FedEx is having a rough go of it lately. The shipping behemoth just reported a dramatic plunge in volume that has Wall Street types nervously checking their portfolios while company brass tries to explain away the carnage with corporate-approved terminology.
During the latest earnings call, CEO Raj Subramaniam offered this gem: "There's a lot happening." No kidding. That's like saying the Titanic experienced some minor navigation issues.
What's really happening is that Trump's tariffs are wreaking havoc on global trade patterns. These aren't small ripples we're talking about—they're tidal waves reshaping the entire landscape of international commerce.
I've covered logistics and supply chain issues for years, and FedEx has always been my go-to canary in the economic coal mine. When their planes and trucks start moving fewer packages, it signals something fundamental shifting in our commercial ecosystem.
Here's the thing about tariffs that economists don't always capture in their neat little models: they create chaos before they create anything else. First comes the announcement (panic), then frantic supply chain restructuring (more panic), followed by implementation (yet more panic), and finally the volume effects ripple through the system like a stone dropped in a pond.
We're now seeing those ripples hit shore.
"We're basically playing tariff Tetris right now," a logistics director at a manufacturing firm told me last week, "trying to figure out which country to source from to avoid getting hammered on costs." That uncertainty translates directly into FedEx's volume declines.
The international express segment took the biggest beating, which makes perfect sense. That's precisely where you'd expect to see tariff impacts show up first—in cross-border shipments suddenly made more expensive or complicated by new trade barriers.
What's particularly odd (worrying?) is that this decline is happening during what should be a reasonably healthy consumer economy. Unemployment remains low. Wages have been growing. Yet packages aren't moving. This suggests the tariff situation is creating significant friction that's overriding otherwise positive economic factors.
Look, we've seen this movie before. The Smoot-Hawley tariffs of the 1930s contributed to a catastrophic two-thirds decline in global trade. We're nowhere near that level of disaster—at least not yet—but the mechanism is eerily similar.
FedEx's response has been predictable corporate defense mode: cost-cutting and "network optimization," which is just fancy talk for "figuring out how to make money while moving fewer boxes." Not an easy task for a business built entirely on scale.
Is this just a FedEx problem? Probably not. Container shipping rates and reports from other logistics firms paint a consistent picture of disruption across the industry. Something bigger is happening here.
The next few quarters should tell us whether this is just a temporary adjustment or the beginning of a more profound restructuring of global trade. Either way, FedEx investors might want to buckle up.
Which is, ironically, exactly what their packages aren't doing right now.
