Global Trade: Fedex issues positive perspective

In its fourth quarter earnings report, Fedex explained its 6 percent y-t-d improvement on strong yield improvement in all transportation segments, as well as volume growth of ground and international express shipments.

This is good news indeed, and mirrors observations made by industry analysts who maintain that “innovation” is the key to strengthening our nation’s logistics sector.

FedEx has attributed the increase in its fourth quarter revenue and earnings to continued strong yield improvement in all transportation segments, as well as volume growth of ground and international express shipments.

“FedEx Ground maintained its exceptional performance this quarter, increasing volume, yields and margins, while FedEx Freight returned to profitability, said FedEx executive vice president & CFO Alan Graf Jr. “Even with higher planned capital spending in fiscal 2012, margins, cash flows and returns are expected to improve year over year.”

The fortunes of Fedex may not represent a tide lifting all boats, however. According to Rosalyn Wilson, author of the esteemed “State of Logistics” report, the economy has been in a fragile state for close to four years now.
“The highly touted recovery in some sectors has not generated enough momentum to cascade into other less robust sectors,” she said.

After the most recent round of data releases, especially the disheartening rise in unemployment and drop off in freight volumes, Wilson and other analysts are revising their growth expectations downward.

“I too have watched this situation developing over the last two months and have concluded that we may have hit a wall,” she said. “It has been close to two years since the recession was pronounced over and for many Americans things have not improved.”

A more detailed account of Wilson’s findings will appear in the July edition of LM.

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