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FedEx profit up 119.6pc to US$1.2 billion as sales rise 19pc

US express delivery giant FedEx posted a 119

28 December 2020 - 05:24
US express delivery giant FedEx posted a 119.6 per cent increase in second quarter net profit to US$1.2 billion, drawn on revenues of $20.6 billion, up 19 per cent.

FedEx said the global air cargo market capacity was down 23 per cent year on year due to fewer passenger aircraft flying. Air cargo demand is expected to recover to pre-Covid levels faster than passenger capacity for key intercontinental lanes, creating an opportunity for FedEx.



FedEx, which operates 680 aircraft, employs 600,000 people and has 200,000 vehicles, credited growth to booming e-commerce and volume growth in its International Priority and US domestic residential package services and price increases and peak surcharges.



E-commerce package volumes are expected to more than triple to 111 million packages per day by 2026, up from 35 million in 2019.



This was partially offset by costs to support strong demand and to expand services, variable compensation expense, and Covid related costs.



Its ground business handled an average of 12.3 million packages per day during the quarter compared with 9.6 million a year ago. Its international priority freight service saw volumes grow by 19 per cent.



Said FedEx president Raj Subramaniam: 'We are in the midst of an extraordinary peak season as we handle record-breaking volumes and deliver strong service for our customers. While our regular peak season falls in November and December, our preparations were months in the making this year.



'In many ways, we have been operating at peak like levels since March due to service and e-commerce volume,' said Mr Subramaniam.



'We planned meticulously throughout this year, including collaborating with our customers on innovative solutions, enhancing capacity through new and repurpose facilities and leveraging the flexibility of our network to ensure we are well-positioned to deliver during our busiest holiday shipping season to date.'


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