FedEx (FDX) 16 Mar 232023 Q3 Earnings call transcript

Good afternoon, and welcome to the FedEx Corporation Third Quarter Fiscal 2023 Earnings Call. Currently all callers have being placed in a listen-only mode. And following management’s prepared remarks the call will be opened up for your questions. [Operator Instructions] Please be advised that today’s call is being recorded.

I will now turn the call over to Mickey Foster, Vice President of Investor Relations at FedEx. you. Thank begin. may you Sir,

afternoon, and conference third earnings FedEx welcome to call. Corporation’s quarter Good

quarter XX-Q for and The are release, slides our earnings third Form replay the year. website are streamed and fedex.com. website, slides where on be and at This one accompanying call available the will being from about our book stat

members us Joining the of on the call media. today are

would callers in accommodate session, question-and-answer will to who order all allow our to question be During one to to us those like participate. limited

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

additional please filings these relations fedex.com. our of refer Please our to factors, the portion to refer on the SEC. and website with releases at press For information investor

GAAP reconciliation the measures call financial For most the discussed this directly on of a non-GAAP comparable measures. to

in are on We New Update a hosting April DRIVE meeting City York Xth.

received If or email you the please invitation, team. yet have me Investor not call your or Relations anyone on

able the in meeting attend person, not will to webcast. who also meeting are be For those this

the share Raj today Officer. on Vice the Customer President on us President, and quarter. views Executive will are CFO; his now call President Carere, and Lenz, Raj And CEO; Brie Joining Vice Subramaniam, Mike and Executive Chief

and team, our environment. work quarter what hard the States. disruptions expectations our throughout delivered third following of demand were afternoon, Good earnings peak, despite Thanks weather everyone. the United across team service significant challenged of the remains outstanding in ahead The the to FedEx

to realign quarter FedEx we our the on urgency third moved fundamental cost our reflect results as our transformation of with structure. Importantly, also continued progress

offset of reduction but supported pressures where impact the came Express. in the to below business. at both expansion and be and below yet margin actions Express cost at we ground exists continued this know in freight, need they at Our fully have not potential Results

to cost taking there’s be committed expense of further we air addressing readjustment in need Because including magnitude a pronounced and to high coming adjustments. of imbalances, our the months, changes, planning lag more We’re are these air timing a will we of service network the actions of the levels, the across our and maintain continued in network.

see to quarter. the We progress sequential expect fourth in

traction fiscal translates Overall, efforts And ‘XX. our gaining earnings efficiency are I’m pleased year ahead outlook improved an for this of schedule. into that

Now offset for Express yields by a Domestic year-over-year decline. turning declined higher revenue across to Freight. low and all X percentage by Volumes of digit U.S. the double segments a snapshot partially led Ground, at This slide quarter. a to

fell revenue at most across all While segments, was decrease Express. pronounced the

volume lower of these Adjusted are we at from cost operating declined inflation. what through fundamental by expectation volume Last also was quarter, and and I’m the what tangible results offset FedEx softness transformation signs embedded yields day higher But every is our continued and for margins as reduction happening and seeing in shared year-over-year partially firsthand EPS DRIVE. actions. pressures

We more a to are and and base efficient right sizing creating our realities today’s match cost network. agile

more will are in come. which the and we simultaneously efficiently, cost, our create profitably, our on out taking simply business years flexibly value stockholders for significant focused running to not We’re

we’re The has seeing in progress taken mitigated actions address I’m ground. with team particularly to has effectively aggressive and its pressures. cost the pleased structure volume

were associated to purchase manage benefits was expenses, transportation expenses transfers Combined, Ground levels in staffing at X% drivers resulted and costs. key year-over-year. -- reduced these the of which ability and One the salaries, down

volume $XXX our and continued X%, million points was of total to expenses continued in compared aggregate, declines, for combined Ground despite time to XXX year initiatives revenue deliver operating were fiscal improved peak with X.XX up year-over-year days When down and these in operating X XXXX. Despite approximately year-over-year. customers cost to the days, an led during its transit environment, average package focus total that quality, XX% X.X% in modest increase per In operating year-over-year. XX% margin of of with dynamic income on a basis

managing Freight to regard. continues cost this illustrated actions revenue execute to cost team also of has The commitment growth, profitable volumes. in and disciplined quality reduction

the and limiting Beyond team day-to-day hiring with reduce size future to levels. furloughing staffing parking to selling volume maintenance of management is right temporarily costs. employees team and variable and equipment Freight The also fleet costs, the match is

this from Ground them learnings in relevant supporting the the taking expense at Freight was proven implementing down points model Freight operating and X%, basis at and Express. We’re quarter. Total of expansion XXX margin both

cost our service the compromise team. Importantly, initiatives consistent did by not Freight the levels delivered outstanding

