FedEx Freight reported an 8.1% revenue increase to $2.442 billion for the quarter ended Sept. 30, even as average daily shipments fell 0.7% to 89,105. CEO John Smith said the LTL carrier has entered a "hunting phase" after its June 1 spinoff from FedEx Corp., backed by a 500-strong dedicated sales force targeting vertical market share. FedEx Freight renewed about 25% of its contractual portfolio since June and announced a 6.9% general rate increase effective Jan. 8, 2027, covering roughly a third of its revenue base.
According to www.ttnews.com, FedEx Freight has moved into what CEO John Smith called a “hunting phase” following the less-than-truckload carrier’s spinoff from FedEx Corp. on June 1, with the company reporting an 8.1% revenue increase for the four-month period that began with its initial public offering.
Revenue rises despite softer volumes
FedEx Freight posted revenue of $2.442 billion in the three months ended Sept. 30, up from $2.259 billion a year earlier, the company said on its Oct. 29 earnings call. The gain was driven largely by higher fuel surcharge revenue, greater weight per shipment, an additional operating day and higher base revenue per hundredweight.
Those factors were partly offset by softer volumes. Average daily shipments slipped 0.7% to 89,105 from 89,717 in the year-ago quarter, according to the report. Weight per shipment edged up 0.6% to 932 pounds from 926 pounds.
The shipment decline was milder than analysts had feared. Bank of America had expected a 3% drop, according to a research note cited by the publication, making the actual 0.7% fall a modest beat. Priority shipments rose 0.8% to 62,247 from 61,763, while economy shipments fell 3.9% to 26,858 from 27,954.
Sales force targets vertical market share
To pursue growth as a stand-alone company, FedEx Freight has hired a 500-strong dedicated sales force aimed at winning share in LTL verticals where its position lagged its overall standing in the segment. Memphis, Tenn.-based FedEx Freight ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 1 in the LTL segment.
At its first investor day on April 8, executives said the carrier expected to expand share in small- and medium-size business, grocery, healthcare, and data centers and energy markets. Smith told analysts the early results are encouraging, with retail showing the strongest traction so far, followed by grocery and aerospace.
“We’re already starting to see traction in some of these verticals. Even though we’re four months into the hunting phase, we feel really good about the opportunity to continue the momentum that we started building these first four months into the fourth quarter and beyond.” — John Smith, CEO of FedEx Freight
Before that push, the company consolidated its existing book of business. Since June 1, FedEx Freight has renewed about 25% of its contractual portfolio, and Smith said the carrier achieved its strongest renewal pricing performance in recent years amid an ongoing freight market rebound.
Rate increase set for January 2027
FedEx Freight is also moving on price. In September the carrier announced a 6.9% general rate increase effective Jan. 8, 2027, covering about a third of its revenue base, according to the report.
Smith said volume and base yield trends continued to stabilize, reflecting a significant moderation from prior-year declines earlier in 2026. He added that while broader freight conditions have shown signs of improvement, the company’s commercial, service and customer experience initiatives are also beginning to contribute positively to underlying performance.
The carrier expects further margin improvement as those initiatives scale and the rate increase takes effect. FedEx Freight’s results cover the four-month period that kicked off with its June 1 spinoff from FedEx Corp., a separation that created a publicly traded LTL operator competing independently in the North American freight market.
Source: Transport Topics
Compiled from international media by the SCI.AI editorial team.
