FedEx Corp. will accelerate pay increases for hourly employees this year as part of its response to the new tax law and expected benefits from it. The company will also make investments in facilities in Indianapolis and Memphis.
“FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States,” it said in a statement, adding that “the company has made no change to its fiscal 2018 earnings or capital expenditure guidance as issued on December 19, 2017 as a result of these actions.”
FedEx said it would invest $200 million in increased compensation for employees, with two-thirds of its members receiving annual pay increases on April 1, rather than the standard October date. The remainder of the money will fund increases in performance-based incentive plans for salaried personnel, the company said.
In addition, FedEx will make a voluntary $1.5 billion contribution to the FedEx pension plan and invest another $1.5 billion to expand the FedEx Express Indianapolis hub over seven years. The Memphis SuperHub will also be modernized and enlarged in a “major program” that will be announced later this spring.
Did you know?
The U.S. had a $135 billion trade deficit with the European Union, which is down from $146 billion in 2016 and $155 billion in 2015.
“We cannot get our product in. It's very, very tough. And yet they send their product to us - no taxes, very little taxes. And it may morph into something very big from a standpoint - from a trade standpoint.”
- President Donald Trump to ITV, on U.S-Europe trade relations
In other news:
Tax incentive boosting robot deployment
The new tax law’s provision allowing immediate and full depreciation of equipment is boosting firms interest in robots. (Wall Street Journal)
Trump attacks Europe on trade
President Donald Trump is hinting at retaliation against the European Union over what it believes is unfair trade practices. (Wall Street Journal)
2018 looks good, but keep a weary eye
While all indicators continue to suggest 2018 will a robust one for the industry, there are a few warning signs to look out for. (CCJ)
Saavy shippers search for solutions to capacity shortage
Shippers have experienced capacity shortages before, but this one may be a bit different due to ELDs and the driver shortage. (Supply Chain Dive)
EPA still working on GHG rules
The EPA is still evaluating greenhouse gas regulations for light-duty vehicles and says it has not yet progressed on any review of the heavy-duty regulations.(Fleet Owner)
FedEx has become the latest company to cite tax reform as it announced new investments, including $1.5B in its Indianapolis facility and a $1.5B pension contribution. The company will also accelerate pay increases to the tune of $200 million.
Hammer down everyone!
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