FedEx is making progress with Network 2.0, implementing optimization in more than 50 locations in the U.S. In some markets, contracted service providers will handle pickup and delivery, while in others, it will be handled by employee couriers.

The organizational redesign to bring FedEx Express, FedEx Ground, and FedEx Services into Federal Express Corporation is being implemented in phases with the new legal structure complete by June 2024.

Capital expenditures for 2024 are expected to be approximately $5.4 billion, a decrease of $0.7 billion from 2023, as the company continues to reduce capital intensity relative to revenue.

The DRIVE program initiatives are driving cost efficiencies through increased linehaul efficiencies, improved dock productivity at FedEx Ground, and network rationalization at FedEx Express.

Management is focused on executing a revenue quality strategy to mitigate yield pressures through surcharge management and optimizing customer and service mix.

Management is actively managing and optimizing capital allocation in response to the economic slowdown, inflationary pressures, changing fuel prices, and geopolitical conflicts.

The company is experiencing a decline in demand for transportation services due to elevated inflation and interest rates negatively affecting consumer and business spending.

The current contract for FedEx Express to provide transportation services to the USPS expires in September 2024, and there is no assurance that a new agreement will be reached, which could negatively affect profitability.

Geopolitical conflicts may adversely affect the business and results of operations, and while the company does not expect a direct material effect, the broader consequences are adversely affecting the global economy.

The company acknowledges the effect of intense competition on its ability to maintain or increase prices and grow revenue and market share.

Management is focused on managing cost structure to match shifting volume levels to remain competitive.

The company is focused on executing and effectively operating, integrating, leveraging, and growing acquired businesses.

Fuel expense decreased by 16% in the third quarter and 25% in the nine months of 2024 primarily due to lower fuel prices and usage.

Purchased transportation expense decreased by 1% in the third quarter and 6% in the nine months of 2024 primarily due to lower volumes and fuel prices and a shift from third-party over-the-road transportation to rail usage.

Other operating expenses decreased by 7% in the third quarter and 8% in the nine months of 2024 primarily due to lower professional fees and self-insurance accruals.

The company is focused on developing solutions to transform the digital and physical experiences of customers and team members through the FedEx Dataworks operating segment.

The company is making investments to optimize networks and modernize facilities, partially offset by lower aircraft spend and reduced capacity investments.

The company is focused on eliminating unnecessary information-technology redundancy and complexity throughout the organization.

The company repurchased $2.0 billion of shares in the nine months of 2024 and authorized a new $5 billion repurchase program in March 2024.

Capital expenditures for 2024 are expected to be approximately $5.4 billion, a decrease of $0.7 billion from 2023, as the company continues to reduce capital intensity relative to revenue.

The company is evaluating investments in critical long-term strategic projects to ensure capital expenditures are expected to generate high returns on investment and are balanced with the outlook for global economic conditions.

The company is focused on achieving or demonstrating progress on its goal of carbon neutrality for its global operations by calendar 2040.

The company is focused on reducing emissions through its aircraft modernization program, which is supported by the purchase of more fuel-efficient aircraft.

The company is focused on compliance with environmental laws and regulations.

The company is experiencing a decline in demand for its transportation services as elevated inflation and interest rates are negatively affecting consumer and business spending.

While the company does not expect ongoing geopolitical conflicts to have a direct material effect on its business, the broader consequences are adversely affecting the global economy.

Disruptions in global supply chains can limit the access of FedEx and its service providers to vehicles and other key capital resources and increase costs.