Need a dollar amount? Tariffs are expected to hit FedEx with $1 billion in costs in fiscal 2026, executives said during the company’s Q1 2026 earnings call last week.
Export volumes decreased for the quarter, especially stalling between the US and China. The company reduced its “trans-Pacific Asia outbound capacity by 25% YoY,” CEO Raj Subramaniam said on an earnings call Thursday.
The bulk of FedEx’s troubles with that particular trade route came from the halting of the “de minimis” exception, which President Trump ended last month via executive order. It allowed duty-free shipments to the US on orders under $800.
“Given a significant portion of our de minimis volume exposure previously came from China, we were able to use learnings from our experiences in May to help shippers elsewhere navigate the more recent exemption elimination,” Subramaniam said on the call.
Now, the shipping giant is focusing its efforts on other markets, including shipping within the US.
“Knowing our strongest international lane would be under pressure, we pivoted the commercial team and they have done a tremendous job capturing demand out of Southeast Asia and Europe,” Brie Carere, FedEx’s chief customer officer, told investors on the earnings call.
US average daily volume climbed 5% in the quarter, while Subramaniam noted that “Q1 also marked our best new business quarter in Europe in the last 2 years.”
And it’s not like the company is exactly struggling. Revenue climbed to $22.2 billion, a 3% YoY jump. Analysts FactSet polled expected $21.7 billion in revenue, the Wall Street Journal reported. The company anticipates YoY revenue growth within the 4% to 6% range for fiscal 2026, ahead of Wall Street expectations.
Some big hits, sure, but FedEx is doing fine.
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