FedEx Corporation (FDX) Business Profile

What it does

FedEx is a transportation, e-commerce and business-services company founded in 1971, headquartered in Memphis, and led by President and Chief Executive Officer Rajesh Subramaniam. It moves packages and freight for businesses and consumers through an integrated air-and-ground network, while also providing customs brokerage, freight forwarding, supply-chain services, retail shipping access, printing and data-enabled logistics tools.

Its two reporting segments are Express U.S. Domestic and Express International, together referred to as Federal Express. The U.S. business handles overnight, deferred and day-definite package and freight shipments, including business and residential deliveries. Its international business moves time-definite packages and freight between more than 220 countries and territories, and includes customs clearance, air and ocean forwarding, trade management and managed transportation.

The operating network included 700 aircraft, more than 180,000 motorized vehicles, about 84,000 drop-off locations and approximately 5,300 independent small businesses conducting certain linehaul and pickup-and-delivery work as of May 31, 2026. Federal Express employed approximately 452,000 people at that date; FedEx had 530,000 employees in FY2026.

Other operations include FedEx Dataworks, which develops data and decisioning capabilities for supply chains; FedEx Office, which provides retail shipping and document services; and FedEx Supply Chain, which provides warehousing, fulfillment, returns and related logistics services. FedEx announced an agreement to sell FedEx Supply Chain to CMA CGM Group, expected to close in the second half of calendar 2026.

How it makes money

FedEx earns transportation revenue when customers buy delivery, freight and logistics services. Within U.S. Domestic, it sells overnight, deferred, same-day and day-definite delivery for packages and freight. Within International, it sells priority, economy, express and deferred services, as well as customs brokerage, air and ocean freight forwarding, charter, trade-management and third-party logistics services. FedEx Office earns revenue from shipping access, printing and document services; FedEx Supply Chain earns revenue from logistics activities including warehousing, fulfillment and returns.

Prices generally vary by the service selected, origin, destination, weight, size, ancillary charges and whether a shipment is billed to a FedEx account. The company periodically changes published list prices and contractual-service prices. It can also apply demand surcharges when volumes, capacity demand or network costs are elevated. Indexed fuel surcharges apply to specified domestic and international shipments and are adjusted weekly, where permitted by law and contract.

Revenue therefore depends on shipment volumes, shipment weight and size, the mix of services customers choose, and yield per package, pound, shipment or hundredweight. Federal Express revenue increased 9% in FY2026, driven by improved package base yields, higher U.S. domestic package volumes, fuel surcharges, exchange rates and international freight-volume growth. Federal Express is also pursuing higher-yielding business-to-business and business-to-consumer services.

FY2026 consolidated adjusted earnings per share were $20.24.

Recurring demand is supported by customers’ ongoing shipping, fulfillment, returns, customs and supply-chain needs, although shipment levels and pricing move with economic activity, trade flows, fuel costs and network capacity.

Customers and how it sells

FedEx serves businesses and consumers that need domestic or cross-border package, freight, fulfillment, customs and logistics services. Its service mix spans urgent overnight shipments, less time-sensitive economy shipments, business-to-business freight, residential e-commerce deliveries and complex supply chains. The company is targeting business-to-business demand in healthcare, automotive, aerospace and data-center-related activity, alongside higher-value business-to-consumer services.

The U.S. Domestic network reaches 100% of the continental U.S. population. It offers Saturday delivery to 99% of the U.S. population and Sunday delivery to nearly two-thirds. The international network provides package delivery to more than 220 countries and territories and connects markets generating more than 99% of world gross domestic product. FedEx also provides domestic pickup and delivery in selected countries outside the U.S., including Canada, Australia, France, the United Kingdom, Italy, Mexico, Germany, Poland, Chile, China, Brazil, India and Southern Africa.

Customers can access the network through FedEx Office stores, FedEx OnSite locations, retailers including Walgreens and Dollar General, drop boxes, account-based shipping tools and digital tracking, return and delivery-management tools. FedEx International Connect Plus provides e-commerce delivery from more than 70 origin countries to more than 190 destination countries and territories. No customer concentration percentage is provided.

Suppliers and costs

FedEx operates a capital-intensive network that requires aircraft, vehicles, trailers, sorting equipment, technology and facilities. It purchases jet fuel from various suppliers under contracts of varying duration and at market prices, and it does not have jet-fuel hedging contracts. Most vehicle fuel is bought through retail purchases with various discounts.

Labor, employee benefits, purchased transportation, fuel, facilities, technology, outside-service contracts and professional fees are important operating costs. The company also contracts with approximately 5,300 independent small businesses for certain linehaul and pickup-and-delivery work. Fuel costs affect both its direct fuel expense and purchased transportation costs; fuel surcharges are intended to recover incremental costs over time.

