American parcel giant FedEx Corp. intends to improve its profitability by US$1.7 billion by fiscal 2015, largely by cutting costs at its express division through technology acquisition and labor reduction.
The cost-cutting measures, plus the strong performance by the ground and freight units, will put FedEx on track to achieving its financial goals, said Frederick Smith, chairman, president and CEO, in a keynote speech to investors on Tuesday.
Smith said FedEx said many cost reduction activities are underway, including information technology enhancements, to enable the company to reduce costs further.
“We are revamping the Express cost structure through a combination of cost reductions, efficiency improvements, and service repositioning,” he added.
FedEx, the world’s second largest package delivery service, revised downward its 2013 guidance last month after its express service earnings were affected by a growing customer preference for sea freight over airfreight due to higher jet fuel prices and a slowing global trade.
FedEx reaffirmed its outlook for fiscal 2013 of $6.20 to $6.60 per diluted share, and second quarter earnings of $1.30 to $1.45 per diluted share.
Photo courtesy of FedEx
