FedEx Is Getting Hammered—And China’s Trade War Is to Blame
Let’s be real—nobody saw this coming. FedEx, that giant we all trusted to get our packages across the world in a couple of days, is suddenly looking shaky. And the reason? Well, it’s complicated, but a lot of it boils down to the whole U.S.-China trade mess. Shares are tanking, routes are getting cut, and honestly? It’s kinda scary how fast things changed.
So What’s Actually Going On With FedEx?
Their Stock Is Taking a Beating
Down 15% in just three months. Ouch. That’s way worse than UPS or DHL. And here’s the thing—it’s not just about bad numbers. Investors are straight-up nervous FedEx can’t handle this trade war chaos. “They basically told everyone ‘hey, things are worse than we thought,’ and the market panicked,” says this analyst from Barclays. Can’t blame them, really.
China Shipments Have Fallen Off a Cliff
We’re talking 22% fewer packages from China compared to last year. That’s huge. And it’s not just the old Trump tariffs still causing problems—China’s zero-COVID madness isn’t helping either. A buddy of mine who works at FedEx (won’t say his name) put it bluntly: “More tariffs means less stuff moving. Simple as that.”
Why This Is Happening
The U.S. and China Keep Escalating
Remember those new chip export bans? Yeah, China didn’t take that well. Now they’re hitting back, and FedEx is stuck in the middle. Electronics and machinery—which FedEx moves a ton of—are getting killed by tariffs. “The rules change every other Tuesday,” some freight guy in Shanghai told me. “Nobody knows what’s allowed anymore.”
And Honestly, The Whole Economy’s Messed Up
Inflation, recession talk, people spending less—it’s all adding up. That crazy online shopping boom from the pandemic? Gone. Now everyone’s choosing the slowest, cheapest shipping option. FedEx admitted this themselves in their last earnings call.
How FedEx Is Getting Hit
Their Wallet’s Getting Lighter
Last quarter, they missed revenue targets by a whopping $900 million. Now they’re freezing hires and combining routes to save cash. Even Moody’s—those super serious ratings people—changed their outlook to “negative.” Not great.
Operations Are Getting Shaky Too
Get this—they’ve cut flights to Shenzhen and Shanghai by almost a third. There’s whispers about layoffs in Asia, though FedEx says “nah, we’re not doing mass firings.” I don’t know, sounds fishy to me.
Can FedEx Bounce Back?
Maybe, If Things Change
If Washington and Beijing chill out—maybe drop some tariffs—FedEx could recover fast. They’re also trying to grow in places like India and Vietnam. “They need to stop relying so much on China,” some analyst from Bloomberg said. Makes sense.
But There Are Big Risks
If the U.S. and China fully split up economically? Disaster. Meanwhile, Chinese companies like SF Express are eating FedEx’s lunch in Asia. One report put it bluntly: “Lose China, lose relevance.” Harsh.
What FedEx Should Do Now
Change How They Operate
Automating more stuff and optimizing routes could save them billions. And expanding in Southeast Asia might help make up for China losses.
Push for Better Policies
FedEx is actually lobbying to get tariffs reduced. Their CEO said something smart recently: “We need predictable rules, not this back-and-forth nonsense.” Amen to that.
What This Means for Your Money
Short-Term Pain, Maybe Long-Term Gain?
FedEx stock is super cheap right now—if you think they can turn things around. Keep an eye on their next earnings report in September.
Bigger Picture: This Is Bad for Global Trade
When a giant like FedEx struggles, it’s a warning sign. Like Goldman Sachs said: “FedEx’s problems show how fragile global trade really is.”
The Bottom Line
FedEx is in a tough spot. If trade relations improve, they’ll probably be fine. But if this U.S.-China fight keeps going? They’ll need to make some painful changes. Either way, investors should prepare for more bumps ahead. This isn’t over yet.
Source: Financial Times – Global Economy
