"At its 2026 investor day last week, FedEx ( No. 49 on the Fortune 500) projected 4% annual revenue growth to $98 billion (excluding FedEx Freight) between FY26 and 2029, $8 billion in operating income, and $6 billion in adjusted free cash flow by 2029. The backdrop is a slower parcel market, normalized e-commerce demand, uneven global trade, and more delivery choices for large customers."
"Rather than expanding its network-which already moves 17 million packages a day and about $2 trillion in goods annually-FedEx plans to monetize it more effectively, Dietrich told me. Priorities are margin expansion, operating income growth, lower capital intensity, and a targeted 11% ROIC. Free cash flow remains key, with capital expenditures near 4% of revenue and aircraft capex capped at $1 billion annually."
"A big piece of the refocus is operational integration. FedEx is combining Express and Ground under a unified "One FedEx" structure through Network 2.0, aiming for "one neighborhood, one truck" instead of running parallel routes. That means consolidating facilities, linehaul, procurement, and capital planning. It's not simple. Express and Ground operate differently, with distinct cost structures and service models. Bringing them together without disrupting customers will be one of the company's toughest execution tests."
FedEx is shifting to a value-focused strategy that reduces large capital spending while prioritizing network monetization, data, AI, and stricter financial discipline to meet 2029 targets. The company projects 4% annual revenue growth to $98 billion (excluding FedEx Freight), $8 billion operating income, and $6 billion adjusted free cash flow by 2029. The plan emphasizes margin expansion, lower capital intensity, and an 11% ROIC target with aircraft capex capped at $1 billion annually and overall capex near 4% of revenue. Network 2.0 will integrate Express and Ground to consolidate routes, facilities, procurement, and realize structural cost savings.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]