FedEx Freight | Fedex Freight operating margin q1 2023

nasvegas

Well-Known Member
That's a perfect job description
You mean the guy that use to be the biggest complainer on Lou road board? Now he's a smart A know it all management lacky. That guy?
Had one dealing with him. He was in NAS for some reason. I was talking to my RDA and he kept butting in. I turned and looked at him and said. If I wanna talk to you I'll look at you. Otherwise rest your neck!
 

nasvegas

Well-Known Member
Had one ride with me once , talked on the phone , smoked cigs all day , completely useless . Dump them all if FDXF wants to start cutting costs .
Had one ride with me years ago. Back when the position was first created. Told me the day before he was going to ride with me. I limited my water intake that day.

We drove 300 miles without stopping. Then watched him do pee pee dance to bathroom. Got my hooks and told him let's go. He said NOPE! I'm riding back with someone else.

Never had anyone ride with me since.
 

GirthQuake

Serving America Safely
****, what else can they cut? The facilities are in shambles. Hell, they won't even buy brooms. No soap, no paper towels, sinks and toilets don't work.

To trim any more fat from Freight would require them to strip the tin off the roof, and sell at the scrapyard.
Don’t give them any more ideas lol
 

SwampRatt

Well-Known Member
Earnings call mentions the word "freight" a mere 10 times. That includes twice pertaining to Express (Air Freight - Express freight). 3 Mentions were in the form of a question during Q & A.

Brie Carere -- Executive Vice President and Chief Customer Officer:
"And at FedEx Freight, momentum continues to build. The Freight team delivered another strong quarter marked by 21% revenue growth. The team continues to drive disciplined execution, focused on revenue quality and profitable share growth. For the company overall, we continue to execute our revenue quality strategy and pursue business that provides attractive yields."

Mike Lenz -- Chief Financial Officer:
"Freight delivered another strong quarter with operating income increasing over 67% as the Freight team continues to execute. This was driven by yield management actions, including higher fuel surcharges. Yield, including the surcharges, grew 27%."

Ari Rosa -- Credit Suisse -- Analyst

"Great. Thanks. So, Raj, as I look at FedEx Freight, it's now producing almost four times the operating income of Express. Just could you talk maybe about how you think about the sustainability of the performance on the Freight side, particularly as we head into a potential downturn? And then to what extent, if we see some of the strength at Freight starting to wane, is it possible that starts to eat into some of the gains that you might see from cost savings at the other units?"

Raj Subramaniam -- President and Chief Executive Officer

"Yeah. Thank you, Ari, for that question. First of all, let me just say, our FedEx Freight team has done -- continue to do a phenomenal job of both managing revenue quality and our operating efficiency to generate fantastic results. And they also form a great piece of our portfolio and also provide synergies on the cost side.

The point that you made is important because -- but we have -- when there's a significant change, when we went to our last downturn, that we were very much focused on revenue quality and efficiency. And as even through the downturn, actually, the margins expanded. And so, we are very disciplined in this area, and we are executing the plan. We'll have to watch how the market conditions change.

Our volumes have actually, as you can see, have declined, and yet the margins have gone up. And the team has done a fantastic job and I expect them to do that going forward."
 

SwampRatt

Well-Known Member

Other Opp-Co topics:

Mike Lenz -- Chief Financial Officer

Thank you, Brie. While revenue was up 6% for the quarter, profitability was challenged with operating income down 18% on an adjusted basis and adjusted operating margin down 150 basis points year over year. At Express, adjusted operating income declined 72% due to lower average daily package and freight volume and increased expenses as cost reductions lagged volume declines. These factors were partially offset by yield management actions, including higher fuel surcharges.

Package yield, including fuel, grew 16% year over year. Turning to Ground. Operating income increased 3% primarily due to yield improvement and home delivery volume growth. Yield including fuel grew 12% year over year.

