Dive Brief:
- FedEx created an automotive vertical within its organization as part of its efforts to expand its business-to-business customer base and revenue, EVP and Chief Customer Officer Brie Carere said on a June 24 earnings call.
- The vertical features a dedicated leadership team and is "off to a strong start," Carere said. She noted that FedEx landed a spot on General Motors' 2025 Supplier of the Year list for the 21st year in a row.
- "Our focus for fiscal year '26 will be growing within the $18 billion high-margin segment of the North American automotive market, a subsector focused on premium services that supports automotive supply chain," Carere said.
Dive Insight:
FedEx is looking to be a logistics partner for more automotive companies, as auto shipments can be more profitable on a per-unit basis than retail or e-commerce deliveries. The company's pursuit comes as the auto industry faces a range of supply chain challenges, including fluctuating tariff and trade policies.
FedEx is up for the task of helping all 3 million of its shippers, automotive or otherwise, adapt their businesses to tariff changes, President and CEO Raj Subramaniam said. He noted that FedEx can flex its global capacity to meet evolving demand trends, as seen in May when the company reduced its Asia-to-Americas air cargo capacity.
"This uniquely positions us to be a valuable partner to our customers as they navigate shifting demand trends, evaluate the impact of tariffs on their businesses and adjust their supply chains accordingly," Subramaniam said.
FedEx is not only prioritizing growth among auto shippers. The carrier is also seeking more volume from healthcare companies, small and medium-sized businesses, shippers in Europe and airfreight customers.
Carere said FedEx exited fiscal year 2025, which ended May 31, with $9 billion in healthcare-related revenue as it tries to catch rival UPS in the category. FedEx achieved a healthcare milestone in Q4 by landing a Center of Excellence for Independent Validators in Pharmaceutical Logistics certification for its hubs and ramps, the CCO added.
"As we look to further penetrate the high-margin health care segment, I am confident this achievement will unlock even more opportunity for us," Carere said.
