October 7, 2022


Skillful Business Crafters

FedEx quarterly earnings exceed analysts’ expectations

Leaders of FedEx Corp. on Thursday said the company continues to face higher labor costs related to the COVID-19 pandemic and staff shortages, but that the situation is improving as the global shipping giant has managed to hire many more people in recent months.

And the company reported quarterly revenue and earnings per share that exceeded analysts’ expectations.

Company leaders have said mass hiring is essential to its current plans, and reported success.

“Last week we exceeded 111,000 applications, the highest level in FedEx history. To put this in perspective, we had 52,000 applications the week of May the eighth,” Raj Subramaniam, president and chief operating officer of FedEx, said in a phone call with analysts. 

“That has led to appropriate levels of staffing for peak (season), including hiring more than 60,000 front-line team members since we last spoke in September.”

A FedEx Ground truck turns onto South Third from Mallory in South Memphis.

At that time, he and other FedEx leaders had said the company didn’t have enough people to do the job, and that it’s had to pay higher wages, pay contractors and reroute packages around short-staffed areas, driving up costs. The company said the problems had cost $450 million during the quarter and contributed to a dip in profits.

But on Thursday, Subramaniam said the increased staffing is helping the company reduce the expensive practice of rerouting packages away from short-staffed facilities. “Even as we speak, we are re-routing packages back to what it should be in the first place. And that’s what’s going to make the difference.”