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FedEx Freight | More clips from earnings report

SwampRatt

SwampRatt

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Just a couple bits... Some we already knew. Maybe some you didn't.

Investor Relations | FedEx

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"In the fourth quarter of 2023, we announced one FedEx, a consolidation plan to bring FedEx Express, FedEx Ground Package System, Inc. (“FedEx Ground”), and FedEx Corporate Services, Inc. (“FedEx Services”) into Federal Express Corporation, becoming a single company operating a unified, fully integrated airground express network under the respected FedEx brand. FedEx Freight, Inc., a wholly owned subsidiary of FedEx Freight Corporation (“FedEx Freight”), will continue to provide less-than-truckload (“LTL”) freight transportation services as a stand-alone and separate company under Federal Express Corporation. The organizational redesign will be implemented in phases with the new legal structure complete by June 2024. One FedEx will help facilitate our DRIVE transformation program to improve long-term profitability, including Network 2.0.

FedEx is making progress with Network 2.0, as the company has implemented Network 2.0 optimization in more than 50 locations in the U.S. In some markets, contracted service providers will handle the pickup and delivery of FedEx Ground and FedEx Express packages. In others, pickup and delivery will be handled exclusively by employee couriers."

"We incurred costs associated with our business optimization activities of $114 million ($87 million, net of tax, or $0.35 per diluted share) in the three-month period ended February 29, 2024 and $364 million ($278 million, net of tax, or $1.10 per diluted share) in the nine-month period ended February 29, 2024. These costs were primarily related to professional services and severance."

SEVERANCE?
 
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"We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans, and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report."

NO "post retirement" healthcare plans for you at Freight

" In the first quarter of 2025 when the consolidation plan has been completed, we expect to begin reporting a new segment structure that will align with an updated management reporting structure and how management will evaluate performance and make resource allocation decisions under one FedEx."

"Service Provider Lawsuits. FedEx Ground is defending lawsuits in which it is alleged that FedEx Ground should be treated as a joint employer of drivers employed by service providers engaged by FedEx Ground. These cases are in varying stages of litigation..."
 
More on litigation:

"FedEx Services Employment Lawsuit. In May 2021, FedEx Services was named as a defendant in a lawsuit filed in the U.S. District Court for the Southern District of Texas related to the termination of a former FedEx Services employee. The complaint alleged race discrimination and retaliation for complaints of discrimination under Section 1981 of the Civil Rights Act of 1866 and Title VII of the Civil Rights Act of 1964. After trial, in October 2022, the jury found in favor of FedEx Services on the race discrimination claims but awarded the plaintiff compensatory damages of approximately $1.0 million for emotional distress and punitive damages of $365 million for the retaliation claims. The court entered final judgment in the amount of approximately $366 million. FedEx Services appealed the verdict to the U.S. Court of Appeals for the Fifth Circuit. FedEx Services argued on appeal that FedEx Services is entitled to judgment as a matter of law on the retaliation claims, plaintiff’s claims were not timely filed, punitive damages are not available as a matter of law and, if allowed, must be reduced to no greater than a single-digit multiple of the award for compensatory damages based on the United States Supreme Court’s ruling in State Farm v. Campbell, and the compensatory damages award must be reduced to conform with the evidence and the Fifth Circuit’s maximum recovery rule. FedEx Services argued in the alternative that a new trial should be granted.

In February 2024, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit reduced the $366 million judgment to approximately $250,000. In March 2024, the U.S. Court of Appeals for the Fifth Circuit unanimously denied plaintiff’s petition for rehearing. An immaterial loss accrual has been recorded in FedEx’s consolidated financial statements."



:smilie93c peelout:
 
Cont.

"FedEx Ground Negligence Lawsuit. In December 2022, FedEx Ground was named as a defendant in a lawsuit filed in Texas state court related to the alleged kidnapping and first-degree murder of a minor by a driver employed by a service provider engaged by FedEx Ground. The complaint alleges compensatory and punitive damages against FedEx Ground for negligent and gross negligent hiring and retention, as well as negligent entrustment. The service provider and driver are also named as defendants in the lawsuit. An immaterial loss accrual has been recorded in FedEx’s consolidated financial statements. It is reasonably possible that an additional material loss could be incurred. Given the early stage of the litigation, we cannot estimate the amount or range of such additional loss, if any."
 
Stock Repurchase:

"In December 2021, our Board of Directors authorized a stock repurchase program of up to $5 billion of FedEx common stock. As part of the repurchase program, we completed an accelerated share repurchase (“ASR”) agreement with a bank during the third quarter of 2024 to repurchase an aggregate of $1 billion of our common stock. During the nine months ended February 29, 2024, we repurchased 8.0 million shares of FedEx common stock under ASR agreements at an average price of $250.95 per share for a total of $2.0 billion. Share repurchases had a benefit of $0.09 per diluted share for the third quarter and $0.16 per diluted share for the nine months of 2024. As of February 29, 2024, $564 million remained available for repurchases under the 2021 stock repurchase authorization. In March 2024, our Board of Directors authorized a new stock repurchase program for additional repurchases of up to $5 billion. See Note 1 of the accompanying unaudited condensed consolidated financial statements, “Financial Condition – Liquidity and – Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” of this Form 10-Q for additional information."
 
