The trade-related events of the company’s fourth quarter, which ended May 31, allowed FedEx to showcase the insights it can provide based on the data it collects from being at the center of a global trade ecosystem, FedEx President and CEO Raj Subramaniam said Tuesday (June 24) during the company’s quarterly earnings call.
“This uniquely positions us to be a valuable partner to our customers as they navigate shifting demand trends, evaluate the impact of tariffs on their businesses, and adjust their supply chains accordingly,” Subramaniam said.
FedEx adjusted its operations in response to changing trade policies by using its Tricolor network optimization initiative that is designed to enable it to respond to changes in the market, Subramaniam said.
For example, in response to shifts in trade flow, the company reduced capacity on its Asia-to-Americas lane by more than 35% in the first week of May compared to April, continued to adjust capacity during the month, and exited May with capacity reduced by 20%, Subramaniam said.
“Our Tricolor strategy enables us to adapt our own network faster than ever before as circumstances and the needs of our customers change, driving greater efficiency and a better customer experience,” Subramaniam said.
He added, “What’s truly remarkable is the significant way we have leveraged our technological capabilities and processes to navigate the complexities and operate more efficiently.”
During the company’s fourth quarter, FedEx saw its revenue increase 1% year over year and its adjusted operating income rise 8% as it continued the cost reduction effort it began in 2023, according to a Tuesday earnings release.
The company achieved its DRIVE program’s target of $4 billion of structural cost reductions over two years during the quarter, according to a presentation released Tuesday.
FedEx also reported in the presentation that its loyalty program for small and medium-sized businesses (SMBs), FedEx Rewards, saw growth in enrolled revenue during the past fiscal year, and that the company saw a lower churn rate among the program’s participants than among nonparticipants.
“I’m especially pleased with our revenue growth in the U.S., as the Rewards program enrollment increased 8% year over year,” Subramaniam said during the call. “The Rewards program creates a more seamless, personalized customer experience that drives customer loyalty.”