X. slide to Turning

with progress network billion in cost significant costs third out taking the $X.X in of made have quarter. We in our savings year-over-year

generate track We costs remain focused of plan. permanent taking this highly on and are relative savings $X of to to permanent system the billion on out fiscal year

announced streamlined reduce structure team reporting we that director a and the by more XX%. will officer than our month, size Last of

the to including U.S. By headcount fiscal XX,XXX year, year-over-year. align headcount roughly We down underway. to end be to attrition our this changes the with will network continue aggressively of expect we manage teams

cost Express Express to additional conditions. address taking and At demand to base to we’re adjust fixed our in time network our the requires constrained expense vast is steps Therefore, changing complex is where structure. and short-term,

X%. benefit This flight reduced quarter, we and and hours by X% by salary expenses

aircraft, downgauged parked also improvements. nine productivity an on various implemented and We certain routes additional

of result As was This half. adjusted actions, improvement the revenue versus XX% first of declines basis. significant total we mitigated on these a an

February. and Domestic U.S. and of improves change the efficiency. dispatch Within daily single we implemented delivery Express, domestic removes routes, pickup hub a ramp couriers This in

will up XXXX. achieve fiscal expect to savings in in about and savings We million annual QX million $XX by this $XXX about ramp

reductions with will This to flight total expenses support Express. quarter in total and double fourth the hours by expected in further year-end. down be mid digit accelerate to reductions high progress expect at to We single year-over-year FTE digits

quarter. the continued single we improvement for park fourth plan sequential aircraft also digits mid discipline, additional quarter. margin With We the the operating in fourth to in cost temporarily anticipate

challenging revenue the profitability of environment at persists least headwinds XX% the fourth we’re expect facing compared in related improved the the be mitigate QX, demand Express. to supports we to in to able Assuming at quarter third. This

We at will build profitability Express. from here

in DRIVE, to detail, more into we program nimble, on provide the a update efficient transformation Before quick results create dive more profitable support the to our FedEx. and financial I’ll a

pleased XXXX. billion reduce X.X. identifying by plans has reduction of developed track our the on make $X permanent the I’m cost the team One phase in X, with that progress will this but and flexible effort, currently costs steps, MD-XXs. to very is of not on reconfigure to are deliver actions air made our many We network slide of end agile execute shown out fiscal as our fleet as being more requires Network including network. to part only we of This

network modernization ground XXXs are our aircraft requiring more affords the while and program enabling reconfigure us our of we we and more to into the leaning flex Our XXXs use transportation quickly. us more, operate collaboratively, less as CapEx plans. ability And to

the This coming directly for improvement years. goal ROIC in supports our meaningful

improve to the more taking information our the on model share at actions to performance, focus to along program about DRIVE excited will April better on we update on with impact help our Xth. are our we additional the strategy progress. We’re you There,

Brie? me Customer strategy our and turn in over Chief who let detail. commercial Carere, it our discuss more Now, to will Brie Officer, market trends

good afternoon, and Raj, everyone. you, Thank

half As of expected, our team the quarter we operating challenging. we environment started year in the the but our persisted, trends The delivered for some to and see through the third first excellence moderation, remains saw customers. importantly,

decline significantly yield down increase large peak offset by revenue The by X%. and Ground, FedEx driven product percentage a mix, was surcharges. package fuel volume At was better and double-digit

rate results the January, from this capture very past are a We maintained increase global pleased implementation our rate. high of has very which the with

on At down enabled team’s offset was execution and share The volume quality profitable the FedEx decline actions to throughout us Freight, XX% revenue quarter. revenue continued X%.

strong, expect across market we and industry pricing to the remain the Importantly, rational. discipline is LTL

Revenue down year-over-year, in and to at and yield primarily volumes softness X% FedEx due globally Express was Asia lower Europe.

seeing execution do as sales year our the maintaining ‘XX. at a to team more but building they we’re levels has improved been healthy levels improved pipeline. work with since service There’s operational is fiscal Europe, momentum have while best the In service

Our pipeline week this per and highest levels their at are higher contracts than are signed percentage our and in at fiscal QX. closes double-digit they were a year

us for bundle Additionally, customers having market. differentiates the the and our parcel rest Europe of from freight in a

to volumes deferred in international out increased In priority given economy softer of will resulting help market’s shift the market yields of The stabilize this May service demand Asia, lower rebalancing, demand our our reopening for Asia, services. and services. is

to now XX. Moving slide

normalize pressured Express expected, by comparisons has softening. Europe fuel shift. customer and Domestic with Asia, segments primarily also international Ground U.S. we’re both share FedEx driven FedEx Ground and demand team’s also growth and ability as year-over-year As yield across turned the headwinds, pleased with Freight. market increasingly been margin yield FedEx Express, negative, manage and decelerated. Freight at to volume, Despite growth surcharge

Looking yield ahead, for quarter. we remain prudent expectations in the fourth in our

is at Service for Turning FedEx. to top us of mind slide always XX.

