LOS ANGELES - The FedEx Corp division that handles most of the company's e-commerce deliveries plans to lower volume forecasts because its customers plan to ship fewer holiday packages, according to an internal memo obtained by Reuters.
The message to the 6,000 independent contractors that handle delivery and trucking for FedEx Ground in the United States and Canada came about two weeks after the global shipping firm pulled its full-year forecast and announced an unexpected first-quarter profit drop of more than 20%.
Shares in FedEx fell 2.7% to $151.05 on the news on Friday.
"We expect there to be downward adjustments to volume forecasts," Paul Melander, a FedEx Ground senior vice president said in the message to the unit's delivery contractors earlier this week. The new forecasts will be available on or about Oct. 21.
"These changes will reflect the latest information from customers about how they anticipate current conditions are likely to decrease their volumes this holiday season," Melander said.
FedEx did not immediately respond to requests for comment.
The company's Ground division contributes more than 40% of its operating income. More than a dozen contractors told Reuters that their volumes were down anywhere from 5% to 15% this year versus the same time in 2021.