Will FedEx Freight hit the open road?

On June 26th, The Wall Street Journal reported that FedEx plans to spin off their freight division - and the most interesting part is why. FedEx Freight is the less-than-truckload (LTL) division of the company. It is the most profitable division, with a recent operating margin over 20 percent, compared to 11.8 percent for FedEx Ground and 2 percent for FedEx Express. The company has realized that the division is so successful it will generate more shareholder value on its own. With estimated valuations between $30 and 50 Billion, it is too big to be bought, but too small of a division of FedEx to stay. Pending an internal review scheduled to be complete later this year, FedEx Freight is likely to have a future as a standalone company. In this episode of the Art of Supply podcast, Kelly Barner covers this story in the larger context of supply chain operations, investment, and profitability: Providing an overview of the current LTL landscape Comparing FedEx Freight's performance with UPS Freight, which the company spun off in 2021 Considering what this move may mean for the supply chain as a whole and for procurement professionals tasked with managing LTL spend Links: FedEx Ground's Contractor Woes Case Dismissed: Spencer Patton Prevails Over FedEx Reading FedEx Ground the RICO Act Kelly Barner on LinkedIn Art of Supply LinkedIn newsletter  Art of Supply on AOP Subscribe to This Week in Procurement