Labor shortage concern at Fedex

NC man

Well-Known Member

FedEx earnings: Business booms in fourth quarter, but hiring struggles concern executives​

Max Garland
Memphis Commercial Appeal

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FedEx's business continues to thrive more than a year into the COVID-19 pandemic, the company announced in its earnings report Thursday, but executives also flagged hiring challenges that have hobbled service levels.
FedEx made $22.6 billion in revenue for the 2021 fiscal year’s fourth quarter, up 30% from the year-before quarter. The company posted an adjusted net income of $1.36 billion, well ahead of last year's $663 million.
“I am optimistic about the future of FedEx as we continue to innovate for our customers and meet strong demand for our global transportation network and capabilities,” said FedEx Chairman and CEO Fred S in a statement.
FedEx’s fourth quarter ended May 31. It marked the end of a strong fiscal year for the Memphis logistics giant, in which its outlook improved significantly from the early days of the COVID-19 pandemic.
A FedEx Express employee moves the distribution process along for doses of the Johnson & Johnson COVID-19 vaccine at the FedEx Express World Hub in Memphis, Tennessee on March 1, 2021.


Business-to-business shipping traffic has rebounded, while business-to-consumer volume has surged as more home deliveries are being made. FedEx also surpassed 100 million COVID-19 vaccine dose deliveries, a small but meaningful piece of its recent volume.
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“For fiscal 2021, we delivered record financial results while also recognizing the valuable contributions by our team members,” said Chief Financial Officer Michael Lenz in a statement. “We expect continued strong momentum in fiscal 2022, and our investments are focused on the areas of greatest growth and highest returns, like e-commerce, to position us for sustained long-term growth in earnings, cash flows, and returns.”

For the future, FedEx is pushing “accelerated capacity expansion, fleet and facility modernization, and increased automation,” the company said in a news release.

Labor shortages concern top executives​

Volume growth helped fourth-quarter results, FedEx said, but the company took a hit from costs to address demand and higher labor rates. Total operating expenses increased 23% from the year-before quarter.
The U.S. labor market has been challenging for FedEx over the past few months, Smith said on the company's earnings call, hurting the company’s hiring efforts and forcing tweaks in its network to deal with the shortage of employees.
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FedEx President and COO Raj Subramaniam said limited labor availability has contributed to FedEx delivery service levels that don’t meet the company’s expectations.
“The inability to hire team members, particularly package handlers, has driven wage rates higher and creates inefficiency in our networks as we use overtime to cover open shifts and route volume around known constraints, just as a few examples,” he said.

Salaries and employee benefits increased 21% in fiscal year 2021 from the year before.
The company is “taking bold actions across the business to address service issues,” Subramaniam added, including continued investments in employees, capacity and technology. He said over the next two or three months, FedEx expects the hiring situation to improve.
Smith said although the challenges in the U.S. labor market have "begun to abate," delivering a successful peak holiday shipping season “will require additional flexibility and creativity” by FedEx’s employees.

Express, Ground and Freight all improve results​

The services of FedEx Express, FedEx’s largest company, have been in high demand as cargo capacity on passenger planes remains limited. The company made $11.3 billion in revenue for the quarter, an increase of 32% from the year before. Operating income jumped from $338 million to $737 million.




FedEx Express specifically saw “exceptional growth in international export and U.S. domestic package services” as it handled record fourth-quarter volume, FedEx said. Chief Marketing Officer Brie Carere said capacity constraints benefiting Express aren't expected to subside any time soon.
“We expect air cargo capacity to remain constrained through at least the first half of calendar year (2022),” she said. “Recovery will be slow, potentially episodic, and a full recovery is not anticipated until 2024.”
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FedEx Ground, meanwhile, has reaped the benefits of the e-commerce boom, handling significantly higher package volumes and hiring delivery drivers in record numbers. The company made $8.1 billion in revenue versus $6.4 billion the year-before quarter. Its operating income leaped 64% to $1.1 billion.
FEDEX HISTORY:Here are some of FedEx's most interesting deliveries, from ancient artifacts to a panda
Strong growth in commercial shipments and revenue per package, or yield, helped FedEx Ground’s results in the fourth quarter, FedEx said.
Average daily package volume for FedEx Express and FedEx Ground increased by 20% and 9%, respectively, from the year-before quarter.
FedEx Freight’s revenue increased 38% to $2.2 billion, while its operating income more than doubled. FedEx attributed the company’s record earnings “to the continued focus on revenue quality and profitable growth.”
A FedEx Freight Direct employee transports a large package into a customer's home.


