FedEx Freight is starting to see more stability in its less-than-truckload operations as commercial activity increases and the company anticipates improved financial results in the coming quarters. Volumes have continued to stabilize, the company said Thursday. The company became an independent business when it split from FedEx in June 2026.
Management also said they were confident the company could produce better operating leverage next year as a stand-alone carrier. Local dedicated LTL sales teams are increasingly winning new business and improving the quality of freight moving through the network.
The latest results, for the four-month period from June through September, were released after the close of trading on Thursday. This reporting period marks the company’s transition to calendar-year financial reporting.
FedEx Freight (NYSE: FDXF) brought in $3.28 billion during the period, up 9% on a year-over-year basis. Revenue per operating day was also up 8%.
Adjusted earnings per share were $2.15, down 70 cents from a year ago, however, indicating that stronger revenue performance has yet to translate into commensurate earnings growth.
The results come on the heels of FedEx’s own financial announcement Wednesday. FedEx (NYSE: FDX) spun off its freight business in June, beginning a new chapter for the LTL carrier.
Freight rates offset flat shipment volume
FedEx Freight’s revenue growth came more from improved pricing than an increase in overall freight tonnage.
Yield, or revenue per hundredweight, grew 9% year over year. Overall tonnage remained unchanged from the previous year’s level meanwhile.
The steadiness in tonnage was the result of two opposing tendencies. Daily shipments were 1% lower, but the average weight carried per shipment was 1% higher, leaving the overall volume unchanged.
Year-over-year, yield, excluding fuel-related charges, was up only 0.3%. Revenue per shipment, ex fuel, increased a stronger 2%.
The numbers suggest that pricing gains and changes in shipment characteristics are providing important support to the carrier’s financial performance in a relatively flat freight demand environment.
Revenue outlook supported by contract repricing
FedEx Freight has repriced around 25% of its contractual business since the spin-off. Management said the net revenue churn tied to those adjustments has improved, a sign of better retention and financial returns from its customer contracts.
The company expects freight volumes and yield, excluding fuel, to increase in the fourth quarter.
The market conditions may also offer some additional support. U.S. manufacturing, a key driver of demand for less-than-truckload freight, expanded in September for the ninth straight month.
LTL carriers are particularly important to manufacturing activity, as industrial producers and distributors commonly utilize this transportation model for smaller shipments that do not fill a full truckload.
FedEx Freight is also planning another round of price changes. The average increase in rates for 2027 is expected to be 6.9%. The implementation is planned for January 8.
FedEx Freight’s key performance indicators
The company’s latest operating indicators provide further insight into the relationship between freight volumes, pricing and financial performance following the separation.
| FedEx Freight | Jun-Sep/26 | Jun-Sep/25 | Y/Y Gross Change | Y/Y % Change |
|---|---|---|---|---|
| Operating Days | 86.0 | 85.0 | 1.0 | 1.2% |
| Revenue | $3,281 | $3,004 | $277.0 | 9.2% |
| Revenue/Day | $38.2 | $35.3 | $2.8 | 8.0% |
| Total Shipments/Day | 88,879 | 90,104 | -1,225 | -1.4% |
| Priority | 62,000 | 62,086 | -86 | -0.1% |
| Economy | 26,879 | 28,018 | -1,139 | -4.1% |
| Pounds/Shipment (composite) | 938 | 926 | 12 | 1.3% |
| Priority | 924 | 933 | -9 | -1.0% |
| Economy | 970 | 910 | 60 | 6.6% |
| Length of haul (composite) | 994 | 994 | 0 | 0.0% |
| Priority | 914 | 920 | -6 | -0.7% |
| Economy | 1,172 | 1,162 | 10 | 0.9% |
| Tonnage/Day | 41,683 | 41,702 | -19 | 0.0% |
| Priority | 28,644 | 28,963 | -319 | -1.1% |
| Economy | 13,036 | 12,748 | 288 | 2.3% |
| Revenue/Shipment (composite) | $413.00 | $375.13 | $37.87 | 10.1% |
| Priority | $393.06 | $360.16 | $32.90 | 9.1% |
| Economy | $458.98 | $408.30 | $50.68 | 12.4% |
| Revenue/Shipment (ex-fuel composite) | $318.23 | $313.18 | $5.05 | 1.6% |
| Priority (ex-fuel) | $301.64 | $300.75 | $0.89 | 0.3% |
| Economy (ex-fuel) | $356.50 | $340.72 | $15.78 | 4.6% |
| Revenue/cwt (composite) | $44.03 | $40.53 | $3.50 | 8.6% |
| Priority | $42.54 | $38.62 | $3.92 | 10.2% |
| Economy | $47.30 | $44.85 | $2.45 | 5.5% |
| Revenue/cwt (ex-fuel composite) | $33.93 | $33.83 | $0.10 | 0.3% |
| Priority | $32.65 | $32.25 | $0.40 | 1.2% |
| Economy | $36.74 | $37.42 | -$0.68 | -1.8% |
| Adjusted Operating Ratio | 84.5% | 85.4% | -90 bps | -1.1% |
| Adjusted EPS | $2.15 | $2.85 | -$0.70 | -24.6% |
Revenue in millions.
