FedEx Predicts Tough Economic Times Ahead
FedEx has said that the global economy is slowing down and things are just going to get worse.
According to FedEx a reduction in global trade has shrunk its earnings and a continual slowdown in the developed world coupled with high fuel prices is likely to keep trade levels low.
FedEx has now cut its earnings forecast for the year ending in May and also announced that its Express unit will be undergoing changes.
The majority of FedEx’s problems have been caused by a decline in Asian exports. Furthermore, businesses around the world are transporting goods by ground or ocean instead of air in order to save money.
CEO Fred Smith said that “the world economy has absorbed an incredible increase in the price of fuel and that has had very big implications on the way people think about supply chains on their decisions to move by ocean or whether they move things by air.”
Forecasts made by FedEx are watched for signals of future economic health.
Due to the large number of products it transports and the number of countries it operates in, FedEx’s results provides an insight in to the global economy.