By Maria Kalamatas – June 25, 2025
Section: /air
Location: Memphis, Tennessee
MEMPHIS – FedEx shares dropped nearly 6% in pre-market trading on Wednesday after the logistics giant issued a downbeat earnings forecast for the current quarter. Company executives cited weakening demand and growing headwinds from U.S.–China trade restrictions, including the recent cancellation of duty-free status for small parcels imported from China.
“There’s been a clear shift in the flow of goods,” said FedEx CFO Michael Lenz during a conference call with investors. “Consumer habits are adjusting, and so is trade policy.”
The move comes as the U.S. government officially removes the de minimis exemption for imports under $800 from China—a policy shift expected to hit e-commerce flows and international air cargo volumes.
Operational impacts across divisions
FedEx noted declines in both its Express and Ground divisions, with fewer overnight shipments and slower-than-expected parcel volumes on domestic lanes. International freight bookings were also down, particularly for routes involving Asia-Pacific.
“We’re watching a softening across categories,” Lenz added, “especially from fashion and electronics sectors that were strong last year.”
Despite these challenges, the company emphasized that it is continuing to invest in automation, route optimization, and fuel efficiency upgrades in anticipation of longer-term demand recovery.
Wall Street reacts with caution
Analysts see FedEx’s announcement as a bellwether for the global shipping industry. While rivals like UPS and DHL have yet to update their forecasts, investor sentiment has shifted, with logistics ETFs experiencing mild pullbacks midweek.
As of Wednesday afternoon, FedEx’s share price stood at $224.70—its lowest point since February.
Conclusion
With political pressure rising and consumer spending patterns shifting, FedEx’s latest warning reinforces a broader message: global logistics remains highly sensitive to regulatory change. For now, all eyes are on the upcoming holiday season to determine whether volumes rebound or contract further.
