Profits continue to slide at FedEx. The Memphis-based shipping giant says it made $361 million in the third quarter, down 31 percent from a year ago. Executives blame the latest drop on weak demand for international express shipments.
Businesses are picking slower, cheaper alternatives for getting their products to customers. It’s a switch that’s had a big impact on FedEx’s domestic business over the past few years. Now, it’s spread to international shipments, especially air freight to Asia. FedEx Air CEO Dave Bronczek says it’s a change that’s happened faster than the company expected.
“We have too much volume of the wrong product in the wrong network.”
Bronczek says FedEx is cutting the number of flights to Asia, starting next month. It’s also looking to put less profitable international shipments on less expensive channels, like sea freight. The actions come as FedEx is looking to cut nearly two billion dollars in expenses by 2016. To do that, it’s offering buyouts to workers and selling off aircraft.
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