FedEx Freight noted LTL market weakness persisting, notably in the industrial sector, for quarterly results released Tuesday.
“We have not seen a marked improvement in the industrial economy,” EVP and Chief Customer Officer Brie Carere said on an earnings call.
Operating income for the segment fell 6% to $477 million, according to an investor presentation, as the business noted lower fuel surcharges, reduced weight per shipment, higher costs for staff wages and benefits, and one fewer operating day.
FedEx Freight LTL shipments were flat year over year in March, down 2% YoY in April and down 1% YoY in May, the presentation reported.
Nevertheless, a “better-than-expected May more than offset a softer than expected April,” Carere said.
The improvement for the quarter helped deliver the best operating margin over the past 12 months with a 20.8% operating margin. That was a slight slip from the 21.2% operating margin YoY, though.
The segment also posted revenue that beat expected analyst projections, $144 million higher than Bank of America Global Research's forecast.
FedEx Freight, aiming for a spinoff in June 2026, also sold a facility that gave the business a $33 million gain, according to the presentation.
The property wasn’t identified, but parking and freight network Outpost recently acquired a 27-acre FedEx terminal in Dallas. The site features a 154-door cross-dock, a 9-bay drive-thru maintenance shop, 800 marked parking spots and office space, the trucking service startup said in a news release.
FedEx Freight has hundreds of terminals but has reconfigured operations throughout parts of the U.S. and also sold off property. That’s given competitors, such as Knight-Swift Transportation Holdings’s growing LTL network, some opportunities to expand.