In FY2026, higher wage rates, incentive compensation, employee benefits, purchased transportation, trade-policy effects and Spin-Off costs weighed on operating income. The newly ratified pilot agreement took effect June 29, 2026. The company expects higher wage and purchased-transportation rates, pilot-agreement costs and other inflationary costs during calendar 2026.

Competitive position

FedEx competes in domestic package delivery, international express delivery, freight forwarding, air freight, logistics and local delivery. In Express U.S. Domestic, named competitors include United Parcel Service, Inc. (UPS), passenger airlines offering express-package services, regional delivery companies, air-freight forwarders and the USPS. Internationally, named competitors include DHL, UPS, DPD, General Logistics Systems, foreign postal authorities, passenger airlines, air-freight forwarders, regional carriers and all-cargo airlines. Amazon.com is both a customer and a potential competitor through its hubs, aircraft, vehicles and delivery capabilities. FedEx Freight Holding competes in less-than-truckload freight as a separate company following its separation from FedEx.

Competition is based on price, service frequency, reliability, capacity, speed, package tracking, geographic coverage, service innovation and fit with a customer’s supply chain. International competitors can include government-owned, controlled or subsidized carriers that may have greater resources, lower costs or more favorable operating conditions.

Our reading: The network is a meaningful moat because it combines air, ground, retail and information infrastructure across more than 220 countries and territories; duplicating that footprint would require substantial investment and time.

Our reading: Network density, package tracking, data capabilities and established customer-access points support the service proposition, but they do not remove price competition or the risk from large networks operated by UPS, DHL and Amazon.com.

Our reading: The company’s international route authorities and all-cargo fleet strengthen its ability to serve cross-border demand, while government-backed carriers and changing trade patterns limit the durability of that advantage.

Growth opportunities

FedEx is transforming its North American surface network through Network 2.0, which consolidates sortation facilities and equipment, reduces pickup-and-delivery routes and optimizes linehaul operations. The program was fully implemented in Canada, and the company expects to complete U.S. implementation by the end of calendar 2027. The company expects nearly $1.0 billion of Network 2.0 and associated one FedEx savings by the end of calendar 2026 and $2 billion by the end of calendar 2027.

Internationally, Tricolor redesigns the air network to improve aircraft utilization and focus on premium global freight. FedEx is expanding its road hub in Duyven, Netherlands to support international parcel and freight growth, and has launched a temperature-controlled corridor between Ireland and its U.S. network. It also launched FedEx Life Sciences for complex healthcare shipments and pharmaceutical solutions. The company sizes the healthcare transportation market at $80.0 billion and reported FY2026 healthcare transportation revenue of $10.0 billion.

The company sizes the global international air-freight market at $90.0 billion. It is also using data, machine learning and AI to improve network planning, customer visibility and automated workflow decisions. Its data platform is intended to connect planning and execution, respond to disruption and support supply-chain decisions.

FedEx expects calendar 2026 revenue growth of approximately 11%, including about three percentage points of fuel-price-driven surcharge benefit. It expects calendar 2026 capital expenditures of approximately $3.9 billion, including investment in Network 2.0 and facility modernization.

Structural risks

• FedEx is directly affected by global economic conditions, consumer and business spending, industrial production and global trade growth. Weak imports, tariffs, sanctions, quotas and other trade barriers can reduce shipment volumes, raise costs and affect pricing.

• Network 2.0, Tricolor, international transformation and systems consolidation can create unforeseen expenses, delays, service disruption, employee issues, contractual challenges or legal challenges from service providers and government agencies.

• Fuel prices and availability are outside the company’s control. Fuel surcharges may not fully protect results if competitive conditions prevent FedEx from maintaining or increasing them.

• Labor disruption, changes in labor law, pilot and regional-feeder pilot availability, wage and benefit costs, and challenges to the employment status of service-provider drivers could affect operations and costs.

• Global operations face aviation, security, customs, postal, licensing, environmental and other regulation. Foreign rules can restrict the ability of foreign-owned companies to compete in domestic transportation and logistics markets.

• The company faces exposure to geopolitical conflicts, foreign-exchange movements, supply-chain disruption, cyber and technology complexity, litigation, credit losses and transportation-infrastructure constraints. It also identified the MD-11 grounding and global trade-policy changes as fiscal 2026 headwinds.

Bottom line

Our reading

Our reading: FedEx is a network-based transportation business whose operations combine domestic parcel delivery, international express freight, customs and logistics services, supported by a large air-ground and retail-access footprint. Its results depend materially on shipment demand, yield, labor, purchased transportation and fuel, while the company is restructuring the network to reduce its cost to serve. The separation of FedEx Freight narrows the continuing business toward express transportation and international logistics, with execution, trade conditions and competitive pricing remaining central exposures.