Dive Brief:
- FedEx is hiring hundreds of staff and investing in tech ahead of its spinoff planned for June 2026.
- FedEx now has 200 sales and support staff for its Freight spinoff, CFO John Dietrich said on a Sept. 18 earnings call. As of last December, there were 75 sales reps at Freight dedicated to large accounts.
- FedEx reported $41 million in Freight spinoff costs in its most recent quarter ending Aug. 31 as well as a $600 million adjustment to its accounting books for the LTL division.
Dive Insight:
The goal of the staffing additions, coupled with technology, is to improve the customer experience, Dietrich said on the call.
FedEx aims to have 400 sales specialists prior to the separation. As of last December, there were 75 sales reps at Freight dedicated to large accounts.
The staffing costs are just a small portion of the overall costs in the transition, according to Dietrich.
“There’s a significant amount of cost that’s incurred. It’s largely driven by the IT and the systems and enhancing the systems" to improve the customer experience, Dietrich said on the call.
The parcel giant declined to comment further on what those technology investments entailed when asked by Trucking Dive.
Meanwhile, the company reported a decline in Freight’s operating income of about 18% to $360 million for the quarter under generally accepted accounting principles.
Shipments have been down year over year for FedEx in recent quarters — similar to many other competitors.
But carriers say they’re positioning themselves to leverage their networks when the market turns.
“Weakness in the industrial economy and excess capacity in the truckload market continue to pressure our results,” Chief Customer Officer Brie Carere said on the earnings call. “As the industrial economy improves, Freight is poised for growth and margin expansion.”