Our pre-pandemic team levels. achieving delivered service Ground busy FedEx by peak another highlighted season

Ground In in our fact, than more days nearest delivers FedEx competitor’s service. across two board, or one to locations the ground

and service are levels at improved to approaching quickly pre-pandemic share like service would peak significantly Express, over also I making ‘XX progress levels. fiscal where we’re

great this action While we’re do, -- enhance we have to taking service. making know to meaningful we continuously progress, is more and our

past while efficient For have our testament routing, example, the service. These service a Europe, Duiven, enabled our ability our we have team’s and road we our of outstanding reopening a in are improvements capacity, hub expanded change this we business. deliver to to more Netherlands improved with October,

peak, experience. Coming to and out response for are new market’s sales momentum improve Jill I or very has pleased translated that further with into of good team. enhanced service several offerings customer the our also improvement

more FedEx First, been fully shipping to Manager Ship modernized customers. the has our of to efficient, use make personal highly and all easier for online

has migrate Ship shippers Manager, of and cater appreciate and plan that the to new Customer is it. FedEx parcel we’re customers the can before the all they and small experience primary we Manager of peak. this with more the the XX% they for fits customers next finding to very business to engage customers, Ship working tool positive, interface Our that more business. their prefer way feedback been

around picture and post making It great Benefits launched of need, disputes driving has confidence of fewer we key include season, with delivery market service calls fewer from Next, delivery. a us customer customer ahead deliveries. fulfilled of launch to delivery the proof first proof package this this successful capability. peak

feature. of winning business are because We this new unique

individual on also dynamic peak factor, detection In based team. enabled will residential fiscal continued Dataworks million build the customers’ anomaly with our profit. to improve delivering peaking our year, In have infrastructure dynamic weekly revenue holiday peak, in predictive pricing $XXX capability to adjust quality. We coming surcharges out our pricing dynamically our

us already when customers. built helps have we instances our have We overbilled that identify infrastructure

will use same we manage to Now, performance those compliance. and contract capabilities customer better

customers we their for January, teams window time great XX rolled customer in package in creating solutions, these delivery. Finally, new countries, the with experience. are innovative a our four-hour visibility overall value delivering out insights enhancing providing By

financials Now, the more turn discuss I will it to detail. Mike over to in

Brie. Thank you,

with Starting volumes with our expectations as to ahead We global delivered our performance pressure. our team under remain third the moved lower our with costs as in quarter. urgency of earnings align revenue

growth was transportation supported operating increased These offset infrastructure by expansion package were margin operating X.X%. and expanded XX% income partially previously by basis operating costs points to the to and other committed reduction yield XXX to projects At segments. increased Ground, related and lower cost higher both, expenses. volume, actions. factors Margin XX% of Turning

costs well gain basis a per XX% team’s revenue managing the partially XX%, and offset income sale by on facility expanded as on up operating points. increased focus This driven And margins shipment, by profitability shipments. a and Freight, XXX drove was quality decreased as at better and revenue as

to Volume and to grew income pressures Express, due were package results Revenue XX% X% yields. as continue be per package partially driving inflected we volume the negatively Express, to operating lagged base and and see improved offset sequential rates, export, third declined quarter, XX% improved profit decelerated international in due primarily partially taking At fuel by cost by the margin we lower reductions in surcharges exchange profitability. driven pressured, actions increasing pressure Adjusted in to quarter. is team improvement impacts. on the are our on offset declines. rate by volumes higher our our and profitability. year-over-year, acutely expect operating in performance Despite Yield focused fourth growth

XX shows are categories. we quarter. throughout color the in our outlook, To our what monthly volume and on product declines demand for trailing trends provide major planning additional recent slide for continued Volume trends

Priority International somewhat Domestic While U.S. on still negative, sequential a into and February trends basis. Package improved Ground Express,

As the Express volume in Yield look expect normalize softer as and will at to Ground we onset demand comparisons moderating quarter, we and customer prominently year-over-year of volumes. as to be the pressured declines fourth continue growth fuel Asia. we lap shifts, most surcharge

Moving XX. to slide

efficient wavered. focus capital Our on allocation responsible not and has

We at levels down of CapEx of is revenue, FedEx. capital By at are intensity our in was to era lower. lower fiscal X.X% historical be an of our roughly fiscal year ‘XX, commitment year, from X.X% or X%. Last

in our year approximately year is million for account a $XXX the billion, which fiscal spend from ‘XX the to As we demand forecast reduced mentioned to plans I December, for initial environment. reduction lower capital $X.X

and for of improving slowing improvements. expect as line In capital percentage revenue. aircraft down the and roughly with moderated our flat this ROIC utilization planning spend be drive fiscal fiscal to capacity deferring in XXXX are approach, XXXX versus We a pace to be we and prudently investment fleet projects, of

to Turning liquidity.

