FedEx executives say a broad organisational and network redesign has improved adaptability and customer value, with management highlighting high-quality B2B business as the main source of growth, reports New York's FreightWaves.

Chief Executive Raj Subramaniam said FedEx has expanded customs brokerage services following the cancellation of duty-free treatment for low-value B2C parcels. He added that the company is using historical trade data and generative artificial intelligence to simplify cross-border execution.

The loss of B2C benefits cut first-quarter operating income by about US$150 million, but Subramaniam noted the impact is limited as 70 per cent of exports move through B2B channels. FedEx's compliance and legal teams have helped shippers navigate new tariffs on China, the EU, Mexico and Canada.

FedEx launched a transformation campaign in 2023 to cut excess capacity and improve profitability. The Network 2.0 plan will merge about 650 Express and 650 Ground sites into 850-900 combined locations, with integration 25 per cent complete and due by May.

International streamlining under the Tricolor programme has boosted US outbound airfreight by 22 per cent, or $40 million, and increased Singapore-US volumes. The overhaul has helped offset capacity losses from the temporary grounding of MD-11 freighters after a UPS crash.

Executive Chairman Brad Martin and senior leaders said high-tech freight and healthcare logistics are key growth areas. Analysts noted FedEx's focus on B2B suggests e-commerce will play a smaller role in future revenue.

FedEx expects modest profit growth in the peak season, forecasting $4.05 per share compared with $3.83 in the first quarter. The company is also onboarding heavier-weight Amazon packages under a new partnership.

First-quarter revenue rose three per cent year-on-year to $22.2 billion, with adjusted operating income up seven per cent to $1.3 billion. FedEx shares closed at $263.43, down 1.5 per cent on Monday and 6.4 per cent for the year.