- FedEx Corp (NYSE:FDX) said its second-quarter package volumes in the U.S. seem to be below its projections.
- Delivery firms like FedEx and United Parcel Service Inc (NYSE:UPS) experienced a spike in e-commerce volumes during the COVID-19 pandemic, Reuters reported.
- As the pandemic faded and as business and social restrictions lifted, the companies are left with excess delivery capacity as demand plunged.
- “In the U.S., you’re seeing again, as anticipated, a bit of a reset from the e-commerce boom and the volume surges that accompany that,” the report quoted FDX CFO Michael Lenz.
- “We projected to have lower volume in our fiscal first and second quarter already. It just came in lower than our initial projections were,” he added.
- In its Q1 report, FedEx outlined its cost-cut plan as demand trends reversed faster than expected.
- The company proposed cost cuts of up to $2.7 billion after taking a hit in its Q1 profit.
- The delivery giant also said it is scaling back on vendor headcount and has suspended many projects along with limiting flights to increase profitability.
- Price Action: FDX shares closed higher by 0.19% at $159.54 on Tuesday.
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