generate ‘XX, position cash cash strategy. quarter committed We stockholders. the capital as flows, we $X.X to long-term our strength. which our year source continue cash return our our transform return to remains $X.X on solid fiscal billion will and stockholders remain Our rewarding a business billion strategy. execute to with we In We ended in our and supports of

reinvest our allocation and FedEx and creating for today In reducing summary, stockholders continuing our while tomorrow. capital for commitment to capital value to strategy intensity reflects in

the In we negatively continue profit. XXXX, operating XX. revenue to market of Turning expect quarter and to to fourth conditions slide impact

year. on sequential seasonal to historical quarter results fourth a we representing the However, basis, the FedEx’s watermark expect follow our pattern, on high

declines previously to and execute in the cost identify volume will identified results. operating order on impact opportunities actions of the costs our We mitigate continue to to additional on reduce

sort to demand other of Sunday taking actions reducing closing including at these line-haul expense operations, reductions, hours levels, operations part manage capacity As we further flight certain at reducing lower and will Express Ground. and

vendor We reduce reducing and shared technology operations are executing utilization, actions at targeted same-day Office. deferring expenses, FedEx discontinuing and certain to overhead city allocated projects

officer announced we headcount for diluted global In Putting to $XX.XX elimination earnings of savings to and $XX.XX certain to and achieve the we is together, attrition updated positions, February. full expectation addition, related per these share. further in our adjusted director expect factors which year

it that, with And open questions. let’s up for

Hoexter America. our of of take first We’ll Instructions] [Operator question from Ken Bank

about on Great. some pulling the Mike afternoon. sequential of Good maybe forward. improvement. talk Hey. great Maybe job Raj, costs And or that a little bit

mean, you You’re I fourth talking the you improvement, about And improvement seasonal seasonal have normally normally quarter. a you’d that. mentioned that in but Mike, have

impact and we quarter? that cost you trying walk the given you for expectation, between some see of to those kind the expectation I’m So, into detailed pull and a of third are the muting are quarter fiscal through you forward pullouts that fourth can or ramping cost what normally additional understand, maybe than fourth would the If quarter.

Ken. Thanks, Sure.

lower the cost highlighted, of that Brie for traction just we further emphasis initiatives. and the fourth a demand, continue to project on quarter, heightens level the as of So,

performance had we given an there. exceptional well, lastly, this last quarter. and anticipating initiatives realized we’ve not projecting that So greater Freight, volume At we’ll the drive magnitude particular, we projection at the year, expect not the improvement Express, Ground, as will term the at savings in quarter the then, that but in realize also same mid-single-digit but year we that upon near in third declines Ground, expect we’re from building margin quarter margin and we that -- the we’re to there. And strong fourth highlighted, fourth

there thinking ahead. in So it hopefully, context further for that you puts

question next our of take Chris from Wetherbee Citigroup. We’ll

Express on fiscal picking back up just commentary Maybe for XQ. the

think high put mid- probably So, single-digit of us total in I for flattish kind year-over-year to decline expenses Express would sequentially.

sort of So, little us revenue maybe could bit just dynamic. with you help a the

on us you’ve think little about think, but maybe you how challenging the a went it’s the talked to a Any thoughts environment, of I bit on triangulate to given fourth to with third moderating still Mike, side revenue trying numbers declines through volume quarter? some I you there. the -- quarter. as about know the

From the perspective, QX is help, It’s a to decline in we Brie. decline Happy Sure. anticipate what that get will volume Chris. less. seeing

international from about, will to actually, up volumes we’re about open QX. sequentially, to improve trend the we’re U.S., So think continue is economy. we into Express, will And international QX as thinking the in from as talked that That well. also but when we QX perspective, going an here

year-over-year. think decline I decline about helps, again, over do the hope well we So, that talking that will as over QX And that Chris. I QX am volume moderate QX. as QX

Jack Our next Atkins from is of Stephens. question

I forward, way billion there’s levers up of us to uncertainty And perspective. maybe able implemented out as you the DRIVE from costs to in initiatives you about sort further think you of if the have of the see so savings in $X be demand of a much frame can Are then, a how out far of any start environment? business more there macro guess, we to a there -- think as pull here, terms actions. deterioration So prepared we guess, been of I to is that take lot help in the those obviously,

this Mike. is Okay. Jack,

the of efficient DRIVE business we running think operation the how approach and as a So, board. and framework across more about the flexible

anticipated initiatives, the structural So the quicker and into has move here in cost of billion within also of is that $X coming quarter foundational that terms to to we’ve identified. than that reductions enabled we our us cost

cost think So, irrespective environment. structural demand the reductions, the that’s you operative of about if

