FedEx has announced that it will spin off its transportation business into a new publicly traded company as it aims to strengthen its business amid weak demand.
The package delivery group, considered a challenger to global economic growth due to the wide range of items it ships, said it expects the division to allow for “customization of operations” and “coordinated investment and capital allocation strategies” to serve the “continuing development. needs” of the less than truckload (LTL) market. ), transporting goods or luggage weighing more than 150 kilograms.
“This is an opportune time to pursue diversification as we respond to the unique dynamics of the LTL market,” said Raj Subramaniam, FedEx president and chief executive officer. “Through this program, we will unlock the value of our transportation business and position FedEx to create even greater value for shareholders.
FedEx shares jumped 10.2 percent in after-hours trading in New York.