In an interview with CNBC on Thursday Jim Cramer, FedEx CEO Raj Subramaniam said his company can perform well even in the face of supply chain shocks.
“As supply chain patterns change, we are here, there and everywhere,” he said. “This is the advantage that people sometimes miss – the fact that we have a scaled network gives us an advantage in these dynamic times“
President-elect Donald Trump has threatened to dramatically increase import tariffs on several countries, especially China, in moves that would likely disrupt global supply chains. While Subramaniam acknowledged that China currently represents about 28% to 30% of global production, he said the good news for FedEx is that its network is global, saying the company handles 99% of global trade.
This dynamic makes it easier for FedEx to “adjust and shift our production capacity” and connect any point in the network to the rest of the world, he continued. Subramaniam also said the company is seeing higher-than-expected demand this month. He said he thought consumers were more optimistic and suggested December could be a record month for the Port of Los Angeles.
FedEx reported a mixed quarter on Thursday after the close announced plans to spin off its freight business into another publicly traded company, FedEx Freight. Shares rose more than 8% in extended trading. Subramaniam said the split could help create long-term value for shareholders of both companies.
“We rely on global supply chain insights,” he said. “So we want to be not only a leading provider of transportation networks, but also a provider of global supply chain technologies.”
