TNT Express integration expenses
FedEx (FDX) expects TNT Express integration expenses to be ~$450.0 million for fiscal 2019. In the previous fiscal year, the company incurred $477.0 million in expenses associated with TNT Express integration. Pursuant to the cyber attacks in June last year, the company now anticipates higher incremental integration expenses than expected earlier. The attacks resulted in huge investments in technology by the parcel delivery company.
For fiscal 2020, the TNT Express integration expenses are estimated to be in the $250.0 million to $300.0 million range. FedEx has figured out additional productivity boosters in the TNT Express integration, which should significantly increase the company’s return on investment.
TNT Express integration stage
FedEx hopes to integrate its global sales teams from the Express segment and TNT Express in fiscal 2019, which would be one year ahead of the company’s original schedule. The technology and operational capabilities should give FedEx the ability to haul packages between the legacy TNT and FedEx systems, which could lower operating costs.
In June 2018, the worldwide courier services giant launched its Economy Express one-day transit service in 175 lanes in Europe. Earlier, these lanes were operated on a two-day transit time promise. Thus, FedEx expects to leverage TNT Express’s European road network strength. With the launch of these services, FedEx’s European customer base should grow in the coming quarters.
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In the next part, we’ll turn to analyst recommendation on FedEx and peers.