FedEx borrows $1.5bn to offset coronavirus impact

By Damian Brett

Fedex has strengthened its cash reserves with a $1.5bn credit line loan while executives have agreed to pay reductions.

In a stock exchange announcement, the US express company said that the move would allow it to gain financial flexibility to combat the negative effects of the coronavirus outbreak.

FedEx said high-margin business-to-business (B2B) demand across all of its transportation businesses has been negatively impacted by the pandemic.

Meanwhile, its low-margin FedEx Ground residential delivery services has increased due to sharp increases in e-commerce volume as a result of social distancing and other measures.

“The shift in mix is expected to negatively impact margins and operating results,” FedEx said.

The express giant added that its Asian business is currently performing well, but there were no guarantees how long this will last.

“Business demand in Asia remains elevated due to backlogs caused by the Covid-19 pandemic and the impact of responsive measures in Asia in early calendar 2020, as well as decreases in cargo capacity on passenger airlines,” FedEx said.

“However, due to weakening economic conditions in Europe and the United States, and resulting decreases in demand for goods manufactured in Asia, there are no assurances that these increased levels of demand will be sustainable.

Meanwhile, chief executive Fred Smith has cut his base salary by over 90% for the next six months.

Share this story

Related Topics

Latest express news

FedEx adds new sorting tech at Stansted

By Damian Brett

FedEx Express Europe has implemented new package sorting technology at its Stansted Airport facility in the UK to help meet…

Read More

Share this story

FedEx predicts soft peak season for e-commerce in Europe

By Damian Brett

Express giant FedEx is predicting a soft peak season for e-commerce volumes in Europe due to economic pressures. The company…

Read More

Share this story

UPS completes Bomi Group purchase to expand in healthcare

By Damian Brett

Express giant UPS has completed its acquisition of healthcare logistics provider Bomi Group to expand its presence in Europe and…

Read More

Share this story

Damian Brett

Damian Brett
I have been writing about the freight and logistics industry since 2007 when I joined International Freighting Weekly to cover the shipping sector. After a stint in PR, I have gone on to work for Containerisation International and Lloyds List - where I was editor of container shipping - before joining Air Cargo News in 2015. Contact me on [email protected]