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Global Transportation Declines- How Much Can Carriers Permanently Cut?

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Transportation and logistics professionals were once again taken aback this week by the FedEx announcement of fiscal second quarter earnings.  The company announced a staggering 75 percent decline in quarterly profit along with a 14 percent decrease in second quarter revenues. These results could have been somewhat worse, but FedEx had also been the recipient of the decision by DHL to withdraw its operations in the U.S.   In contrast, rival UPS reported its fourth quarter revenues in February, indicating a 22 percent decline in profits and a 5% decline in revenues.  We don’t need an army of financial analysts to indicate the fact that FedEx has obvious excess capacity and expense problems, but FedEx is not alone in that camp. FedEx made large bets on the explosive increase in global outsourcing and emerging markets., with massive infrastructure investments in those regions. There is however one bright spot in these […]