FedEx has announced it will spin off its freight business into a new publicly traded company to strengthen its business amid weak demand.
The parcel delivery group, considered a pioneer of global economic growth due to the wide range of items shipped, said it expects the separation will enable “more tailored operational execution” and “tailored investment and capital allocation strategies” to meet “evolving” needs to meet “needs” of LTL (Less-Than-Truck-Load) markets that weigh goods or freight of more than 150 pounds.
“This is the right time to separate as we respond to the unique dynamics of the LTL market,” said Raj Subramaniam, FedEx president and CEO. “Through this process, we will unlock value for our freight business and enable FedEx to create even more value for shareholders.”
FedEx shares rose 10.2 percent in after-hours trading in New York.