FedEx Freight’s key performance indicators.
Pressure on earnings but better operating efficiency
One of the biggest numbers in the report was FedEx Freight’s adjusted operating ratio of 84.5%.
Operating expense as a percentage of revenue improved 90 basis points from the prior year. The lower the operating ratio, the better the operating efficiency and the better the cost control.
The uptick is a sign that the carrier is better managing its operating expenses, even as shipment volumes remain largely unchanged.
It is critical for an LTL carrier to have a competitive operating ratio because profitability is driven by the balance between freight density, network utilization, labor costs and transportation expenses.
Fourth quarter outlook suggests revenue and operating income growth
FedEx Freight expects its financial results to improve more in the fourth quarter.
Revenue is anticipated to be in the $2.3 billion to $2.37 billion range. On a mid-point basis this is an increase of about 13% year on year.
However, the increase in revenue is expected to come largely from increased diesel fuel surcharges. Diesel prices climbed 48% year over year in the third quarter, putting more importance on fuel-related adjustments in the carrier’s pricing structure.
We expect adjusted operating income to be in the range of $185 million to $205 million, an increase of approximately 20% year-over-year at the mid-point of the guidance range.
The outlook also implies an adjusted operating ratio of between 91.4% and 92%. That would be an improvement of 50 basis points from the same period a year ago at the midpoint.
The projected operating ratio for the fourth quarter is higher than the 84.5 percent reported for the June–September period, but the year-over-year improvement suggests that management expects continued progress in controlling operating expenses.
Dividend, share buybacks remain on the table
FedEx Freight is also getting ready to decide on capital returns to shareholders, in addition to its operating outlook.
The company will decide its dividend policy soon enough and is also considering share buybacks, management said.
Any buyback would likely aim to offset dilution to shareholders as FedEx unwinds its remaining equity stake in the newly independent freight business.
The news comes as investors weigh how the standalone company will handle capital allocation, profitability and long-term financial strategy outside the larger FedEx group.
The market reacted positively to the earnings release. FedEx Freight (FDXF) shares rose 3% in after-hours trading Thursday.
A standalone FedEx Freight offers greater visibility into the LTL market
The latest results provide a more detailed picture of FedEx Freight’s performance as an independent carrier, while offering additional insight into broader developments across the U.S. less-than-truckload market.
Stable tonnage, improving contractual pricing and a stronger operating ratio suggest that the company is gradually adjusting to its new structure. However, the modest increase in fuel-excluded yield highlights the importance of further pricing improvements and a sustained recovery in freight demand.
The expected increase in fourth-quarter revenue and operating income will therefore be an important test of the company’s ability to translate its commercial momentum into stronger profitability.
Why it matters: FedEx Freight’s standalone financial results provide greater visibility into the economics of its LTL operations and the wider U.S. freight market. Its progress on contract repricing, operating efficiency and volume stabilization could offer valuable indications of how major less-than-truckload carriers are positioning themselves for the next phase of the freight cycle.