So assets with the that moving as resources. of traffic think less and same

domains progress Xth. the on and DRIVE updates further giving to the forward details various April look on we within So, of

Alliger Goldman Sachs. of question next from Our Jordan is

the the if of sort balance color give takeout of wondering a for little on year. you could was the more cost I

it I billion. think the around slides had at $X.X

I And way update the there takeout, billion, get attributable being permanent how that? is business a billion maybe Can permanent the the sense $X.X some side? permanent. total in for cost is you much something to far be think give least $X Express can to Thanks. like -- of so with around terms maybe a the at

okay, here. $X realize Raj particularly that we we Express, on that year. permanent alluded flight we this more -- reducing. frequencies that bulk of The that, billion will -- at is see of in and Jordan, been the the we’ve QX will to, the So traction yes, will We’ve highlighted that

we We we’re nine Raj quarter, as and the had during said, parked have quarter. -- we had six aircraft to fourth during -- more the more third park projecting

So, that we the there. of is that in And that out up. takedowns picking also illustrative and don’t underway $X taking component initiatives then of billion, and was anticipate the another projects reductions investments and

next of is Tom Our UBS. from question Wadewitz

And the on Yes. right? through It’s see coming side, strong the to execution cost also it numbers. good

were shortages the given much a factor Ground but your had of so the levers into in biggest the drivers was like you a us labor a both Thank side, then the was -- of what dig seems improvement the -- was transportation really and On ago as the year just what within bit we Presumably, about could talking and or on well? adequate that How quarter, purchase information then, things It it And most were I Ground factor. the you. comp And important while think labor. quite a a good wondered sorts were being in back, improvement. and you -- those? you’ve know a down bit. purchase if I of call, further benefits

because that. year that there very in with circumstances the the indeed it last Yes, market Tom, directly labor hit in was challenging of you case was the terms it very

third I down an following of would Ground highlight flexing peak that extraordinary there. did quarter So, in resources the certainly job

pickup multiple definitely in there. was given operation the dynamic as ground and facilities, of element within highlighted So, be quarter. the a the the there delivery. in as docks you and key of well that of the the a line dimensions that as won’t within third improvement But quarter, network tailwind That efficiency across fourth the again, haul big the

So again, and more progress there, to good come.

is Jon from of ISI. Evercore question Our Chappell next

the a in a have cost but to levels how tailwind, time focus issues? just And on back for of lack the down about Brie, do two on reasons, this because surprising. of amid levels volume density hitting lot days maintain bit obvious all have you there’s volume to cuts to of back structure, the these network the cost getting the transit forward? some Is think is service service some levels, of ability to a that macro to new cost these going the pre-pandemic

question, actually I we don’t the for Jon. is do This think Thanks back it’s Yes. getting to best. surprising. what

moves historically when productivity. and been We known most we with know is And our for for experience Service service. running, our network customer have it’s the productive. actually

So, absolutely really sustainable. about to perspective. service is a we’re fact, feel do to that I good And continue better going in it think I it. from

what bit I we loving would is what them. momentum to it’s little And said good. really got giving a sales this So, the we we We’ve but This would we it that the is really is feels do. team do, think more do. knew work

So, that helps hope I clarify.

is question from Cowen. Becker next of TD Helane Our

one you. So, maybe, Brie, is this for

little price? or between gaining parse on what And than mouth. out to ability holding out you’re the But expected? the I uptake better can those bit it also maybe you out in improvement. the said fuel I you you’re you’re think that words your surcharges? Or making better in a talked about maybe than you I there something difference your what holding gaining raise think showing about would put maybe is actually the some thought progress costs you on and

surcharges maybe So, Thank if you. about of just price you could kind talk fuel there. versus

Yes, sure. Happy to clarify.

from we obviously, a pleased. very, very yield the increase, rate From general perspective, yield was strong. were capture a from QX a in saw we what So growth, really

capture certainly seen was it out ever Europe, I of in highest fact, coming have that In the Europe.

job. and that pricing team an outstanding the think just team global I So, global the sales doing are

we from GRI. about really the feel good execution So, the

perspective, growth moderate, job with fundamentals has but U.S. the QX aligning very The into right yield going see rational. As is team to an beyond, are a from cost. we we of done will The now, we forward pricing excellent market think stick. look and price

peak getting surcharges. more for We’re

package should. getting We’re surcharges large as we

we moderation really, So, hope of But, the increases. lapping growth in we’re did just high from job that I helps. good market capture yield rational. really course, QX will we next perspective. as think a a is We in see year

Our Oglenski is next question from Barclays. of Brandon

So, some Raj or Mike, you in this give outcomes I quarter. can us if was context around wondering Express

We’re we for out. throughout seeing year-on-year declines kind to margin you had even cost been though similar year, maybe the of where credit guys are incremental taking

