FedEx maps premium growth, digital push and returns

FedEx has set out a sweeping multi-year strategy to sharpen its focus on premium growth, digital intelligence and shareholder returns, as the logistics giant seeks to translate its global scale into higher margins and stronger cash generation through 2029.

The strategy was unveiled at FedEx Investor Day 2026, hosted in Memphis, where the company welcomed investors, analysts and bankers to outline its transformation roadmap, financial targets and segment priorities. The event marked a pivotal moment for the group as it prepares for the planned spin-off of FedEx Freight and a new phase of capital discipline.

Opening the presentations, Raj Subramaniam, president and chief executive officer, highlighted the scale of the FedEx network and its role in global trade.

“FedEx connects more than 99% of global GDP, transports approximately $2 trillion of goods every year, and delivers more than 17 million packages each business day,” Subramaniam said. “We are the industrial network that powers the global economy.”

Subramaniam said FedEx is entering “a new era” as it builds what it describes as the most flexible, efficient and intelligent network in its history, underpinned by digital intelligence and data-driven decision-making.

Four strategic priorities
FedEx outlined four strategic priorities that will guide its transformation and financial performance over the coming years.

The company will grow revenue in high-margin verticals, focusing on premium B2B and specialised B2C segments where customers value speed, precision, visibility and reliability. Key industries include healthcare, automotive, aerospace, data centres and the premium end of e-commerce.

Brie Carere, executive vice president and chief customer officer, said growth will be disciplined and targeted.

“For more than 50 years, FedEx has built an unmatched global infrastructure,” Carere said. “Looking ahead, we are driving disciplined growth by focusing on the segments where our differentiation matters the most to our customers, particularly high-value B2B and specialised B2C.”

The second priority centres on scaling data, AI and automation, leveraging the roughly two petabytes of data FedEx processes daily across its physical network.

Vishal Talwar, executive vice president and chief digital and information officer, said the next phase of FedEx’s evolution will be defined by intelligence at scale.

“Our next era will not be defined by the scale of our physical assets alone, but by how we combine unmatched real-world networks with the power of intelligence at scale,” Talwar said.

The third priority involves transforming the network, including continued modernisation of integrated air and surface operations through initiatives such as Network 2.0 and the Tricolour air network strategy.

Kawal Preet, executive vice president and chief planning and transformation officer, said the focus is on agility as trade patterns evolve.

“As the world reglobalises, we are designing, building, and orchestrating the entire system for constant agility, ensuring we stay ahead of the world in motion,” she said.

At the ground operations level, Scott Ray, president of FedEx Ground, said network integration is already delivering results.

“We are transforming the FedEx service network into the smartest, the most efficient, and the most flexible integrated network in the industry,” Ray said, citing improved service quality, consistent profitability and fewer miles driven as routes are consolidated.

The fourth priority is delivering ongoing efficiency gains by embedding the “one FedEx” operating model, powered by the DRIVE process, across the organisation.

International focus and Europe reset
International operations were positioned as a key contributor to future profitability, with Europe identified as FedEx’s largest long-term international value-creation opportunity.

Richard W. Smith, chief operating officer for international and chief executive of the airline business, said FedEx is refocusing global reach toward profitable growth.

“Our international network moves trillions of dollars of goods across some of the world’s most critical industrial supply chains,” Smith said. “We’re turning global reach into financial returns.”

In Europe, Wouter Roels, regional president, said restructuring efforts are gaining traction.

“Europe accounts for approximately 30% of global imports and exports,” Roels said. “We are re-engineering this region for performance and profitability at the right scale, and the results are already visible.”

Financial targets through 2029
From a financial standpoint, FedEx introduced a comprehensive multi-year framework with targets for 2029, excluding FedEx Freight.

The company is targeting revenue of around $98 billion, operating income of approximately $8 billion, and an operating margin of about 8%. Return on invested capital is expected to rise to roughly 11%, while capital expenditure is forecast to remain at about 4% of revenue.

FedEx also reiterated its target of generating around $6 billion in adjusted free cash flow by 2029, with aircraft-related capital spending expected to remain at or below $1 billion annually through the period.

John Dietrich, executive vice president and chief financial officer, said the company has already strengthened its financial foundation.

“Over the past three and a half years, we’ve grown adjusted operating income, significantly lowered our CapEx to revenue intensity, and generated over $12 billion in shareholder returns,” Dietrich said. “We’ll leverage our improved operating income and lower CapEx to drive $6 billion in adjusted free cash flow in 2029.”

Freight spin-off and outlook
The planned spin-off of FedEx Freight into a separate publicly listed company remains on track for June 1, 2026, with FedEx Freight set to host its own Investor Day in New York on April 8. The company also provided a third fiscal quarter update, saying adjusted earnings per share are now expected to exceed market consensus following a strong peak season.

Closing the event, Subramaniam underscored the central role of digital intelligence in FedEx’s next phase.

“It is reshaping how we plan, how we operate, how we serve customers, and increasingly how we create new services,” he said. “That’s how we will succeed and make supply chains smarter for everyone.”

The 2026 Investor Day positions FedEx at a critical juncture, as it seeks to balance scale, profitability and technological transformation amid shifting global trade dynamics and heightened investor focus on returns.

Earlier this week, FedEx broke ground on a 300,000 square foot cargo terminal at Navi Mumbai International Airport (NMI), backed by an investment of US$250 million. This marks FedEx’s first dedicated integrated cargo terminal in India and represents one of its largest infrastructure commitments in the country.