Ravi Shanker -- Morgan Stanley -- Analyst

Hi, everyone. So, regarding the GRI you announced, how do you reconcile pushing through your biggest rate increase in history at a time when your volumes are falling double digits? I mean, isn't that going to exacerbate the volume decline?

Brie Carere -- Executive Vice President and Chief Customer Officer

Fair question. I think the answer is inflation. Last year, we had a 5.9% increase in post, and by the way, we have just an incredible insight into our pricing discipline in the market and the commercial tools the team have are just best-in-class. So, last year, we did a 5.9%.

It was incredibly sticky. We had continued cost increases throughout the year, and so we felt that the 6.9% was appropriate for this year's GRI. We will monitor post-implementation stickiness. And of course, we're constantly looking to balance the yield and the volume and make sure that we get the right volume levels from a utilization perspective.

But given the inflationary backdrop, yes, we thought this was the right increase for the year.
 

almost13ranch

Ambitiose sed ineptum
****, what else can they cut? The facilities are in shambles. Hell, they won't even buy brooms. No soap, no paper towels, sinks and toilets don't work.

To trim any more fat from Freight would require them to strip the tin off the roof, and sell at the scrapyard.
I’m hearing that blue tarps are all the rage, especially in the big cities.
 

SwampRatt

Well-Known Member
And big point, on the report, zero mention of "cost saving" measures at Freight....Why?
I "think" the cost savings (at Freight) is to be realized through so-called "wage increases" being significantly less than inflation, while rates (and surcharges) always keep up - or exceed - long term.


"The increase will apply to all FedEx (NYSE: FDX) services except for its less-than-truckload service, FedEx Freight. Increases there will range between 6.9% and 7.9%, depending on the customer’s transportation rate scale, the company said."
 

Streaker69

The Influencer
I "think" the cost savings (at Freight) is to be realized through so-called "wage increases" being significantly less than inflation, while rates (and surcharges) always keep up - or exceed - long term.


"The increase will apply to all FedEx (NYSE: FDX) services except for its less-than-truckload service, FedEx Freight. Increases there will range between 6.9% and 7.9%, depending on the customer’s transportation rate scale, the company said."

I've never heard of FedEx dropping prices.

As for the rate increase, freight has a lot of competition. Express and ground do not. If they could get away with an increase at freight, they would absolutely do it.
 

Streaker69

The Influencer
You mean the guy that use to be the biggest complainer on Lou road board? Now he's a smart A know it all management lacky. That guy?
Had one dealing with him. He was in NAS for some reason. I was talking to my RDA and he kept butting in. I turned and looked at him and said. If I wanna talk to you I'll look at you. Otherwise rest your neck!
Had one ride with me years ago. Back when the position was first created. Told me the day before he was going to ride with me. I limited my water intake that day.

We drove 300 miles without stopping. Then watched him do pee pee dance to bathroom. Got my hooks and told him let's go. He said NOPE! I'm riding back with someone else.

Never had anyone ride with me since.

I don't think my RDA likes me. I shoot off at least one email week questioning the dispatchers practices. I also ask a lot of follow up questions because he sucks at explaining stuff.
 

FatChance

Active Member
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I don't think my RDA likes me. I shoot off at least one email week questioning the dispatchers practices. I also ask a lot of follow up questions because he sucks at explaining stuff.
They don't like anyone who is engaged as they say. They want you to smile and say thank you while lowering your draws.
 

Streaker69

The Influencer
They don't like anyone who is engaged as they say. They want you to smile and say thank you while lowering your draws.

I wish I was there when he gets that email notification :lmao:

I feel like I'm putting together a book of company policies since we don't get them anymore and I can't access it at home.
 

BIG R GUY

Ted and Wayne’s driving instructor
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I thought Raj, and Satish both said the sky is falling a few weeks back? But also stated customers will have 1 day less to get their packages guaranteed delivered before Xmas because they anticipate being that busy?
 
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