Is FedEx going out of business

Is FedEx going out of business (2023) – Reason of their shuting down

Is FedEx going out of business? A quick glance at FedEx Company’s chart reveals that the year has been challenging. Investors are left to wonder if things will improve. It happened as the shares of the pioneer in shipping and logistics have fallen more than 40% since January 1, 2022.

In the short term, FedEx will continue to deal with difficulties that have marked its shares with “return to sender,” in this case, “return to early epidemic levels.”

Longer term, the business will bounce back. It’s difficult to predict how much longer, especially as economic concerns grow. We do know, though, that FedEx has experienced difficult periods in the past before rising to new record highs.

DiscontinuedNews is impartial and independent, and every day, we create distinctive, world-class programs, news, and content that inform, educate and entertain millions of people worldwide.

Is FedEx struggling?

Each day, FedEx delivers about 15 million express and ground shipments. That is a vast improvement over the 186 loads it gave on its first day of business in 1973. The company has expanded into the world’s most extensive overnight delivery service after 50 years.

Is FedEx going out of business

The organization has always made it a point to employ any technology that is available to it. This is the main reason it can deliver so many items on time. In several situations, FedEx created the technology when it wasn’t already there.

A $500 million revenue loss was experienced by FedEx Express. Thus, the delivery giant’s air freight division is particularly vulnerable to setbacks in Asia and Europe. FedEx Ground, which brings goods to doorsteps throughout the United States and Canada, performed $300 million worse than expected. 

Because of the industrial economy’s relative stability in 2022, the company’s less-than-truckload division, FedEx Freight, had an excellent quarter. Investors quickly sold down FedEx’s stock after this disappointing report. The most significant single-day decline in share prices ever was 21%. Additionally, it triggered a broader market sell-off.

The general population typically pays little attention to logistics. This change is due COVID-19 pandemic. People cheered on truckers throughout 2020 and 2021 as they observed container ships gather at ports.

Americans realized immediately that almost everything they purchased had likely been transported by truck, ship, or train at some point. When orders for automobiles, furniture, and apparel were delayed by weeks or months, supply chain problems struck close to home.

The decrease in demand for air cargo has affected FedEx. Its air cargo division, FedEx Express, is the gem in the firm’s crown. Express will make about $174 million in operating income in the fiscal year 2023. It is down from $567 million the previous year, according to the delivery giant’s report for 2022.

The fall is evident, but it’s unclear whether it indicates a downturn or a return to routine. The declines at FedEx are troubling on their face. According to Adie Tomer, a senior economist, “when we see huge logistics corporations like FedEx declare troubling results, it might send up warning bells for all economic observers.”

FedEx expert Satish Jindel, founder and CEO of the consulting firm ShipMatrix, said the corporation needs to make much deeper cost-savings cuts. He said the savings should be more significant than those proposed by the cost-savings programs.

Jindel noted that, for one thing, the firm won’t have to spend significantly to ramp up for the 2022 peak delivery season. Thus, FedEx’s capital budget must be trimmed by more than the $500 million the company has already revealed.

Customers’ are continued to return to in-store shopping. The high inflation rate is reducing their purchasing power. Hence, demand is projected to remain flat compared to the previous year.

The company’s stunning decline is due to the world economy, or the “macro climate,” as CEO Raj Subramaniam told CNBC’s Jim Cramer. The CEO was asked by Cramer if he anticipated a global economic downturn. Subramaniam answered, “I believe so.” Later, FedEx outlined important initiatives to get back on track.

The company will reduce Sunday deliveries and dismantle several of its aircraft. Additionally, it expects to shutter nearly 100 retail sites. Like many other businesses at the moment, they decided to put a hold on recruiting until the global economic instability settles.

Why did Amazon stop using FedEx?

FedEx claims that one of the main factors in its decision not to renew its agreement with Amazon was its desire to concentrate on the more extensive e-commerce sector.

Is FedEx going out of business

The hub-and-spoke delivery system was used by FedEx. Nowadays, it’s so typical that virtually anything is transported in that manner (including airline passengers). It is also the first significant delivery network to trace shipments from the shipper to the receiver via barcode scanning. One of its first SuperTrackers is on exhibit at the Smithsonian since it was such an innovative idea.

FedEx said it would begin implementing “Picture Proof of Delivery” in June 2022. If it seems familiar, it’s probably because Amazon has been doing it for years. The tracking updates will include a picture of the location where our delivery was left, as long as it was shipped by Amazon.

There is definitely a significant difference. We must have ordered something from Amazon, and it should have been delivered by one of Amazon’s drivers to view a picture of our delivery.

The decision is between developing their own order processing system or turning it over to Amazon for several small businesses. Every small business that chooses Amazon is a missed customer for a company like FedEx. In 2019, FedEx entirely discontinued its connection with Amazon. Therefore, FedEx must introduce innovative features that enhance the shipping process for its clients and receivers.

For instance, we will only need a FedEx account if we order something from Target and it is shipped by FedEx. We won’t log into FedEx to find out the location of our parcel. All we likely have is a tracking number.

FedEx is unable to resist. It must keep up with its competitors to draw in customers. It might likely mean UPS, but Amazon is FedEx’s biggest competitor.

FedEx has become more efficient, and the number of claims for packages that never arrive has decreased. Every time an employee leaves a box for a customer, the business now has evidence. The fact that FedEx has not been doing this all along is the only thing that surprises us.


FedEx announced in September 2022 that it was closing corporate offices and retail locations. It, therefore, intended to delay new recruitment as part of a belt-tightening campaign driven by a decline in its international package delivery sector.

We must look ahead to FedEx’s fiscal year 2024 to understand what to expect in the calendar year 2023. This is because of the company’s peculiar budgetary schedule. The joint agreement is that FedEx will have a successful start to its new fiscal year. The average prediction for Q1 EPS assumes 25% year-over-year growth compared to the disappointing previous quarter.

This indicates that the market might take a few more disappointing quarters to trust FedEx again. A “less negative” profit decline in the subsequent quarters would attract investors. This will enable a return to the growth phase likely required for the FedEx bleeding to end.

Leave a Comment

Your email address will not be published. Required fields are marked *