FedEx shares were trading at $290.75 per share in after-hours trading. The stock price has climbed since March’s earnings report, but it’s still hovering below its 52-week high of $319.90.
FedEx reported adjusted earnings per share of $5.01. Investment research firm Zacks had predicted $5.04 in earnings per share for the quarter as of Thursday afternoon.
On the earnings call, Smith and Subramaniam also addressed the mass shooting in April that killed eight FedEx employees at a company facility in Indianapolis.
“Our most heartfelt sympathies and condolences remain with the families, team members and friends of these individuals,” Subramaniam said. “They will forever be members of the FedEx family.”
Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at [email protected] or 901-529-2651 and on Twitter @MaxGarlandTypes.
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Fred's Myth

Nonhyphenated American
‘Team Members’ must be referring to the Board of Directors.

For the rocket scientists in Financial, attractive compensation including benefits is how to lure (and keep) employees. Stop pinching blood out of the pennies!
 

zeev

Well-Known Member
I got an email from the local UPS hub offering me full time Tu-Sat package car driver, why does any body work at FedEx.
 

falcon back

Well-Known Member
I got an email from the local UPS hub offering me full time Tu-Sat package car driver, why does any body work at FedEx.
Because bitching and whining is what makes their life worth living. They hate the place, bad mouth the pay, the managers and the benefits, yet they refuse to look for another job. Good luck with the new employer
 

bacha29

Well-Known Member
Because bitching and whining is what makes their life worth living. They hate the place, bad mouth the pay, the managers and the benefits, yet they refuse to look for another job. Good luck with the new employer
And from what university prey tell did you earn your doctorate in psychiatry and human behavior?
 

59 Dano

I just want to make friends!
‘Team Members’ must be referring to the Board of Directors.

For the rocket scientists in Financial, attractive compensation including benefits is how to lure (and keep) employees. Stop pinching blood out of the pennies!
For the rocket scientists at BC: how much should they spend on a package handler's hourly rate?
 

Aquaman

Well-Known Member
Don't forget my positive outlook on life and enjoyment of every day of retirement. I am also positive you are a lazy ass maroon that wishes he knew just a little about finances.
I’ll get a new job when you find a new forum lol. Look around. Nobody here is bragging about retirement. Nobody is here to talk about our golf game. We’re all working for this company discussing the problems, the things that need to change, the direction of the company. Misery loves company lol. You’re the odd man out dude. You’re the 1980’s employee that could have left and gone to 100 companies that would’ve set you up for life. Benefits were different back then, pay progression was different. Stop telling people to jump ship who have put in decades here, have schedules that work with their families, but just want to be paid fairly. Get off the forum and go enjoy retirement. You don’t have to deal with this crap like the rest of us. Congrats. You were born in a more employee focused time. But FedEx Express is the new K-Mart of the shipping world. Let us cry. Regardless of why we stay or leave it’s honestly none of your business anyway. Maybe some of us are holding out hope that we’ll catch a little breeze of the company that hired you. Either way go *
 
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Operational needs

Virescit Vulnere Virtus
I’ll get a new job when you find a new forum lol. Look around. Nobody here is bragging about retirement. Nobody is here to talk about our golf game. We’re all working for this company discussing the problems, the things that need to change, the direction of the company. Misery loves company lol. You’re the odd man out dude. You’re the 1980’s employee that could have left and gone to 100 companies that would’ve set you up for life. Benefits were different back then, pay progression was different. Stop telling people to jump ship who have put in decades here, have schedules that work with their families, but just want to be paid fairly. Get off the forum and go enjoy retirement. You don’t have to deal with this crap like the rest of us. Congrats. You were born in a more employee focused time. But FedEx Express is the new K-Mart of the shipping world. Let us cry. Regardless of why we stay or leave it’s honestly none of your business anyway. Maybe some of us are holding out hope that we’ll catch a little breeze of the company that hired you. Either way *
Winner, winner, chicken dinner!
 
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falcon back

Well-Known Member
$2 an hour more than you. Their job actually accomplishes something.
What did you accomplish while working? You spread misery and gloom on a daily basis. You despised everything about your job and in retirement, you struggle because your retirement plan didn't provide like you hoped. I would classify your career at FedEx a total failure.
 
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