'Stagnation Warning' FedEx to Raise Rates by 6.9%... Unveils Cost-Cutting Plan

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Logistics company FedEx, which warned of a global economic recession, has unveiled a cost-cutting plan including rate hikes. This is a response to deteriorating demand worldwide amid growing recession concerns.

According to economic media CNBC and others, FedEx announced on the 22nd (local time) that express, ground, and home delivery rates will increase by an average of 6.9%. Freight transportation rates will rise by an average of 6.9% to 7.9%.

FedEx also estimated that cost savings of $1.5 billion to $1.7 billion could be achieved through flight reductions. The company plans to cut costs by $350 million to $500 million through other measures such as closing certain locations and suspending Sunday operations at some sites.

Through these measures, the company estimates total cost savings of $2.2 billion to $2.27 billion for the 2023 fiscal year.

Earlier, FedEx's stock price plunged after releasing preliminary results last week that fell short of Wall Street expectations. FedEx CEO Raj Subramaniam also stated, “We anticipate a global economic recession.”

On the afternoon of the same day, FedEx's stock was trading up 1.93% compared to the previous session on the New York Stock Exchange.

This content was produced with the assistance of AI translation services.