represents the growing XX% e-commerce significantly for Forrester, According you the X.X it's Matthew, roughly to the in e-commerce times total Yes. of

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read truck. new answer came would Mike the you Ducker, There's it? about question a Tesla who and from it

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whether know GDP rate the You internationally, want to growth the that company term. continue shipment achieve to will the our believes over of global longer

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you I misspoke think Dave, there.

cargo air forwarder. largest and the say express not largest company, to meant the You air air

yes. right, Right,

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and it customer be And have do What threat CIO, opportunity Rob will So Shanker, operations? around FedEx? you our logistics? in the you any think Carter, of new how impact or an work technology, will can that. that doing are Ravi from to answer blockchain integration

definitely that of Transportation and in in as Institute. were and custodial significant blockchain members well opportunity chain Research the Blockchain as a the We charter the are believe shipments. control we Ravi, represents Alliance in for Blockchain control supply chain

offers for believe settlement significant that payment the and the prominence us. we the the around overall of offer move to And forward, a as and going they enhancement global systems goods blockchain opportunity world systems

So I think the answer is yes.

autonomous So on and our specifically of our adoption here down subcontractor And it about such model, there's question view slow trucks. about technologies? another would electric

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different to fedex.com. you And efforts we're make on continue to of our report sustainability sustainability our lot I environment, and a the improve technologies that sure commend using

Scott persists? of balancing if volume Mike anticipate do and How has going yield questions, Schneeberger couple forward Oppenheimer a Freight you Freight. Ducker? about of environment So current in one demand FedEx

Yes, sir.

team FedEx for a First, a season, quarter And great peak question, let our too. me Scott. thank the and great Freight thank you for

current read, we've is As the strong. all environment

very place have processes We to in business balance volume and solid yield.

results quality a operations, It's QX, a revenue between marketing. including XX% improved of game pricing, really operating sales, the margin. team solutions, primary The driver higher the is in

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our continued drive 'XX. margin focus quality the on will and We through income rest expect operating that of improvement revenue

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type term? of growth growth Chain Could initiatives to in and longer Supply Henry. Scott for strategic for one's Schneeberger please discuss you anticipate Oppenheimer. accelerate this you So this discuss of FedEx what business

for opportunities growth We great across think the chain. supply several Scott. segments Thanks for there's and question,

retailers, For and to FedEx February Fulfillment small in brands. launched and example, medium-sized we help e-tailers

on supply warehousing FedEx fulfillment, can transportation and inventory reverse retailers e-tailers has focus of business so capabilities, chain. and Fulfillment and management many logistics, itself instead

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a Ross have David question Stifel. we of So from

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of beyond current in expand to pricing oversized Raj? percentage freight scope product Same further and this category? questioner. non-conveyable levels? there ground Is volumes are What

added volume capability the FedEx handle Brian. The at the is delivery handle and heavier non-conveyable we've network. of sortation we the XX% packages. Yes, larger, and oversized XX% to And package roughly to Ground these

the are handle can you have a imagine, such to very capability only in there players few marketplace the As traffic. who

trends monitor to pricing outstanding customers. and as that an can -- for we continue will adjust so we needed our ultimately, provide So and service

this just go And from Ross. can David Raj, you question into

the from make switch NMFC Freight down finally going January, outdated, will in [ph] of is dimensional Stifel. pricing? when to irrelevant Ross pricing the SmartPost David that Now away

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course, system, you is we based alternative class-based agree to that which frankly and dimensional much of the a density with offers more David, simplified outdated. So pricing

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sir. Yes, the question. thanks for Ken,

of charter As is you FedEx Americans the fact, member - a a in member, Coalition. know, Transportation we're Modern for

National really We retailers U.S. Commerce, including of Chamber diverse group the and Amazon, a shippers, the customers, others. have, among Federation, in that UPS, Retail of coalition,

to efficient. And we -- these they're more we because believe advocate that safer, for continue to

an fewer on driven get It load You infrastructure. million they're we've miles on XX% and an it. - improvement puts these on than more And the out of already trucks road. taxed X

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across go be hopefully, the to the moving continue package we focus the on line And So and reform and - it. will strongly considered. tax next infrastructure

in legislation. be will certainly promoting that We it

about Bronczek I Don customer basically and strategy. David question, you both throat told cut my -- Ken Hoexter this Merrill sales is from Lynch. from any our if answer of last BofA would the The Colleran question Ken. It's

many the just say industrial world in lots in business. we force I'll So and potential of sales new greatest have the the company

I'll Mickey. it back that, So turn with to over

participation to if release about you any second free quarter Investor call. conference for in you. FedEx. additional have FedEx Corporation's team Thank questions Thank call earnings Feel you the your on anyone Relations

concludes for your Thank call. you this conference so participation. today's And much

disconnect. You now may