FedEx reacts to slower package demand by parking planes

Mario Tama

FedEx Corporation (NYSE:FDX) provided an update on how it is handling the new macroeconomic backdrop at an investor conference on Tuesday.

The shipping giant noted that it has reduced the frequency of flights and parked some of its planes in response to weaker-than-anticipated demand for package deliveries, particularly in Asia.

Chief Financial Officer Mike Lenz confirmed at the Baird 2022 Global Industrial Conference that the company has halted 23 domestic flights and about nine international ones.

Lenz also pointed to the ongoing consumer shift of spending more on services than goods. "Unquestionably, the commencement and the speed and depth of that shift was beyond what we certainly had anticipated," he noted. "That’s why we have been taking down trans-Pacific flights, 'he added.

Looking at the holiday season in the U.S., FedEx (FDX) said it sees a solid peak season, although more moderate than the last two years.

Shares of FDX fell 0.55% in premarket action on Wednesday. The stock has only partially recovered from its sharp earnings-related drop back in September.