FedEx CEO touts ‘community at scale’ as provide chain challenges loom

In an interview Thursday with CNBC Jim Cramer, FedEx CEO Raj Subramaniam mentioned his firm can do effectively even with provide chain disruption.

“As provide chain fashions change, we’re right here, there and in all places,” he mentioned. “That is the benefit that folks typically miss. The truth that now we have a large-scale community offers us a bonus in these dynamic occasions.“.

President-elect Donald Trump has threatened to considerably elevate import tariffs for a number of international locations, together with China, and the measures would threat disrupting international provide chains. Though Subramaniam acknowledged that China at present accounts for about 28 to 30 % of world manufacturing, he mentioned the excellent news for FedEx is that its community is international, saying the corporate serves 99 % of world commerce.

This dynamic permits FedEx to “extra simply adapt and shift our capabilities” and join any level on the community to the remainder of the world, he continued. Subramaniam additionally mentioned the corporate is seeing better-than-expected demand this month. He mentioned he thought customers had been feeling extra optimistic and steered December could possibly be a document month for the Port of Los Angeles.

FedEx reported a combined quarter Thursday after the shut and announcement it plans to spin off its freight enterprise into one other publicly traded firm, FedEx Freight. Shares rose greater than 8% in prolonged buying and selling. Subramaniam mentioned the cut up may assist create long-term worth for shareholders of each firms.

“We’ve got details about the worldwide provide chain,” he mentioned. “So we not solely need to be a number one transportation community supplier, but in addition a world provide chain expertise supplier.”