So, else I volume Express, little know this bit similar but Ground I little a that holding guess, here, but is with were international better bit and I you. quarter, Freight attribute Thank to? looked what, guess, what especially back can softer yields you outcomes. a

thanks the for in at Express. It revenue was demand issue is highest The most Express impact. had Brandon, main question. the softness the pronounced

fixed cost down up You progress are going QX, In we making flat. also year-over-year, on know Express million was even costs the QX cost QX, has the was there. the and get better to cost $XXX year-over-year, are highest from is side. structure. the QX But

we’ve air, the about before. on progress making We’re talked as

launched the U.S. Express operation single We February. the have -- dispatch daily was in Domestic in

meeting. Xth flexible in don’t will if more network anything add when are to to full think…? a technology. for I you -- fundamentally that, that we You’ll the much supported you And talk April then, make to Mike, more know and QX. little the I at agile to of you we look And about by want this as see impact quarter ahead, we and the going bit that

No.

that covered. think I Thanks.

covers That Thank it. you.

Allison Poliniak Fargo. next of Wells is Our question from

I for an lane just want the lane, it’s ask important know to on you. I Trans-Pacific

from any you Are seeing moving? great. market are you’re all shift what concerns away dislocations, in on any you? Thanks. that of you would seeing Just color with the sort Just structural that be that

Yes. question. Great Hey.

we absolutely to with years. several a diversify lot chain supply over of They conversations customers. their the last are having So want

Mexico. primary Mexico, have it’s we’re out think value having important that we proposition I fantastic a remember of and is to the conversation about

want diversify, they do be. as customers So, we are to anywhere to need

any is change clear position So, good feel would want perspective, we that. not that From the that be But a I conversation. see really the about it world’s do do magnitude a shifts being large future manufacturer. we China of to short-term

don’t I future that I a that’s do it’s think an immediate think issue. issue. So,

Our next Credit Suisse. Ariel question is from of Rosa

wanted progress Hi. afternoon. the again, the congrats ask on about I savings And Express Good to margins. here on cost initiatives. Great. some of

just them that we obviously, they saw But likely this target you said ‘XX. to challenged to quarter, does volume depend What’s to in margins fiscal please? And achieving that? wanted maybe understand. a a volumes little improve fourth in the confidence stabilization level into seeing you I to the set bit extent that or X% a So X% this and of are what by going the on quarter. return some declines, sequentially for in

Sure, Ariel.

emphasis drive to improved on the improvement last months, X our initiatives cost realize that’s efficiency and So on invested capital. certainly, here returns and X as the environment heightened in to evolved has margin

And transport. to the structure the surface of the -- the fronts. a ground number air We initiatives so, us hours, flexing the DRIVE network, allow in of relentlessly enabling is pursue framework about these talked labor

lot very full of that the realize confident more forward. but go, can we’re Express going a again, to So progress, potential

from of Moore next Our Stephanie Jefferies. is question

transportation think, I employee to wanted dig certainly the maybe touch on and expectations you bit. salary on full purchase on, as down color down a to the more I what’s what in just wanted I in Express -- has mean and for certainly kind a clear progress little triangulate bit Ground going segment the of year? also is about provided benefits to the bit very to trying Ground raise and Q&A quite clearly but come to is segment you’ve bit, of the the I a and there. caused noted in just made quite a lot a today

third Ground and can Thanks. the at full quarter, detail the you year? little as in you a kind in at look strong your look the particularly original as So, the you more pinpoint of exceeded performance expectations bit what

again, with, fronts flexing peak. a Stephanie. Thanks, Okay. of the number Well, Sure. down hours was labor of side efficiency following it the

surge prior We peak. also this premium a for had to relative peak lower

broadly, as that. lower a assets in facilities and shut that in down. the We’ve in certain well. focus So, on a closed But those means the efficiently environment, that was that. demand utilizing We consideration smaller or transfer points more sorts

about So It’s And as Ground, no when facing on board. to well had the increased going at there’s not here network forward -- from a single progress again, impressive just headwind across opportunity linchpin we’ve very it’s the infrastructure everything. the look, that. it’s to we’re costs see top represents of much also there so optimizing that

is question Scott Group from next of Wolfe. Our

A of couple a clarify I want and question. just to then picture bigger things

‘XX? Mike, the $X to Your about billion was or What much year-over-year Ground -- come this how some of of year, next I how trying offset the much Was starting to DRIVE improvement -- seeing to back just of less how a sequential a And how think of this we is we savings year then, should that fiscal and And incremental QX. is picture. in in DRIVE? are all variable much reduction the understand then want or comment comment? So LTL that big bigger gain?

