FedEx Freight (FDXF) Deutsche Bank’s Chicago Industrials Summit summary

Strategic and operational update

• Achieved a smooth transition to independence, with strong execution and early progress on strategic initiatives.

• Maintains focus on delivering commitments outlined at Investor Day, with medium-term financial framework unchanged.

• Enhanced accountability and capital allocation aimed at maximizing long-term potential and shareholder value.

• Operates the largest and densest LTL network in North America, supported by a proven operating model and improved service metrics.

• Technology investments target improved visibility, efficiency, automation, and customer experience.

Market outlook and growth opportunities

• Expects slow, steady recovery in average daily volume from June to December, reaching flat year-over-year by year-end.

• Anticipates network growth in calendar year 2027, with focus on SMB, technology, healthcare, and grocery verticals for revenue and margin expansion.

• Dedicated LTL sales force and dual service model (Priority and Economy) drive customer acquisition and network efficiency.

• Margin guidance reflects headwinds from variable comp and TSA agreements, with margin expansion expected as these pressures ease by 2027.

• Biggest risk identified as geopolitical uncertainty; opportunities lie in improved customer experience and digital solutions.

Technology and operational transformation

• Transitioning from legacy FedEx Corp technology platforms to independent solutions, focusing on pricing, customer hierarchy, and operational systems.

• Plans to leverage off-the-shelf operational technology for productivity gains, with significant investments planned through 2027.

• Fully ramped, dedicated sales team now incentivized on both revenue and margin, enabling targeted customer growth and improved service.

• Enhanced ability to price and serve 3PL customers with more frequent, precise cost updates and lane optimization.