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FedEx Corp FDX said its second-quarter package volumes in the U.S. seem to be below its projections.
Delivery firms like FedEx and United Parcel Service IncUPS experienced a spike in e-commerce volumes during the COVID-19 pandemic, Reuters reported.
As the pandemic faded and as business and social restrictions lifted, the companies are left with excess delivery capacity as demand plunged.
“In the U.S., you’re seeing again, as anticipated, a bit of a reset from the e-commerce boom and the volume surges that accompany that,” the report quoted FDX CFO Michael Lenz.
“We projected to have lower volume in our fiscal first and second quarter already. It just came in lower than our initial projections were,” he added.
In its Q1 report, FedEx outlined its cost-cut plan as demand trends reversed faster than expected.
The delivery giant also said it is scaling back on vendor headcount and has suspended many projects along with limiting flights to increase profitability.
Price Action: FDX shares closed higher by 0.19% at $159.54 on Tuesday.