Okay, Scott.

yes, here the anticipate for roughly third then was was for $XX large Freight improvement the company as wouldn’t as realized be year-over-year first, quarter, So that facility we the Ground about sale And the gain fourth million for in reference quarter. what the for the the at to on we the it there.

two that’s freebies. So, the

mean, all on dollar areas. scrutiny. cost I adjusting Every we question, base holistically your look, are dimensions, is under all On other the

as and realizing across the a the and entails for DRIVE. that reductions structural traction then with both, of lean number adjustments you volume board, there see So, progress levels the we into in the lines, reduced gaining

to further updating are playing will you about we on we initiatives out how Xth. see look here April various when forward the So,

Brian is Morgan. from question next JP Our Ossenbeck of

So, to something of the Can or similar just worth if then set weather, here, know expectations, that was Express to you large could. Mike. don’t quantify one if maybe I come impact And DRIVE quantifying. back given time, level more performed? you how just

past, or think, at gotten talked I metrics a I in details not much the and how lot think we’ve streams. really granular about get you’ve least the consistently. to we’re that that and going don’t more work Raj,

benchmarks should we Are should that’s roll regular here So, that a the updated how various to how thinking we of couple weeks? And through a that are Thank segments streams? of you where we to now about in going see in the and different terms basis? expect coming be work up out get in going you. to on

Okay.

First, roughly was $XX Brian, headwind. weather million about a year-over-year

if you that. around put to dimensions some So, want

wants Raj expect think DRIVE to at to I Day. highlight here what

just say Well, this let me much.

here. to rigor, and you I’m I working. with just applied program to sense discipline just The with of at as couple the to is them and lot a creates more of rigor DRIVE thrilled weeks the a delighted has forward progress with work this the hand team showcasing what urgency look -- the is and team think the in and I’m just

way better During give our it We’ll you to dive will And expect you metrics to for you you, underway that FedEx. transformation fundamental onto business. Thank that -- deeper the think think tracking. we’ve slide. this much you And which I update, that can it’s the identified, a on at the a we show is I have Brian. domains will shown been that be understand

question is next Majors of Susquehanna. Our from Bascome

You onetime how the EPS of the flow rolling months for you. in just initiatives you in out little in ‘XX? of the much quarters cash of business? left fiscal seeing first raised with free generated three Thank a flow take Can fully outlook structural on out to do And out fiscal about $X that you’re you going the cash GAAP X.X the free a on that about burdened come cash where you think to basis. talk you’re of drag in bit year, a some year the do costs billion a to you’re costs for basis related qualify maybe think with

Okay. Bascome, it’s Mike.

yes, going you’ll continued amidst flow free on cash heightens capital generate efficiency. And across that the our So business which environment, solid emphasis we’ve forward to challenged board. even the see

cost... onetime the your part the Oh, what sorry, was last Sorry, of question?

flow be. Yes. On free cash could what

identified Yes. $XXX year-to-date. expenses that million had quarter. we for optimization That’s third The million the and were the we $XXX business that about

is question of from Stifel. next Chan Our Bruce

I’m congratulations, capture Hey. GRI Europe. wanted about guess, maybe the give your something it on or maybe just a the the I little in Thanks network for higher of integrated on having a fully us that by everyone. up driving to just Can demand Brie, you the GRI follow environment. capture? softer what’s I surprised comments time. just given else? the maybe now sense Is And that

Yes. are and Hey. that There with very with everybody social freight our real customer stickiness It’s and European our very the -- a or solution-oriented And an team Europe. personalized selling. I sales remind very From a in have service a unique value perspective, job the fair parcel and bundle. to question. do do it’s incredible proposition think also, we important

So, I do honestly, go some ability got for that the emphasizes is profitable the bundle. profitable opportunity base the sticky. is share. get that customer an in share it and GRI opportunity customer loyalty the Europe. have They take But think more really we base capture to We’ve to to that there, take that in value

Vernon of question Bernstein. is David next Our from

you Raj like couple weeks. I’d you mentioned Good the I’d intention ask or Hey. strategy afternoon. seeing little Look MD-XXs. forward. in to Mike, to about a park fleet the more forward to to you know talk a guys bit talk I like to of going the --

we CapEx I need going this from often some trunk were is way now. design, just get which underwrite Thank going replace We’re that you. have? an Aren’t question the the big how find we to run aircraft? to forward? do to answer in kind XX they aircraft and lower to for right sense to those investors, how aircraft volume you XXX get a would fleet If running trying just fleet new guys I’m of of

David. you, Thank

more and Our been fleet strategy allowed build modernization agile us flexible has that fleet. underway we’ve a to

see in coming we here, or we we And through. environment look a see high fleet. now the come demand we to And MD-XX don’t so, demand going the flex the demand as demand to high at fork a are that environment, was that And road a environment? low

planning to so we’ll predominant entire So, finalized those on is the right-size this our QX, fleet, opportunities needs and the at as plans we look are cycle here. as you happens update fleets over

