Report: FedEx Says Customers Expect to Ship Fewer Holiday Packages

FedEx Ground reportedly expects to see lower package volume in the United States and Canada during the time leading up to the holidays.

The division, which handles most of FedEx Corp.’s eCommerce deliveries, told its delivery and trucking contractors that it will be lowering its forecasts after hearing from its customers that they expect to send fewer holiday packages this season, Reuters reported Friday (Oct. 7), citing a FedEx internal memo.

FedEx Ground’s new forecasts are to be released around Oct. 21, according to the report.

A FedEx spokesperson told PYMNTS via email: “As described in FedEx Corp.’s recent first quarter earnings release, weakening macroeconomic conditions are causing volume softness. We are constantly collaborating with customers on their projected shipping needs and making adjustments as necessary to ensure our network is prepared to deliver outstanding service for this year’s Peak season and beyond.”

This news comes two weeks after FedEx announced that it is cutting costs and raising prices in response to lower demand, and three weeks after it said it expects reduced demand for the remainder of fiscal year 2023, both internationally and in the U.S.

In its first-quarter earnings release, which was issued Sept. 22, the firm reported that its global package and freight volume dropped 11% year over year during the quarter ended Aug. 31.

Read more: FedEx: Deteriorating Economy Drove 11% Drop in Package, Freight Volume

“During the first quarter, manufacturing, global trade and consumer spending decelerated, particularly late in the quarter and certainly more than we anticipated,” FedEx Executive Vice President and Chief Customer Officer Brie Carere said Sept. 22 during the company’s earnings call.

A week before that, on Sept. 15, FedEx said in a press release that its revenue for the first fiscal quarter was below expectations due to declining package volumes moving around the world.

Also read: FedEx Closes Stores and Grounds Planes as eCommerce Volume Falls

As a result, the company said it would be cutting costs, freezing hiring, closing 90 offices and parking some cargo aircraft.