FedEx Corp. reported increases in operating income for its Ground and Freight divisions and a decrease for the Express division in the carrier’s fiscal 2024 second quarter, ended Nov. 30, 2023. Total operating income increased 17% to $1.4 billion, while total FedEx revenue declined 3% in Q2 to $22.2 billion.
478 retailers in the Top 1000 use FedEx for at least some of their fulfillment. The Top 1000 is Digital Commerce 360’s ranking of North America’s leading online retailers by web sales.
“With the rapid growth of ecommerce and as volume mix continues to shift to deferred, we recognize the need to reconfigure our network to focus on both speed and density,” said president and CEO Raj Subramaniam in an earnings call with investors.
Brie Carere, executive vice president and chief customer officer, announced in an earnings call with investors that FedEx is launching a new tracking application programming interface (API) in early 2024, without specifying when. The FedEx tracking API will provide ecommerce shippers and platforms with “best-in-class visibility for their customers, including a picture proof of delivery,” she said.
“This new for-a-fee offering is a significant enhancement for our retail customers as well as for those third-party ecommerce platforms that rely on our data as an integral part of their value proposition,” Carere said. “This is just one example of how we’re thinking about our digital capabilities to better serve our customers and generate profitable incremental revenue for FedEx.”
FedEx revenue in Q2 by delivery segment
FedEx Ground was the only division to increase revenue year over year in Q2. It grew to $8.6 billion in the quarter, up from $8.4 billion the previous year.
Meanwhile, FedEx Freight revenue decreased to $2.4 billion. That’s a 4% decrease from $2.5 billion in 2022 “as lower shipments offset an increase in yield,” Carere said.
FedEx Express, which has brought in the most revenue in both years, also had the biggest year-over-year differential. Its revenue dropped 6%, to $10.3 billion from $10.9 billion in the year-ago quarter.
Source: FedEx Corp. Investor Relations
FedEx package volume trends
Domestically, FedEx Express average daily package volume decreased year over year throughout each month of its fiscal Q2, following the same trend in the previous quarter. Total FedEx Express average daily packages were about 5.64 million in the quarter. That’s a 2% year-over-year decrease from 5.75 million. They’re also down 2% for the fiscal first half, to about 5.51 million from 5.63 million the prior year.
“Looking at the U.S., market conditions remained soft, with Q2 demand lower than we anticipated,” Carere said. “The industry has now experienced 10 consecutive quarters of decline in U.S. domestic average daily volume.”
The largest year-over-year decline in the company’s fiscal year so far was in June, when average daily package volume was 9% less than the prior year. Despite record Cyber 5 sales, FedEx Express package volume decreased 3% in November.
The same trend held true at different rates of decline for FedEx Freight package volume. However, the division’s package volume saw the smallest decline yet in fiscal 2024 — down 4% year over year. And despite year-over-year declines each month of the fiscal year, the decreases have become smaller each month.
The Ground division’s package volume grew year over year in September (3%) and October (1%), but held flat in November. FedEx Ground’s average daily packages reached about 9.56 million in Q2. That’s up 1% from 9.44 million. They also grew 1% in the fiscal first half, to about 9.31 million from 9.22 million.
Source: FedEx Corp. Investor Relations
FedEx earnings
For the fiscal second quarter ended Nov. 30, FedEx reported:
- Net income increased 17% to $1.4 billion.
- FedEx revenue declined 3% to $22.2 billion.
- FedEx Express’ average daily packages were about 5.64 million. That’s a 2% year-over-year decrease from 5.75 million.
- FedEx Ground’s average daily packages reached about 9.56 million. That’s up 1% from 9.44 million.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s FedEx update.
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