FedEx gives Q1 report and rate rises

International delivery and logistics company FedEx has reported a revenue of US$14.7 billion for Q1 of financial year 2017, up from US$12.3bn in Q1 2016.

For the first quarter the operating revenue was $1.26 billion ($1.36bn when adjusted to exclude TNT Express integration and Outlook restructuring program costs and intangible asset amortization expense). This compared to $1.14bn in Q1 2016.

“Operating results rose compared to last year due to higher base yields at FedEx Express and FedEx Ground, volume growth at FedEx Ground and ongoing cost efficiencies at FedEx Express,” said the company.

“These factors were partially offset by integration and restructuring program costs and intangible asset amortization at TNT Express, and higher network expansion costs at FedEx Ground.”

Frederick W. Smith, the company’s chairman, president and chief executive officer, commented: “The integration of TNT Express is proceeding smoothly, and the level of team members’ engagement is outstanding.

“Managing our operating companies as a portfolio of customer solutions helped FedEx achieve strong financial and operating results in the quarter, especially given the global economy’s continued low growth.”

FedEx also reaffirmed its planned shipping rate hikes. Effective on the 2nd January FedEx Express is to increase shipping rates by a global average of 3.9%, while FedEx Ground, FedEx Home Delivery and FedEx Freight will increase shipping rates by an average of 4.9%. Additionally FedEx and FedEx Ground U.S. domestic dimensional weight divisor will also change from 166 to 139.

From 6 February, instead of adjusting Fed Ex Ground fuel surcharges every month the company will adjust them on a weekly basis.

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