FedEx Ground is adjusting downward its holiday traffic forecasts due to an increasingly pronounced slowdown in demand, according to a person familiar with the matter.
In a statement late Friday, the FedEx Corp. (NYSE: FDX) ground delivery unit said that “weakening macroeconomic conditions are causing volume softness.” The unit said it is “collaborating with customers on their projected shipping needs and making adjustments as necessary” to ensure it can meet its delivery commitments. It did not provide any specific numbers.
The news of FedEx’s move was first reported by Reuters.
FedEx Ground, which encompasses its U.S. business-to-business (B2B) and business-to-consumer (B2C) ground delivery services, delivers the vast majority of the company’s U.S. volumes.
Last month, FedEx pre-announced its fiscal 2023 first-quarter results a week before officially releasing them. In the early release, it announced a massive decline in year-over-year operating income at its FedEx Express air and international unit. It also said FedEx Express revenue for the quarter would come in about $500 million less than originally projected. Company executives blamed much of the weakness on a sudden decline in demand out of Asia.
FedEx also suspended financial guidance for the rest of the fiscal year, which ends May 31, 2023.