About FedEx Freight
FedEx Freight’s (FDX) service offerings include priority services when speed is critical and economy services when time can be traded for savings. It offers LTL (less-than-truckload) shipping across all lengths of haul. It operates in the US, Canada, Mexico, Puerto Rico, and the Virgin Islands.
For efficient delivery, the segment operates through two entities:
- FedEx Freight – manages all of the normal LTL freight transportation
- FedEx Custom Critical – it’s only used for time-critical transportation
FedEx’s Freight segment had a flat year in terms of revenue. For 4Q15, revenue rose by a meager 1%. However, higher LTL revenue per shipment resulted in better operating margins. Operating income for the year grew by a staggering 38% while 1Q15 operating income grew by 5%. For fiscal 2015, the average daily LTL shipments grew by 5.7%, while LTL revenue per shipment—or yield—grew by ~1%.
As you can see in the above chart, FedEx Freight enjoys the highest market share among its competitors. As of 2014, FedEx Freight’s market share was at 16%. YRC Worldwide (YRCW) captures the next highest share with a 14% market share. The third position is captured by Con-way (CNW) with a 10% market share. Fourth place is shared by United Parcel Service (UPS) and Old Dominion Freight (ODFL) with an 8% market share each. Fifth place is shared by ABFS with Saia (SAIA) with a 6% market share each.
Volume growth in both FedEx Ground and Freight and the Ground segment’s rising yields were the main reasons behind the 2015 revenue growth.
FedEx forms a 2.18% holding of the PowerShares Buyback Achievers ETF (PKW).