FedEx to separate FedEx Freight, create new company
FedEx announced that its board of directors has concluded a comprehensive assessment of the role of FedEx Freight as part of its portfolio and has decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company.
The separation is expected to be executed within the next 18 months, according to a news release.
As two public companies, FedEx and FedEx Freight will continue to pursue their own growth strategies. The separation will allow for more customized operational execution along with more tailored investment and capital allocation strategies to serve the needs of both the global parcel and LTL markets.
They will also maintain the strategic advantages of cooperation on key commercial, operational, and technology initiatives.
“This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,” said Raj Subramaniam, FedEx president and chief executive officer.
“This announcement is a testament to the strength of the business our team has built, and to our dedication to doing what’s best for our customers, our team members, and our stockholders. Through this process, we will unlock value for our Freight business and position FedEx to create even greater value for stockholders.”
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The article is written with an understanding that it is a total corporate separation. That said, under the excellent leadership of President-Elect Donald J. Trump and his new Secretary of Transportation, this is a very positive step for FedEx. Well done!