FedEx Warns of Weakened Demand as Trade Tensions Take Toll

By Maria Kalamatas – June 26, 2025
Location: Memphis, USA
Section: /air

MEMPHIS – FedEx’s stock tumbled early Wednesday after the logistics giant issued a profit warning for the current quarter. The company cited declining international parcel volumes and increased operating uncertainty due to shifting U.S.–China trade policy.

A major driver of the slowdown appears to be the cancellation of the de minimis rule on Chinese imports under $800, which previously allowed e-commerce parcels to enter the U.S. duty-free. This change, implemented this month, is already reducing shipment volumes for FedEx Express and impacting small businesses reliant on low-cost sourcing.

“Our network is feeling the effects of reduced volume and rising customs complexities,” said Raj Subramaniam, CEO of FedEx, during the earnings call.

A broader slowdown across segments
While FedEx Express is hit hardest by the fall in international demand, the Ground and Freight divisions are also seeing softer domestic activity. E-commerce clients are adjusting inventories cautiously, and global brands are rerouting goods away from high-tariff markets.

Despite these pressures, FedEx says it remains committed to investing in automation and fleet upgrades, anticipating long-term structural recovery in global trade.

Conclusion
FedEx’s profit warning may be a signal to the wider industry: the rules of global logistics are shifting fast. As tariffs rise and parcel exemptions vanish, air freight operators may need to rethink their playbooks.

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