Our is Deutsche Mehrotra of Bank. Amit next question from

clue ask as the range high coming been years, back couple outcomes is us don’t any reported. stays I kind Mike, low I of macro just about wanted about in at way bit margins year? X.X%; and that. where just business. as biggest which help a next year. because And you of really recovery And just the of a look it margins next over of be X.X%, I the the to question as if as Express right last it’s what little your to it’s kind was what’s hoping been on If have to I today margins it think you can Express And could it’s think Express

related one -- Investor do criticisms lot the of bottom-up Q&A how was to And the really say, the detail I have the of to of around then of, the wasn’t strategy, the Day kind that, pathway improvement. the a from cadence didn’t

plan accountable you everybody the as about incorporated be held division guys present can by think of each improvement can margin a you is -- Thank as stands in So, you. for so DRIVE Day Day, DRIVE when cadence it? it we

of address me the let that. Matt, Sure. aspects

the that framework So the assigned have we there. that way to the domains are are individuals accountable realization those the identified is have XX first, of own that of each DRIVE with we and structured opportunities

But question have in of course, we definitely sub how and do there’s that multiple framework under of initiatives to the enable accountability, and have structure and the there’s Now, multiple is teams, that to place. that those outcomes. we measure

Express react about deployment is the profit various making primary so and agile, the can margin what focus question your of was Raj technology, volatility, our we with precisely a more business and more is that’s that to fleet more flexible flexible highlighting To make adjust.

and focused across build we that going we the need on from that forward, So, here, be relentlessly will that and certainly anticipate board. fully to realize

Our Shanker next Stanley. of Ravi is question from Morgan

of here. follow-ups couple A

with the on it it years? was run deal a the change treat it the a than a being or a actions if robust drive change helped you in this in kind quarter, peak guys Can market, of than I’m change the permanent is was time tactical the just third are ground obviously, the peak Just you every expected. the quarter these in of if understand in that even and trying the kind way or help higher season to, two of or margin sense last just more to less of Ground permanent way was very season? pivoted season permanent reaction us you you whether move it’s quickly get to peak a a way

that as uncertainty is this But said, it, too. immediate the demand adjusting that, the were availability adjusting in were I’d supports across higher rigor an it definitely year can’t profundity No. quite to themselves Brie skip efficient both we wage a terms the last diminished. of this running project a pandemic. cost changes service sometimes amidst of lot rigor and frankly, the and responding, Ravi, have customers Again, and ability -- of highlight our but in and of illustrates of the over rates environment, labor order. in the last quite levels unprecedented years, around were be we focus network discipline, and the volume discipline the to two in was terms And dynamics the our experienced increases had because at understand short Ground -- also board,

forward. So, it’s a that virtuous cycle we’ll there going build upon

Jeff is Kauffman, next Our Partners. question Vertical Research from

look wondering, a you’re oh, b, an they you a just shipping to available a didn’t problem capacity. talk a, told was some How year? for I as, in a we some Question to Could And you guys, short-term short-term them just I some at new get to were had be your may this to begun us customers you this be on and do they of network? the a these indicated for talking about action stay requiring at excess do. were thing; competitors if can it’s was over? guess, which at more we one bring that was saying, and it’s something there could some we and with use that there be about had coming look potential you hey, lack little come engaging to was of in Brie. Brie, make for Are could different a you or capacity out your to and I’m opportunity customers, concerned I of I I how a we at that levels to labor as normally had is of capacity than nervous. this shipping customers. Can certain

thanks Jeff, the question. Hey. for

and So is I foremost the that that and first we’ve momentum improve maintain primary is to goal created. think service our

in goal market there factor is as in so, think our And for might the that and exogenous them. that sure to make customers protect we’re any to our potential stress the about market, we put

So those really customers and to do available need and we would capacity been we them. the on have to contracts by We have of business, entertain are talk clear FedEx, of that, about yes, end course, that March. love good at business absolutely, board inquiring as we’d signed any to

We this are is like up factor. not going to or staff put peak a

come and partnerships long-term And to value the wants for We anybody proposition, XXst. are with customers. to going to FedEx to we’re to March happy plan prior that enjoy them talk

call… of the concludes question-and-answer This today’s portion

Thank you, operator.

Mr. Subramaniam. Please continue,

members the the FedEx only team once again in World’s closing, top Fortune of the In was to operator. delivery thank you, Most as XX Admired I want thank Companies. ranked company Well, our

world. recognition of XXth deliver our that Thank also anniversary next world’s next possible named one most We most commitment the excited to about earlier our ways were by celebrate and have much. you This XX the I’m the and And years. Ethisphere. would dedication been week without people the around this as of the very this month, not companies ethical as for continue we will team innovate

call FedEx earnings today’s quarter XXXX Corporation fiscal year webcast. concludes third This and

You wonderful may a have line disconnect this and your at day. time, now