FedEx Freight Becomes Independent Company With $9 Billion Revenue After Separation From Parent
The less-than-truckload carrier gains independent control over capital, technology, and sales after operating inside a nearly $90 billion parent.
dailynk.comFedEx Freight separated from its parent company earlier this month and now operates as an independent business generating roughly $9 billion in annual revenue. The company runs one of the largest less-than-truckload networks in North America. Before the separation, the parent company approached $90 billion in annual revenue.
FedEx Freight CEO John Smith said the difference in scale shaped capital allocation decisions. “Rightfully so, the majority of that will go into the mothership,” he said, referring to how investment decisions flowed toward the larger parcel business. Until the spin-off, FedEx Freight shared technology, finance, sales, and back-office functions with the broader organization.
Many of those systems had become optimized for parcel delivery rather than less-than-truckload operations. Smith said the company plans to use AI and machine learning to improve capacity utilization, routing, and pricing. FedEx Freight already captures dimensional data on shipments, including weight and space occupied inside a trailer.
The company also intends to expand in healthcare, including medical equipment and specialized freight categories. It plans to build a dedicated sales force to improve performance with small and midsize business customers, a segment where it historically underperformed.
Smith said independence gives the company freedom to pursue those priorities without competing against the needs of a much larger parcel operation.
“Even when you think you've learned everything, you've got to keep learning. That's where I think some people mess up when they think they know everything. You don't,” he said.
