Australia, Company News, International, Transport Industry News

FedEx to split freight sector into separate company

FedEx has revealed plans to separate its freight side into a completely new company this year

FedEx has announced that it plans to separate its FedEx Freight side of the business to create a second publicly traded company.

The separation is set to be achieved in the next 18 months for FedEx stockholders, resulting in the creation of FedEx Freight to sit beside FedEx.

FedEx says the split will maintain the strategic advantages of both parties and will ensure the same superior service for customers.

“This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,” FedEx president and CEO Raj Subramaniam says.

MORE OWNERDRIVER TRENDING STORIES:

“This announcement is a testament to the strength of the business our team has built, and to our dedication to doing what’s best for our customers, our team members and our stockholders. Through this process, we will unlock value for our freight business and position FedEx to create even greater value for stockholders.”

Vice chairman of the FedEx board R. Brad Martin says the past 50 years has seen FedEx build a strong global platform producing significant value for stockholders.

“Building upon that powerful foundation, and following a careful assessment of our portfolio, the FedEx Corporation Board is confident that a separation of FedEx Freight will drive continued growth and value creation,” Martin says.

The split follows a recently completed assessment that saw FedEx decide that strategic opportunities arise from separating FedEx Freight into an independent company.

Through the separation, FedEx says both companies will benefit from enhanced operational focus, distinct investment profiles, strong balance sheets and a shared brand.

This move, part of other FedEx initiatives, is expected to create $4 billion in cost savings by the end of 2025.

Subscribe to the weekly Owner//Driver newsletter here.

Previous ArticleNext Article
  1. Australian Truck Radio Listen Live
Send this to a friend