Outlook

"In the remainder of 2024, we expect revenue will continue to be pressured by volatile macroeconomic conditions negatively affecting customer demand for our services and constraining yield growth. At FedEx Express, we expect a continued shift in service mix and lower international demand surcharges to negatively affect revenue and operating income in 2024."

"The current contract for FedEx Express to provide the U.S. Postal Service (“USPS”) transportation services within the United States expires on September 29, 2024. The parties are in negotiations for a new multi-year agreement for FedEx Express to provide airport-to-airport transportation services for the USPS within the United States. See “Item 1A. Risk Factors” for more information."
 
Almost zero mention of Freight, which could be good or bad. At any rate, Freight is an afterthought for them at best. I doubt they'll be much in the way of tech advancement for you guys.
 
No F-bdy Bs said:
Almost zero mention of Freight, which could be good or bad. At any rate, Freight is an afterthought for them at best. I doubt they'll be much in the way of tech advancement for you guys.
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Supposed to be getting new HHs that take the place of the ELD. It'll be a all-in-one deal like a few other LTLs.
 
Panhandler92 said:
Supposed to be getting new HHs that take the place of the ELD. It'll be a all-in-one deal like a few other LTLs.
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They're supposed to be moving from peoplenet to Motive, but the contracts haven't been finalized, last I heard. I was also told that they would be utilizing the same features they use from peoplenet so they're shouldn't be any cab facing cameras and no audio recording devices.

I was told this a month ago, so stuff is subject to change but that's what I've been told.
 
No F-bdy Bs said:
Almost zero mention of Freight, which could be good or bad. At any rate, Freight is an afterthought for them at best. I doubt they'll be much in the way of tech advancement for you guys.
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Most of the freight 2020 initiatives have been completed or are being morphed into another program. The most visible part, for us at least, is paperless dock movement for shipments and RFID. RFID hasn’t been enabled system wide and I know of two centers, one rebuilt and one given a massive upgrade, that did not include RFID in the ceiling. Most of the FXF2020 updates were in the back end computer technology. DRIVE and Network 2.0 will finish most of those initiatives even though we aren’t specifically mentioned in those plans. Stay tuned.
 
Streaker69 said:
They're supposed to be moving from peoplenet to Motive, but the contracts haven't been finalized, last I heard. I was also told that they would be utilizing the same features they use from peoplenet so they're shouldn't be any cab facing cameras and no audio recording devices.

I was told this a month ago, so stuff is subject to change but that's what I've been told.
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Motive has some new cameras that mount up on the mirror's facing back.
They can see what the driver is doing in the reflection.
My company just installed them. A very clear picture day or night all the way back.
They are also using them to see load securement and if your wearing your PPG.
The in cab camera has faces bothe ways and has a voice recorder.
How ever they clain the voice and driver facing camera they do not use. (Pay For )
 
SwampRatt said:
And of course, at some point Express tractor trailer drivers WILL dovetail into the Freight system. ONE FedEx.

:smilie93c peelout:
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That will be a mess, and I'd expect a lot of starvation.
Express Heavyweight drivers commonly cover a far larger area than Freight drivers. Extending well into the areas of other terminals. It's not uncommon for them to leave with 4 stops, do 400mi in a 9hr day. None of those stops being within the bounds of the respective Freight terminal. Those shipments will simply be put on returning road runs to their respective terminal, and ran by THAT terminal (is that making sense?)

At any rate, Freight absorbing Expresses's heavyweight won't make a blip on volume difference to any respective terminal outside of major areas like DFW and such. That in mind, I don't see them needing maybe 10% of the current Express heavyweight drivers to dovetail in.
 
No F-bdy Bs said:
That will be a mess, and I'd expect a lot of starvation.
Express Heavyweight drivers commonly cover a far larger area than Freight drivers. Extending well into the areas of other terminals. It's not uncommon for them to leave with 4 stops, do 400mi in a 9hr day. None of those stops being within the bounds of the respective Freight terminal. Those shipments will simply be put on returning road runs to their respective terminal, and ran by THAT terminal (is that making sense?)

At any rate, Freight absorbing Expresses's heavyweight won't make a blip on volume difference to any respective terminal outside of major areas like DFW and such. That in mind, I don't see them needing maybe 10% of the current Express heavyweight drivers to dovetail in.
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Talked to OM the other day. We are doing heavyweights currently. They pay in the thousands, but freight on makes hundreds on shipments.
 
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