(Bloomberg) -- FedEx Corp. is seeking to cut $4 billion in costs by combine its two main delivery networks, in an ambitious plan by new Chief Executive Officer Raj Subramaniam to increase profit margins.
The company has for decades operated an express package business separately from its ground unit, which depends on third-party contractors to make the last-mile delivery of parcels. Now it will be “a single company operating a unified, fully integrated air-ground network under the respected FedEx brand,” FedEx said in a statement.
“As one FedEx team, we are well positioned to execute on our mission to help customers compete and win with the world’s smartest logistics network,” Subramaniam said in the statement.
The company expects to achieve $4 billion of permanent cost reductions in fiscal 2025. FedEx also said its board approved a 10% increase in the annual dividend for fiscal 2024 to $5.04 a share.
The courier’s shares rose 2.4% as of 7:35 a.m. before regular trading in New York.
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